Manhattan apartment rents jumped 4.5 percent in the first part of this year compared to the first half of last year.
That’s more than four times greater than the rise in rents seen between the first six months of 2004 and the first half of 2005, when prices increased only 1.1 percent, according to Citi Habitats.
Midtown East, Chelsea and Lower Manhattan have seen rents increase the fastest in the past year, with the Upper East Side and East Village showing the slowest growth (see chart).
The median rent for a Manhattan apartment for the first five months of 2006, according to Citi Habitats, was $2,300. Last year, that number was $2,200. And the year before that, $2,175.
Apartment rents in Manhattan have generally climbed since 2001. The last two years in particular have witnessed a significant uptick in the rental market.
“It’s a very landlord-oriented market at this point,” said Gary Malin, chief operating officer of Citi Habitats, in late June. Malin noted that landlords no longer offer — nor have to offer — as many concessions to lure prospective tenants as they did only a few months ago.
Five years ago, the average one-bedroom rent was $2,050; by 2006, a one-bedroom would cost a tenant nearly $400 more a month.
The rise in rents has been fueled by a slowdown in the sales market. Mortgage rates, once at historic lows, have increased steadily in 2006. At the same time, the supply of rental units in Manhattan has stayed static, with little new rental development in the last few years, a time when condo building took center stage.
During these same years, Manhattan added Manhattanites. The borough’s population increased 3.5 percent from 2000 through 2004 to nearly 1.6 million, according to estimates from the Department of City Planning. Some of that growth may have moderated, however, with the city as a whole losing 21,500 people from 2004 to 2005, according to recent Census estimates.
Demand isn’t slackening, though. “Every apartment that’s half-decent has at least a few applications,” said Steve Hakimzadeh, co-founder of HH Realty. “It’s not easy to do deals because of the fierce competition from the sheer number of brokers out there and the lack of listings.”
Rents have grown faster in some neighborhoods than others.
Midtown East saw an impressive 17 percent growth in rents between the first half of 2005 and the first five months of 2006, according to Citi Habitats.
Second highest was Chelsea, with 13 percent growth, perhaps surprising given the fact that it had the highest, though still low, vacancy rate of Manhattan neighborhoods surveyed at 0.72 percent.
The Upper East and Upper West Sides showed slower growth. Rents increased only 2.3 percent on the Upper East Side between the first part of 2005 and the first part of 2006, the second lowest rate of growth following the East Village, where rents rose 2.2 percent. The median rent for the first five months of 2006 for the Upper East Side was $2,150 a month.
Soho and Tribeca claimed the highest rents in Manhattan for the first part of 2006, with a median of $2,898; in the nearby West Village, the median was $2,600, according to Citi Habitats.
Generally, the farther north in Manhattan, the cheaper the rent. Brokers said Upper Manhattan enclaves like Inwood and Washington Heights might offer the least expensive rents, but not by much. Asked if a decent Manhattan apartment could be found for $1,000 or less a month, brokers laughed.
“In my experience,” one said, “the only thing you can rent in Manhattan for under $1,000 is a nice, prime spot in a parking lot.”