Landlords are easing off on concessions in Manhattan’s tight rental market as vacancies gradually shrink.
The tightening of vacancy in May is part of a wider trend seen over the past year, according to Douglas Elliman’s latest rental market report.
The rate is now 1.65 percent, down from 1.85 percent at this time last year. The number of new leases fell 7.7 percent year-over-year to 5,796, according to Elliman.
Compared with Brooklyn and Queens, where rent prices are rising, median rent prices in Manhattan remained flat, increasing just 0.1 percent to $3,500. The median net-effective rent — which includes concessions — rose 0.6 percent to $3,413.
“The market is tight but not tight enough to drive rents up across the board,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report.
According to Elliman’s data, rental prices on studio and one-bedroom apartments creeped up year-over-year but bigger units slipped.
Landlord concessions were also down. About a third of the market (33.9 percent) relied on them, which is a sharp drop from 18 months ago, when the highest concession levels in a decade were recorded at a rate of 49.3 percent.
“The strength of the rental market is coming from the weakness of the purchase market,” Miller said, noting that uncertainty from tax law changes may have led more people to rent, or “camp out.”
“While landlord concession market share has been falling since the beginning of the year, they still impact about one-third of apartment rentals.”
– The vacancy rate has declined year over year for the eleventh time in twelve months
– Landlord concession market share has continued to trend lower since the beginning of the year
– The net effective median rent rose year over year for the fifth consecutive month
– The median rent for studio and 1-bedroom apartments continued to increase year over year while larger sized units declined
– The luxury entry-threshold hasn’t seen a year over year decline since December
– Luxury median rent was flat with most significant annual gain occurring in the Upper Tier
Key Trend Metrics (from same period last year)
– Median rental price increased 0.1% to $3,500
– Rental price per square foot rose 1.2% to $69.32
– Average rental price slipped 0.3% to $4,218
(Net Effective Rent – includes concessions)
– Median rental price rose 0.6% to $3,413
– Share of new rental transactions with OP or rent concessions was 33.9%, down from 37.6%
– Size of concession was 1.2 months of free rent or equivalent, down from 1.3 months
– Manhattan vacancy rate tightened to 1.65% from 1.85%
– Number of new leases fell 7.7% to 5,796
– Listing inventory fell 6.5% to 5,534
– Days on market was 26, down from 29
– Listing discount was 1.1% unchanged