Manhattan rental market prices hit record high

The Manhattan residential rental market saw rents increase across all apartment categories, the vacancy rate drop, and concessions recede in April, according to the monthly rental market report from Citi Habitats released today. “If we are able to get these rents and the demand is what it is it really does speak to the economy’s strength,” said Gary Malin, president of Citi Habitats. “In the end, if you want to be in Manhattan, sacrifice is par for the course.”

Manhattan apartments rented for an average of $3,429 during April, up from $3,418 in March, and $3,317 in April 2011 for a new record high, numbers from the brokerage show.

For all types of apartments, average rents increased by between 3 and 5 percent, the report says. The average monthly price of a Manhattan studio was $2,025, whereas the average for a one-bedroom was $2,785. The average two-bedroom in Gotham rented for $3891, and the average three-bedroom $5,186. Citi Habitats uses only its own recorded deals for their monthly market reports.

Despite the high rents and low vacancy rate across the board, Malin underscored that there are still opportunities in the rental market. “Where you are finding better values is on the Upper East Side and Upper West Side,” he said. “You have no-doorman no-elevator buildings [available].” And the average apartment in a walk-up building rented for $3,199 per month last month, 42 percent less than the average rent of $5,522 in a new construction doorman building, the report notes.

Improving prices in outer boroughs are also sparking new development in previously
underserved neighborhoods, according to Malin. “Red Hook had a moment there; Boerum Hill, Bed-Stuy and Bushwick are areas where you are just-removed from the hot area and they are close to transportation — those [places] start to make sense.”

The Manhattan vacancy rate in April was 1.16 percent, down 1.25 percent in March but up from 0.94 percent year-over-year, according to the report.

As for incentives last month, in 9 percent of deals in which Citi Habitats was a broker, which are the only deals covered in the monthly rental report from the brokerage, there was a month’s free rent given or the broker’s fee was paid. In March, that figure was 11 percent, and in April 2011 it was also 11 percent.