The Real Deal New York

Landlords and tenants stuck in “stalemate” July rental market

Manhattan rents barely budge, but haven’t fallen in more than two years
By Guelda Voien | August 08, 2013 12:01AM

The pace of rent growth in Brooklyn continues to outshine that of Manhattan, although rents in both boroughs remain at record highs, according to July reports from leading brokerages released today. 

There is “a continued upward increase in both markets; clearly Brooklyn is seeing greater upward pressure,” said Jonathan Miller, CEO of real estate data firm Miller Samuel and author of Douglas Elliman’s report.

“Manhattan, for the last five months, actually has seen a declining pace of growth but has shown, for the 25th consecutive month, no decline in rent,” Miller said.

The median rent in Manhattan increased 1.1 percent, to $3,042 from $3,008 per month, year-over-year, Elliman’s reports says. In Brooklyn, the median rent was $2,675 in July, up 5.1 percent from last July’s median figure of $2,546, but down slightly from that of June 2013, when median rents in the borough of Kings were 2.3 percent higher, at $2,737 per month.

“I’d call it a stalemate,” said Gary Malin, president of Citi Habitats, whose firm also released a report today. “Owners try to push, but there is really nowhere to push.”

The average rent of a Manhattan apartment was $3,442 in July, Citi Habitats’ figures show, or $18 more than in June 2013, when the average was $3,424, an increase of 0.5 percent. However, average rents are still down slightly, about $17 per month, from 12 months ago, when the average apartment rented for $3,459.

The vacancy rate for July was 1.28 percent, up from June’s rate of 1.1 percent and a slight increase from the year-over-year vacancy rate of 1.2 percent, Citi Habitats’ research says.

Dismal jobs numbers are the main factor preventing Manhattan renters from trading up, Malin said.

“A lot of people are … not moving, even if they’d like to,” he said.

The result is a market full of miserable participants.

“What you are seeing is two unhappy parties,” Miller said. “Landlords cannot press rents higher. … Tenants are still feeling the pressure.”

  • ManhattanLL

    Funny, all of my manhattan walkup renewals this past year have been 5-12% increases

  • Anonymous

    Manhattan LL, you are ignoring the impact to the average of people vacating and trading down based on the 5-12% increase. This presumably has an impact on your profitability as well.

    • ManhattanLL

      No, I have very little turnover and when I do I get 10-25% higher rents from new tenants. 9/10 times by the end of the next month, many times by the 15th.

      • You make an excellent argument as to why rent stabilization needs to be brought back for all of New York City’s apartments.

  • That_Brooklyn_NY_Guy

    Boil all the BS away and It’s all about Greed/Race and removing people of color plus people of low income out of the City ( Manhattan, Brooklyn, queens will be next ). Weapon of choice for LL now is MCI’s. We know all you have to do is keep jacking up the rents. It’s a waiting game you know you can win as the current Housing stand now.

    This MCI increases the Rent for Rent Stabilized ( RS) Units permanently even after the MCI (say boiler ) is payed for. It used to be once that MCI ( Boiler or insert item ) was payed for by the RS tenant their rent would be adjusted. Not anymore.

    In closing:
    So, It’s okay to kick out ( price out ) people of color ( and low income )out of their neighborhoods you want back (during the 1920’s ). You don’t want to live near these people , including whites of low income – But at the same time you people don’t mind hiring them as you security guards in Wall street( midtown too ), waiting on you at you tables at fancy restaurants , picking up your garbage and pushing your babies around.