Another month, another decline: Manhattan’s rents stay soft

Concessions are still rampant, as median rent slides

(Credit: Douglas Elliman)
(Credit: Douglas Elliman)

The Manhattan rental market is stuck in a rut.

The median net effective rent, which accounts for concessions, fell 1.3 percent year over year in July to $3,307, according to Douglas Elliman’s latest rental report. It was the seventh decline in eight months, the report said.

“We’re at the top of the seasonal peak, or close to it, and it’s still the same story,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and the author of the report. “Conditions remain soft.”

Incentives are still a fixture of the market, too — with July being the 38th consecutive month with a year-over-year rise in concession market share. During the month, 35 percent of new leases included landlord concessions, up from 26.5 percent a year earlier. While that’s helped the vacancy rate, it hasn’t kept prices from sliding, Miller said.

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Median rents for smaller units, however, have been stagnant. Prices for a studio were unchanged from a year ago while ticking up just 0.4 percent for a one-bedroom unit. That shows the lower portion of the market is “moving sideways” while the upper end is softer, Miller said.

In a separate report, Citi Habitats noted that while the vacancy rate is lower than last year, it’s climbed slightly since June — “unusual for mid-summer.” That’s in part because move-in incentives are lower than they were earlier in the year, the report said.

“In response, many have postponed their apartment search entirely,” Gary Malin, president of Citi Habitats, said in a statement. “Others have chosen to focus on other locations perceived to offer good value — and where pricing is more in line with their expectations.”