Rental concessions may be keeping vacancy rates low in Manhattan, but they aren’t preventing prices from slipping, according to a new report.
The median monthly rental price for apartments in Manhattan dropped 1.5 percent year-over-year in February to $3,330, according to Douglas Elliman’s latest rental report for the borough.
The vacancy rate last month was 2.29 percent, down from the same time last year when it was 2.44 percent.
Meanwhile, the percentage of new rental deals involving concessions dropped slightly from January but remained high at 47.6 percent — up from February 2017, when the percentage was 26.4.
“Normally the idea of a concession is to protect face rents,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and the author of the Elliman report. “You’re still seeing face rents decline.”
Though the median for luxury rentals jumped 6.4 percent year-over-year, hitting $8,495 and marking one the few categories that saw an increase last month, pricing is skewed by the high volume of new development, which also tends to be larger than existing product, Miller said. For instance, the average size for a new rental was 1,202 square feet in 2017, compared to 900 square feet in an existing rental, according to additional data provided by Miller.
“There doesn’t seem to be a change looming in this market,” Miller said. “In many ways, the rental market, as you skew higher, is still under cover of a wet blanket. There’s a weight on the market that is pulling prices down gradually.”