The market for residential rentals in Manhattan is robust, the inaugural monthly rental report from Prudential Douglas Elliman reveals. The average number of days a Manhattan apartment spends on the market year-to-date — 39 per listing — is the lowest average since Jonathan Miller, the author of the report, began tracking rental data 20 years ago. Last year in September, that number was 55, the report shows.
Tight lending standards in combination with an improving economy led median rental prices to surge 10 percent year-over-year, according to Elliman’s data. In addition, concessions from landlords were down — they were offered in 2 percent of deals tracked by Elliman, in contrast to three years ago, when concessions were offered in 40 percent of deals, Miller said. The average rental price per square foot was about $49, the report shows.
“We’ve been seeing fairly strong gains,” Miller said. “This has been a constant story in the rental market.”
With QE3 keeping interest rates low till 2015, credit markets are not likely to loosen their lending standards; that keeps the rental market “very tight,” Miller said. “Real estate is local, but mortgages often aren’t,” said Miller, explaining that national mortgage woes are likely to keep potential first-time buyers out of the pricey purchase markets in Brooklyn and Manhattan.
The vacancy rate was also down, Miller said, to 1.82 from 2.62 year-over-year. But there may be some fatigue with the resulting growing prices: The rate of new Manhattan rentals was up 55 percent year-over-year.
“I take it as a sign that some resistance to rising rents is being reflected,” Miller said. “This churn … it’s causing people to look around for more affordable options.”
The September rental report from Citi Habitats, which tracks average, not median rents, showed rents dropped month-over-month; it does not track year-over-year numbers. The average Manhattan apartment rented for $3,453 in September 2012, down $8 from August’s average, according to the brokerage’s numbers.
In September, the average price for a studio was $2,113, and $2,789 for a one-bedroom. A two-bedroom was $3,989 on average, while a three-bedroom was $5,306, according to the report from Citi.
Brokerage A.C. Lawrence also began tracking residential rental prices earlier this year. Average rents in September in Manhattan was $3,572, their report showed, up one percent month-over-month.
Elliman made the switch to monthly reports, Miller said, because the rental market provides so much data — three times more transactions are logged, generally, than the purchase market — and that information could prove useful to rental agents.