Rental season has arrived with a vengeance as Manhattan prices show no sign of easing, while Brooklyn prices, surprisingly, eased slightly after booming since 2010, monthly market reports from residential brokerages released today show.
The median rental price of a Manhattan apartment in May clocked in at $3,200 a month, a 3.5 percent year-over-year increase from $3,093, a report from Douglas Elliman shows. Across the river in Brooklyn, the median price of an apartment was $2,579, a 3 percent year-over-year decrease from $2,658.
“Brooklyn rents have been rising since late 2010, even before Manhattan rents began” rising, said Jonathan Miller, president of Miller Samuel, who compiled the report. “Brooklyn [rents] showed a slowing pace, [but] I wouldn’t characterize Brooklyn rents as falling — they’re not.”
Rental trends in Brooklyn tend to be more “volatile” than Manhattan ones, Miller explained, partly because of the way the housing stock is in the borough.
In another contrast, the number of new rental transactions in Manhattan fell 21.8 percent year-over-year to 4,139 units in May from 5,290 units at this time last year, Elliman’s report shows. The report attributed that to less “tenant churn” as more tenants renewed their existing leases with landlords. However, in Brooklyn, the number of new rental transactions jumped 23.5 percent year-over-year to 479 units from 388 units.
In Brooklyn, “you had an uptick in rentals, which infers that there’s a resistance to rising rents, so there’s more tension between landlords and tenants,” Miller said.
Meanwhile, the vacancy rate of Manhattan rentals is down 15 percent month-over-month to just 1.09 percent from April’s 1.28 percent level, Citi Habitats’ monthly rental report shows. But compared to May 2012, the vacancy rate is up 8 percent from 0.89 percent.
And, the number of rental transactions with a concession was just 5 percent this month, Citi Habitats’ report said.
Gary Malin, the president of Citi Habitats, said because the rental market is so hot right now, there is no need to incentivize buyers to rent apartments.
“It’s what we expect to see right now,” Malin said. “There’s a lot of demand and a lot of inventory and those two things favor the landlord. There’s no real need to incentivize people to transact.”
As rental vacancies remain low, prices are set to rise in the coming months, experts said. High rental activity may even continue into the fall and winter months as tenants who don’t want or can’t afford to move put off their move until then, similar to last year, Malin said.
“People get priced out of the marketplace during the summer months, and if they can move their move date to sometime in the fall or early winter they try to do it to save some expense, or there’s a better choice of inventory for them, so it’ll be interesting to see how that plays itself this year as well,” Malin said.