Hoping Manhattan rents have gotten so incredibly high that the bubble’s about to burst?
Rental prices in the borough continued to hit dizzying heights in the second quarter, according to two reports from real estate brokerage firms.
“There is very little inventory and very high demand,” Citi Habitats President Gary Malin told the Daily News.
The median rental price for a Manhattan apartment surged 7.9% to $3,125, compared with the same period last year, according to a report from Prudential Douglas Elliman.
“The year-over-year increase is the highest in five years,” said Jonathan Miller, CEO of Miller Samuel, which compiles Prudential Douglas Elliman’s reports.
A big reason rents continue to climb: People who want to buy a Manhattan apartment are finding they can’t qualify for loans.
“Mortgage underwriting on the purchase side remains irrationally tight,” Miller said.
There are some signs of easing ahead for Manhattan’s squeezed tenants.
The vacancy rate in the second quarter widened to 0.97% from 0.72% in the same period last year, according to Citi Habitats. That could indicate some price breaks ahead.
“You can’t keep pushing and pushing rents because incomes are not rising as steadily,” Malin said. “You will see competitive market conditions for July and August. In the fall, you will see some relief.”
A separate report from the Real Estate Board of New York (REBNY) that looked at residential sales found that New York City’s market, while not gangbusters, is holding steady.
“Given the continuing uncertainty in the global economy, this is pretty good news,” said REBNY senior vice president Michael Slattery.
The average sales price of a New York City home — including co-ops, condos and houses — in the second quarter was $789,000, up 6% from last year.
All of the boroughs, with the exception of the Bronx, saw prices rise.
But prices were pumped up by an increase in the number of sales of ultra-expensive Manhattan homes priced between $20 million and $70 million.
The number of transactions in the quarter fell 2%.
Slattery said the Big Apple’s sales market is being held back by a lack of new development. Apartments in new buildings tend to trade at higher prices than the general market.
“The market needs a little more new development to perk up,” Slattery said.