Manhattan rents continued to drop in November, as robust sales activity poached some renters and the vacancy rate edged up to the highest level since 2006, according to a monthly Douglas Elliman rental market report released today.
The median rent in Manhattan slipped 3 percent to $3,100 per month in November from $3,195 in the same period in 2012, tumbling for the third consecutive month, the Elliman report says. Meanwhile, the number of new rental listings grew 22.5 percent year-over-year to a total of 6,127 offerings from 5,000, as tenants opted to try their luck elsewhere rather than cough up ever-rising rents, according to Miller Samuel CEO Jonathan Miller, who authored the report.
“We’ve had more than two years of robust rental growth, and the year-over-year is showing we’re starting to decline,” Miller said. “I think we’re entering some sort of plateau, where rents will remain fairly high but bounce around a little each month.”
Rental vacancy rates in Manhattan increased to 2.8 percent from 1.59 percent in November 2012, according to Elliman.
Over the past year, the median rental price for studios lifted 2.2 percent to $2,350 from $2,300 per month, according to Elliman’s report, but tumbled 5.1 percent percent for one-bedrooms, to $3,065 from $3,229, rose 4.4 percent for two-bedrooms to $4,795 from $4,595, and dropped less than 1 percent for three-bedrooms, to $7,315 from $7,346.
Andrew Barrocas, CEO of brokerage MNS, said the Manhattan rental market continues to strengthen as the job market improves, and that rising land prices have more developers opting to build condominiums rather than rental units in an attempt to recoup that expense.
For example, November rents rose 6.24 percent in the East Village, to $3,591 from $3,380, the largest relative gain in Manhattan, a MNS report released today found.
In Brooklyn, rental prices are on the rise as tenants stick with one unit for a greater period of time, opting to rent instead of buy with few product options other than townhouses, Barrocas said.
The median rent in November increased 3.8 percent year-over-year to $2,800 from $2,698 per month, the Elliman data show. Renters also continued to gobble up available units at a rapid pace, though the speed declined slightly, with available units sitting on the market for an average of 42 days in November, compared with 45 days during the same period one year ago. The average rent per square foot was $37.25, a 9.4 percent jump from $34.04 per square foot last year.
“I see Brooklyn in terms of this cycle as being about a year behind Manhattan,” Miller said. “Brooklyn has morphed into this destination, which has poached some Manhattan demand – people who would’ve gone there first are now going to Brooklyn.”
Emerging neighborhoods such as Bedford-Stuyvesant, Bushwick and Prospect-Lefferts Gardens enjoyed some of the borough’s most significant growth, Barrocas said. The areas saw year-over-year rent growth of 14.6 percent, 15.4 percent and 13.3 percent respectively.