Manhattan’s residential market is hotter than ever, with rents hitting all-time highs, according to the latest industry data.
A first quarter 2012 report from City Habitats shows that the average Manhattan apartment rental price hit $3,418 in March, the highest average price since the firm started tracking the statistic in January 2002.
“The Manhattan rental market entered spring even hotter than a Mariano Rivera fastball,” said Gary Malin, president of Citi Habitats.
Rents for studio, one, two and three bedroom apartment increased by an average of roughly five percent in the first quarter of 2012 compared with last year, with one bedroom apartments leading the pack with a 6.5 percent increase, the Citi Habitats report shows.
A separate report from Prudential Douglas Elliman put the median net effective rent at $3,064 in the first quarter, a 9.1 percent increase from last year’s $2,808, while price per square foot increased by 7.1 percent to $52.57. Despite the gains, inventory levels rose 33.4 percent, from 3,874 to 5,167.
The Elliman report’s author, Jonathan Miller of Miller Samuel, Inc., attributed the strong pace of rent increases to “tight credit on the mortgage front” and a “slowly improving regional economy.”
Similarly, Malin pointed to a credit crunch that’s causing tenants to rent “not by choice, but by necessity.” He cited key differences between the new average rent record and the one set in May 2007 ($3,394). Then, it was due to “a relatively strong economy and robust hiring in the tech sector and beyond.” Now, it’s driven by uncertainty about the housing market.
Despite a slight uptick in vacancies compared with last year’s first quarter, from 1.08 percent to 1.22 percent, owner-paid concessions continued to fall. Last year 17 percent of the firm’s transactions included such concessions; this year it dropped to 12 percent, according to Citi Habitats.
“Landlords remained firmly in control, and from an apartment seeker’s perspective, the competition to secure an apartment was increasingly intense,” Malin said.
A March 2012 report from MNS that tracks monthly data shows Manhattan rental prices rose $4 between February and March – despite a 4.3 percent increase in inventory. The greatest monthly rent changes in in non-doorman buildings occurred in East Village studios, down 6.5 percent; Upper West Side one bedrooms, up 4.9 percent; and Harlem two bedrooms, down 5.2 percent.
Among doorman buildings it was Midtown West, up 4.1 percent; Harlem one bedrooms, up 2.7 percent; and Lower East Side two bedrooms, up 1.3 percent.
“Even with a small increase of new inventory, rental rates continued to rise,” said MNS CEO Andrew Barrocas. “As we approach the active spring season and graduates start their search, expect to see an even tighter rental market, especially in prime neighborhood like Tribeca, SoHo, Chelsea.”