Manhattan Apartment Rents Jump as Vacancies Rate Tumbles
Manhattan apartment rents jumped last month, extending a surge in costs as availability tightens during the market’s peak season.
The median monthly rent rose 3.3 percent in June from a year earlier to $3,300, according to a report today by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. A separate report by brokerage Citi Habitats showed the average rent reached $3,470, the highest in records dating to 2002.
Rents are increasing following a lull at the end of 2013 and early this year, when vacancies rose after a jump in home sales. Apartment costs will continue to climb, pushing some people out of Manhattan to other boroughs, until employment improves and mortgage lending returns to historically normal levels, said Jonathan Miller, president of Miller Samuel.
“The drivers of rising prices aren’t going away any time soon,” Miller, a Bloomberg View contributor, said in a telephone interview. “Prices have been elevated in Manhattan for a number of years. That has been a key driver of the Brooklyn rental market. Now you are seeing people proceed out of Brooklyn and looking at Queens.”
Miller Samuel and Douglas Elliman’s median Manhattan rent was the highest since a one-month spike to $3,695 in February 2009, when the credit crisis damped demand at the low end of the market.
The vacancy rate in Manhattan fell to 1.64 percent last month from 1.83 percent a year earlier, the Miller Samuel and Douglas Elliman report showed. It was the lowest for June in five years. Landlords’ use of concessions to fill apartments, such as a free month’s rent, also declined.
Much of the increased demand is seasonal, as late spring and early summer months are typically among the busiest for the Manhattan rental market, due in part to arrival of new graduates in the city, according to Citi Habitats. Apartment seekers can expect more inventory and less competition as the weather cools, the brokerage said.
In Brooklyn, New York’s most populous borough, new leases surged 62 percent, indicating resistance to price increases at the time of renewal, according to Miller Samuel and Douglas Elliman. Rents rose 2.3 percent from June 2013, bringing the monthly median to $2,800, or $500 less than in Manhattan.
In February, the difference was just $210, the smallest since Miller Samuel and Douglas Elliman began tracking the Brooklyn market in 2008.
Luxury apartments in Manhattan, the top 10 percent of leases by price, cost a median of $8,848 a month in June, up almost 11 percent from a year earlier.
Among Manhattan neighborhoods, leasing costs last month were highest in Soho and Tribeca, ranging from an average of $2,620 a month for studios to $7,906 for three-bedroom homes, according to Citi Habitats.
Washington Heights had the lowest housing costs, with studios leasing for $1,250 on average, while three-bedroom apartments commanded $2,472, the brokerage said.
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