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Rental volume picks up as rents drop: report
Source: Citi Habitats (Click chart for larger version)
Activity is stronger than last year as city rents continue to fall, Citi Habitats determined in its November rental report (see the full report below), released today.
The report found that rents for apartments leased by the rental giant fell 5 percent from the same period of 2008.
The average rent for a studio apartment in Manhattan was $1,728, a 4 percent drop from $1,808 in November of last year, the report found. One-bedroom rents fell 6 percent to $2,345 from $2,506 last November; two-bedrooms dropped 6 percent to $3,298 from $3,518 in the same month of 2008; and three-bedrooms averaged $4,445, decreasing by 5 percent from $4,670 last year.
Average rents for studios and two-bedrooms remained roughly on par with October 2009, while one- and three-bedrooms fell slightly.
“You’re seeing further price drops because unemployment is still high,” said Gary Malin, the president of Citi Habitats. But he said he doesn’t expect to see more dramatic price drops. “We’ve found the price point where landlords and tenants are happy.”
Citi Habitats said it saw strong activity in November compared to the fall of last year, when the city’s real estate market after the now-fabled Lehman Brothers collapse paralyzed the market. The brokerage said it did roughly 800 rental transactions in November 2009, 37 percent higher than around 500 in November of 2008.
Malin attributed the activity to renters’ desire to take advantage of lower rents.
“People are concerned that the good deals may disappear,” he said, adding that New Yorkers who otherwise might not move are seeking out cheaper apartments. “People who might not have an impetus to move might now have one.”
Vacancy rates — like Manhattan rental data in general — is notoriously difficult to track because it’s often self-reported by landlords, but Citi Habitats said the overall vacancy rate in Manhattan was 1.87 percent, slightly below the 2.04 percent vacancy rate in November of 2008.