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Posh apartments see punishing rent hike

Rents on super-luxury apartments in Manhattan spiked 22% last year, according to a Thursday report by residential brokerage Douglas Elliman. Mark Menendez, the brokerage’s director of rentals, attributed the sharp rise to a host of people unable to find the perfect place to buy and instead turning to rentals. The company defines super-luxury as the top 5% of rental prices. “The lack of inventory in the sales market is still pushing the rental market,” he said. “The holding pattern for buyers is still pretty obvious.” Overall, median rents in December for Manhattan showed little change, ending the year at $3,150, according to Elliman. For 2012 as a whole, the median rent edged up a thin 0.8% “I think it’s good to see that the market is still tight,” Mr. Menendez said. “Prices are very healthy.” Citi Habitats came to similar conclusions in its year-end rental report. The brokerage reported a year-over-year rise in average rents of 5%, with the average rent ending at $3,412, capping a predictably quiet year. “It wasn’t as though the economy was rip-roaring and the unemployment rate went down to nothing,” said President Gary Malin. “Despite all of that, vacancies remain low and prices remain high; and I think that shows people’s commitment to Manhattan.” Citi Habitat’s Manhattan average vacancy rate for 2012 rose slightly to 1.2%, up from 0.9%, as more units came into the market. In Brooklyn, meanwhile, the median rent increased by 1.4% last year, according to Elliman, hitting $2,637 in December. Jonathan Miller, who prepared the Elliman analysis, theorized that Brooklyn is a little behind Manhattan, but that both show a similar pattern. “It looks like we’re transitioning from a period of rapidly rising rents to a period of modestly rising rents,” Mr. Miller said. The big change in the rental market in the borough last year was a sharp drop in the average number of days an apartment spends on the market, a figure that fell to 45 days in the fourth quarter, down a whopping 40.8% from December of 2011. This contrasted starkly with the situation in Manhattan, where days on the market went up to 57 from 37 days a year ago.

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