As the year rolled on, it continued to be frustrating time to be a Manhattan renter, but a great time to be a Manhattan landlord. During this period, the market remained relatively stable. However, rents continued to accelerate to new historic highs on a year-over-year basis, and the Manhattan rental market continued to experience minimal vacancies.
Even after reaching record highs, rents continued to climb during the quarter. The average monthly cost of a Manhattan apartment increased across all categories when comparing the second quarter of 2012 to the same period in 2011. The largest increases occurred for 1-, 2- and 3-bedroom apartments - approximately 5% over the past year. Rents for studio apartments increased the least, with an average price jump of 3.8%, or $76 a month, from Q2 2011. Rent for the average Manhattan apartment was $3,437, an increase of $169 per month from the $3,268 average rent reported during the second quarter of 2011.
Across Manhattan, the second quarter vacancy rate was 0.97%, which is up from the 0.72% vacancy rate in the second quarter of 2011. This modest increase in the number of available apartments is one bright spot for apartment seekers.
Despite the rising vacancy rate, landlord concessions remain few and far between, except in new construction. During the second quarter of 2012, a mere 7% of transactions included a landlord concession (typically one month free rent and/or payment of the broker’s fee). As of June of this year, the percentage dropped even further to 6%. This is a huge shift from the recent past. Concessions peaked during the fourth quarter of 2009, when 56% of transactions included some kind of move-in incentive from the landlord.
One hypothesis for the vacancy rate increase in June is that home seekers who have the option may be waiting for the slower fall months to make a move. Or, as evidenced by recent brokerage sales reports’ findings that “starter apartments” are making up a larger share of closed sales transactions, perhaps more New Yorkers are making the move to home ownership.
Regardless of what happens in the coming months, New York is like no other place on Earth. The lifestyle available here is a big reason why the rental market is, and will remain, competitive. Our belief is that this report will educate both tenants and building owners about current conditions in the Manhattan rental market, thus allowing both audiences to make informed decisions.
Source: CitiHabitats website
RENTAL MARKET NEWS/TRENDS/ADVISE