Rental demand up, prices still down in May

May 26, 2009 11:59AM

In keeping with seasonal trends, rental demand in Manhattan has increased week-over-week since the beginning of April and since last year, according to a May rental market report from the Real Estate Group New York. Rental deals increased 33 percent this April compared to April of 2008. But rents are still down significantly from their 2007 numbers, the report said.

“While we have seen some owners realize the increase in demand and begin to test the market, we are concerned that, as what happened last summer, owners that are too aggressive to raise prices or slash incentives will find themselves holding excess inventory going into the fall,” Daniel Baum, COO of the Real Estate Group, said in the report.

Between April and May, the greatest price declines occurred in non-doorman one-bedroom apartments in Tribeca, where rents fell 9.37 percent to $3,901, and in doorman one-bedroom units in Soho, which saw an 8.29 percent drop to $4,246.

Prices increased in two bedrooms in the Financial District, by 9.27 percent, and on the Lower East Side, by 9.08 percent. Rents also rose in non-doorman studios in Tribeca, by 8.71 percent, and in Chelsea, by 7.82 percent. Overall, non-doorman studio rents rose the most month-over-month, by 1.85 percent.

The Real Estate Group report is based on 10,000 listings from the firm’s database for properties below 155th Street and priced under $10,000. The data covers the period from mid-April to mid-May. TRD