NEW YORK—Average rental prices in Manhattan increased by 4.9 percent in February compared to prior year levels, according to a report by Miller Samuel Inc. prepared for real estate brokerage Douglas Elliman.
The uptick comes after four months of modest year-over-year gains, averaging just 1.6 percent per month. Manhattanites paid an average of $3,190 for rent in February, which is up by $162, or 1.3 percent, compared from January.
In another monthly rental report by real estate brokerage Citi Habitats, average rental prices in Manhattan increased by $32 from January to February to reach $3,243. The increase comes after five consecutive months of month-over-month declines, according to the report.
“I don’t think there is going to be relief in the immediate future in terms of rents getting less expensive and purchase prices getting less expensive,” said Jonathan Miller, president and CEO of Miller Samuel Inc.
Credit conditions remain unfavorable for would-be first-time buyers, while the number of listings for sale is at record lows, leaving more people in the rental market, according to Miller. The recent rise in employment rates in New York City is contributing to the climbing rents as well.
“The rental market tends to respond much more quickly to changes in employment than it does in sales activity,” Miller said. “The sale is somewhat a slow and inefficient transaction unlike a lease.”
Landlords were more likely to offer concessions in February, such as a free month of rent or a broker’s fee waiver, an approach used to avoid lowering the rental price in the bargaining process. Rentals with concessions reached 5.5 percent, according to the Miller Samuel report, which is the highest rate since December 2011.
Citi Habitats calculated an even higher rate of rentals with concessions in February at 8 percent, compared to 5 percent in January.
“In February, after five straight months of rent declines, landlords began to increase their use of incentives to new tenants,” Gary Malin, president of Citi Habitats, said in a statement. “For a variety of reasons, owners prefer to offer concessions rather than lower their asking rents. Because these incentives are most frequently used in newly constructed, luxury buildings, it caused the average rent to increase month-over-month.”
Doorman rentals in Manhattan are unaffected by the overall increase in February, dropping in price by 0.6 percent to an average of $3,475, according to the Miller Samuel report.