Inventory is dwindling for both Manhattan renters and buyers, according to two recent market analyses, and that’s pushing apartment rents and prices higher.
Citi Habitats figures cited by the Wall Street Journal show just 2,230 new rental units will arrive in Manhattan this year, as the construction slowdown during the recession starts to rear its head just as apartment demand is at its highest. Many people have turned to renting in the uncertain economy and the vacancy rate during the typically lax winter months currently sits at just 1.27 percent.
The rental construction that began to pick up with the market likely won’t bear fruit until late next year or early 2014, meaning conditions will stay tight for the foreseeable future, Citi Habitats said. The Journal said those conditions will reward the Related Companies and Metro Loft Management who are bringing 232 units and 418 units, respectively to 102nd Street and Park Avenue and John Street in the coming months. Rents for one-bedroom apartments in new developments average $3,984 per month, according to the data.
Meanwhile, Crain’s reported that a Vanderbilt Appraisal Company analysis shows declining inventory is stabilizing prices for Manhattan apartments. The appraisal firm said when there’s six to nine months worth of inventory prices are stable; anything less than that and prices rise, anything more and prices fall. In Midtown there’s still 15 months worth of inventory, but on the Upper West Side there are just 1,016 units on the market — a six month supply. The Upper East Side has 10 months worth of apartment supply and Downtown there exists an eight month supply. As a whole, there are 6,400 units for sale in Manhattan, down 13 percent from September, representing less than nine months worth of inventory. [WSJ] and [Crain’s]