The luxury sales slump has been a silver lining for Manhattan’s rental market.
Rents rose in February as would-be buyers took refuge in the rental market, according to Douglas Elliman’s latest rental market report. Median net effective rent rose 4.1 percent year over year to $3,297 — the second straight monthly increase. Meanwhile, the share of new leases with concessions was 41.6 percent, compared with 47.6 percent a year earlier.
“The rental market is turning, but slowly,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report. “It seems largely dependent on the sales market.”
The number of sales fell to 2,432 in the fourth quarter of 2018, a dip of 3.3 percent compared to the same time last year, Elliman said in a previous report. As luxury sales prices have fallen, the higher end of the rental market as seen rent growth. In February, the median rental price in the luxury segment climbed 5.9 percent year over year to $9,000. The entry threshold rose 3.2 percent to $6,600. The median rent for new developments also grew — rising 7.9 percent to $5,134.
In a separate report, Citi Habitats noted that the vacancy rate fell for the second straight month to 1.4 percent. That’s the lowest since September, when 1.36 percent of apartments were vacant.
“In February, the rental market released some of the pent-up demand that developed over the holiday season,” Gary Malin, president of Citi Habitats, said in the report. “As we transition from winter to spring, conditions have started to improve for landlords.”
Manhattan rents were lowest in Washington Heights, with a median rent of $2,250, the report said. The Soho/Tribeca area had the least inventory with a vacancy rate of 1 percent.