Manhattan rental market retreats from two months of near-record highs: report

Sep.September 07, 2011 11:56 PM
Source: Citi Habitats

This August, renters finally got some relief from the sweltering summer market, according to
a Manhattan rental market report released today by Citi Habitats. The average rent declined
1 percent from July to $3,350 and the vacancy rate rose to 1 percent, its highest level since
February. Both retreated from near-record strong rates in June and July.

But the market is still tilted heavily in landlords’ favor as rents were up 8 percent from a year
ago and concessions were present in just 4 percent of Citi Habitats’ brokered transactions.

“While the market’s still competitive, those in search of rental housing should have an easier
time securing a home,” said Gary Malin, the firm’s president. “Conditions earlier this summer
were brutal and the market was due for a correction.”

Even the month-over-month price declines might be a bit misleading as they were being
pushed up by two- and three-bedroom units, which declined in average price by 2 percent and
1 percent, respectively. According to Malin, those apartments comprise roughly one-quarter of
the marketplace. The bulk of the rental market, comprised of studios and one-bedrooms, saw price upticks. Studio rents increased 3 percent to $2,013 per month, and one-bedrooms rose 1 point to $2,686.

The West Village, Chelsea and Soho-Tribeca neighborhoods enjoyed the highest average prices,
with the latter leading the way at $5,015 per month. The West Village had the thinnest vacancy
rate in the borough, at just 0.35 percent.

Value hunters, on the other hand, were best off heading east. Below 96th Street, the cheapest neighborhoods were on the East Side, the report shows, as rents in the neighborhoods from the Lower East Side to the Upper East Side rose steadily from $2,950 to $3,290 heading north.

Looking forward, Malin said the market is bound to take “its seasonal fall slip,” but until the
global economy shows more stability, there’s know way to know how far prices will fall.

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