Manhattan rental rates hit highest point in five years

Manhattan rents in April hit their highest median price since 2009, according to Douglas Elliman’s monthly rental market report. Rents in the borough also registered a second consecutive month of increases following six straight months of decline.

The median rent for a Manhattan apartment rose 1.6 percent in April to $3,247 per month, up from $3,195 in the same period of 2013, according to the report.

“I think the rental market, aside from these short term ups and downs, is stuck at a high plateau,” said Jonathan Miller, president and CEO of appraisal firm Miller Samuel, who authored the Elliman report.
“Employment is growing in the city and credit remains historically tight, which tips would-be buyers toward the rental market. And the 30-year fixed [mortgage] rate is about the same as what it was in July, so we’re not seeing the spike from a year ago that would put more pressure on the rental market.”

Although the average landlord concession was roughly the equivalent of one month’s rent in April, the use of concessions edged up to 6.8 percent of all lease deals, up from 4.7 percent in the same period last year, the Elliman report said.

“In concert with increasing rent, people try to renegotiate unless they have a reason to move – if the space works, they’ll try to stay,” Yuval Greenblatt, executive vice president of Douglas Elliman, told The Real Deal. “If concessions were up, then sometimes that entices people to move. But concessions seem to be down year-over-year, so people just sustain when they can.”

Studio units saw the biggest year-over-year price increase, as was also the case in March, jumping 4.2 percent to $2,500 per month from $2,400 in April 2013. Rents for one-bedrooms ticked up 1.4 percent to $3,295 from $3,250 per month, while rates for two-bedrooms took the biggest tumble, dropping 4 percent to $4,408 from $4,591. Three-bedrooms took a slight fall as well, tumbling 1.4 percent to $5,795 from $5,875.

The Manhattan rental vacancy rate hit fell to 1.36 percent from 1.46 percent, according to Citi Habitats’ rental market report, also released today.

“This is a continuation of what we’ve seen this year, vacancy rates continue to go down,” said Gary Malin, president of Citi Habitats. “Concessions play a role, helping ease transactions. Nine percent of the transactions we did last month had some sort of concession involved. Over summer months, new buildings will continue to have concessions.

The average Manhattan renter paid 1.5 percent more for an apartment in April than in March, the Citi Habitats report said.

In Brooklyn, listing inventory jumped a whopping 51.9 percent in April, with 1,431 units on the market compared to 942 in the same period last year. The median rent there in March was on the rise as well, up 3.9 percent to $2,805 per month, compared to $2,700 in April 2013, according to Elliman.

Brooklyn’s priciest pads were two-bedrooms in Dumbo, which had an average rental price of $5,239, while the cheapest were studios in Prospect Lefferts Gardens, with a mean of $1,308 per month, according to MNS’ March rental market report.