The Real Deal New York

Manhattan rental market in holding pattern

Concessions are still on the rise, thanks to inventory
By Meenal Vamburkar | November 08, 2018 07:00AM

(Credit: Unsplash and Douglas Elliman)

Thanks to a glut of inventory, don’t expect to see big shifts in Manhattan’s rental market anytime soon.

Coming out of peak season, rampant concessions are here to stay, said Hal Gavzie, executive manager of leasing at Douglas Elliman.

“I don’t see that changing any time soon,” he said. “The entire market is still fueled by the amount of inventory.”

In October, the share of rental transactions with concessions was 41 percent, up from 28 percent a year earlier, according to Elliman’s latest market report. That marked the 41st consecutive month the market share of concessions increased year-over-year.

The report comes amid a more sluggish market and shows a continuation of recent trends. Rentals, on the higher end, have gotten somewhat of a boost from would be-buyers waiting on the sidelines of the sales market. But increasing incentives have been a fixture of the market amid high inventory.

At the same time, the median net effective rental price ticked up 1.7 percent to $3,386. But that was skewed by an influx of higher end apartments coming on the market, the report said.

Concessions, have, however helped with the vacancy rate — which slid to 1.49 percent, the lowest level for October in nine years. The size of concession was 3 months of free rent or equivalent, up from 1.2.