Manhattan homebuyers continue “camping out” in the rental market: Elliman

Consumer behavior related to recent tax increases, poor sales market behind stronger rental market: Elliman

(Credit: iStock)
(Credit: iStock)

Peak “camping” season for Manhattan’s rental market is in full swing.

With the caveat of last month’s rent law changes, “overall, June was a positive month for landlords,” according to appraiser Jonathan Miller, who authored the Douglas Elliman’s most recent monthly rental report.

Summer is typically known as the busiest period of the year for rental transactions, however new leases were down 15 percent compared to May and 9.6 percent year over year.

Last month, the report found that landlord concessions dropped again, dialing down 0.4 percent year over year, while rents crept up with the median rental price (which includes concessions) climbing 4.7 percent to $3,471. At the same time, inventory fell just over 5 percent compared to the previous year. The vacancy rate held steady at about 1.6 percent.

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Miller called the strengthening market an “uninterrupted trend” for the past six months, but pointed to the borough’s sales market and recent tax changes at the state and federal levels as major factors.

Manhattan’s struggling sales market, which showed no growth until the threat of the state’s new taxes on residential properties prompted a sudden surge last month, continues to turn more would-be buyers into renters, according to him.

That comes in spite of June’s strong sales and low mortgage rates, Miller continues to see “camping out” — people renting until they feel more certain about buying — as the common narrative for the market.

“The rental market I don’t think is really standing on its own,” he said in an interview.