Manhattan rental prices reached a new five-year high in May, as vacancy rates dropped and landlords eased up on concessions, according to Douglas Elliman’s monthly rental market report released today.
The median rent for a Manhattan apartment in May rose to $3,300 per month, up 3.1% from $3,200 per month a year earlier, according to the report. The vacancy rate in May was 1.58% compared with last year’s rate of 1.60%.
“Since January, rents have begun to rise again in Manhattan,” said Jonathan Miller, president and CEO of appraisal firm Miller Samuel, who prepared the Elliman report. According to Miller, rising rental prices reflect an easing of competition from the sales market. “Last year, the market saw record sales… and in the second half of 2013, we saw rents dip,” he said. “Essentially, the sale market was poaching demand from the rental market.”
In Brooklyn, the median rental price in May was $2,800 per month, up 8.6% from $2,579 per month in May of 2013, according to the report.
Brooklyn’s most expensive apartments were two-bedrooms in Dumbo, which had a mean rental price of $5,321 per month, according to MNS’ May rental report, which was also released today. The least expensive apartments were studios in Prospect Lefferts Gardens, with a mean rental price of $1,250 per month.
“The shortage of new inventory in Manhattan (is) impacting Brooklyn,” said Andrew Barrocas, CEO of MNS. “I think the whole tech sector, having a big concentration in Brooklyn, has impacted the rental market and created a lot of demand for rental housing.”
But even as Brooklyn rental prices rose, Miller pointed out that they started to stabilize. Brooklyn’s median rental price of $2,800 per month was $500 less than Manhattan’s median rental price of $3,300 per month in May. In February, the difference was just $210.
In part, that’s thanks to new rental developments and more available inventory in Brooklyn. “There are more options for the consumer, therefore prices don’t rise as fast,” Luciane Serifovic, Elliman’s director of rentals, said. In the borough, inventory rose to 1,546 in May, up 57.3% from 983 a year earlier, according to the Elliman report.
Along with more inventory, landlords are easing up on concessions, according to Citi Habitats’ rental market report, also released today. In May, 7% of transactions included landlord concessions, down from 12% in March, according to the report.
“Landlords’ incentives during the last five months played a role in stabilizing pricing, as well as reducing vacancies,” Gary Malin, president of Citi Habits, said. “They created a sense of urgency for tenants to act where they weren’t acting before.”
Malin said the numbers are likely to drop further. “Right now, given where vacancies are, the landlords put themselves in a strong position,” he said.