The Manhattan residential rental market tanked as suddenly and swiftly as the national economy in 2008, but the country’s stumbling recovery has catapulted that rental market to previous heights, according to a five-year study of rents released today by Citi Habitats (see below).
Average monthly rents of transactions brokered by the city’s largest rental firm below 96th Street in Manhattan sat at $3,724 in 2007 before plummeting to $3,399 in 2009 during the depths of the recession. In June 2011, that figure rose to $3,694 per month, close to the 2007 figure.
“[There’s] an increased interest in rental property from those taking a ‘wait-and-see’ approach to the unstable sales market,” Citi Habitats President Gary Malin said. He noted that buyers who would normally make luxury apartment purchases, in particular, are opting for the rental market because of “continued sales market insecurity.”
This pattern is also reflected in vacancy rates, landlord concessions and the percentage of new developments to turn rental for apartments below 96th Street.
Vacancy rates rose to 1.93 percent in 2009 from 0.76 percent in 2006. In June 2011, the rate was 0.69 percent. Similarly, in December 2009, 60 percent of transactions included some owner concession. By October 2010 that number was reduced to 18 percent and as of July 2011 it was just 7 percent. While the number of new rental units brought to the market slowly declined to 2,198 in 2008 from 2,989 in 2006, the number spiked to 3,966 in 2009 before dropping down to 2,280 in 2010.
Throughout the five-year period the Upper East and Upper West sides were consistently the least expensive neighborhoods, while Soho and Tribeca were the costliest.
Big units in Murray Hill and across both sides of Midtown saw the biggest price drops in average rent from 2006 to 2010, as three-bedroom units that in 2006 went for between $4,700 and $6,300 per month on average, dropped to the $3,300-to-$3,700 range in 2010. The Gramercy-Flatiron neighborhood, meanwhile, saw the largest price gain as one-bedrooms and two-bedrooms gained $625 and $750 monthly on average, respectively, despite the overall average monthly rent falling $113 during that timespan.