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Manhattan apartment rents up 8% in a year

Manhattan landlords’ winning streak continues.

In September, the median apartment rent rose 10.2% from a year earlier to $3,195 a month, according to a report released Thursday by Prudential Douglas Elliman and appraisal firm Miller Samuel Inc. Median rent adjusting for common landlord concessions, such as one month free of rent, also rose 8%, hitting $2,938.

“It appears that rents will continue to rise,” said Jonathan Miller, chief executive of Miller Samuel. “The tight credit market is keeping some people from switching out of the rental market [to buying].”

A further indication that it is still very much a landlord’s market is that a mere 2% of all new rentals in September had concessions compared to 8.6% a year earlier. The typical concession was one month’s free rent. Three years ago, roughly 35% of all new rentals included a concession, noted Mr. Miller. Vacancy rates in September also fell to 1.85% from 2.62% from a year ago, a tightness which is helping to drive up prices, according to the report.

Improving employment levels are also boosting the rental market, said Mr. Miller.

Number of apartments on the market jumped 54.5% to 2,535 last month from a year ago because renters aren’t renewing their leases and instead are shifting to cheaper apartments.

“People are looking around, paring back on amenity [buildings] and thinking about changing their location to keep it affordable,” said Mr. Miller.

One report out Thursday had better news for renters. According to brokerage Citi Habitats, average rents eased by $8 in September from the previous month, to $3,453 a month. That is the first such monthly decline since December.

“Recent data from the month of September indicates slightly improving conditions for Manhattan renters and apartment seekers,” wrote Gary Malin, president of Citi Habitats, in the report.

Meanwhile, in Brooklyn everyone seems to be on the same page. There the median rent slipped 2.1% last month from the same time a year ago, to $2,350 according to the Elliman/Miller report. It is the first time the report included rental data on the borough. Mr. Miller said the dip was nominal and describes the Brooklyn rental market as stable. The market is similar to Manhattan and “driven by the same factors,” he added, referring to employment and mortgage lending.

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