Oct. 8 (Bloomberg) -- Manhattan apartment rentals plunged 59 percent in the third quarter from a year earlier as job losses and discounts in the sales market sapped demand during the city’s prime leasing months.

New lease signings dropped to 2,549 from 6,208, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today in a report. The median rent fell 7.7 percent to $2,950, with the most expensive units -- four-bedroom apartments -- declining the most.

“New York City unemployment continues to rise, and the rental market correlates closely with trends in unemployment,” Jonathan Miller, president of Miller Samuel in New York, said in an interview. “The success of the sales market in the summer came at the expense of the rental market.”

Rental transactions fell more than 50 percent in every part of Manhattan, as the city’s jobless rate climbed to 10.3 percent in August. Manhattan is grappling with a recession and global credit crisis that has led to the loss of more than 183,000 banking and securities jobs in the Americas.

New lease signings for studio apartments fell 62 percent to 604. The median rent for studios slid 17 percent from last year to $2,000. The median for a one-bedroom apartment fell 11 percent to $2,895 as transactions dropped 61 percent.

Two-bedroom apartment rents slid 2 percent to a median of $4,700. There were 59 percent fewer leases signed for that size residence in the quarter.

Four Bedrooms

Rents for four bedrooms decreased 47 percent to a median of $12,000, while three-bedroom units dropped 4.8 percent to $6,800.

Discounts off the original rent for apartments averaged 7 percent, up from 3 percent a year earlier.

The report, based on rental data from the Real Estate Board of New York and brokers, doesn’t account for concessions offered by landlords, such as a month’s free rent or payment of a broker’s fee on the tenant’s behalf.

“You’re seeing renters coming in with the expectation of owners paying it, and we didn’t see that last year,” said Jason Haber, a broker with Prudential Douglas Elliman. “A year ago, the commission was paid for by the renter, no question about it.”

The inventory of available rental apartments climbed 5.4 percent from a year earlier to 6,527. Units stayed on the market close to a month longer than in the same period of 2008, or an average of about 77 days.

‘Wasn’t Planned’

“You are seeing a lot of rental product come to the market that wasn’t planned to be rental,” Miller said. “They are either people who can’t sell their properties, or developers who are looking for cash flow are opting to rent units in their buildings.”

Across the U.S., apartment vacancies rose to 7.8 percent in the third quarter, the highest since 1986, as increasing unemployment reduced rental demand, Reis Inc. said.

Nationally, actual rents paid by tenants, known as effective rents, declined 2.7 percent from a year earlier, the New York-based property research firm said in an Oct. 6 report. Asking rents, or what landlords sought, fell 1.8 percent.

Manhattan apartment sales jumped 46 percent from the second quarter, the biggest third-quarter increase since 1996, according to an Oct. 2 report by Miller Samuel and Prudential. Demand was fueled by a second consecutive quarter of price declines, Miller said.

Rental transactions during the same quarter declined across the borough. Downtown, defined as the general area below 34th Street, new leases fell 61 percent to 1,089. The median rental price was little changed at $3,300. On the East Side of Manhattan, new rentals declined 58 percent to 801, while the median rent fell 22 percent to $2,500. On the West Side, new transactions dropped 54 percent to 632, while rents fell 4.8 percent to a median of $2,950.

‘Fantastic Situation’

For Joe Vicari, 41, the apartment hunt in the third quarter meant landing a unit in the newly opened Columbus Square complex on the Upper West Side where he got one month of rent free and use of the fitness center.

His building has landscaped gardens above street level, a saltwater pool, and a new Whole Foods Market Inc. store downstairs. For a net rent of $3,600, his 700-square-foot apartment with washer and dryer costs less than his last place in TriBeCa, where the landlord was not open to negotiating the price.

“A year and a half ago, that same apartment would have been $1,000 a month more -- at least,” said Vicari, director of the hospitality group at Shawmut Design and Construction in New York, which constructs restaurant interiors. “I got a really fantastic living situation.”

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.

Last Updated: October 8, 2009 11:04 EDT