Manhattan Apartment Renters Push Back to Find Better Dealsby
Newly signed leases jumped 34% in June, the most in four years
Concessions granted in 9.7% of deals amid a surge of listings
Manhattan renters left their apartments in search of better deals last month, pushing back against landlord price increases and taking advantage of a flood of new choices on the market.
New apartment leases totaled 5,203, a 34 percent jump from a year earlier and the first increase for June since 2012, according to a report Thursday by appraiser Miller Samuel Inc. and broker Douglas Elliman Real Estate. Landlords granted concessions in 9.7 percent of all new deals, the highest share for June in more than five years of record keeping.
“Tenants are resisting rent increases at renewal and trying options elsewhere,” said Jonathan Miller, president of Miller Samuel. The jump in newly signed leases suggests that “the landlord and the tenant are not in sync about the market.”
Apartment dwellers are seeking relief where they can in a Manhattan rental market where median costs have climbed 21 percent since the end of the recession in June 2009, according to Miller. They’re being helped by a surge of new listings, which is giving tenants the ability to bargain in a month when landlords typically don’t. The number of apartments marketed for rent at the end of June jumped 27 percent from last year to 7,442, according to the report.
“The conditions are showing more weakness than we’ve seen over the last couple of years,” Miller said. “Landlords are having to work a lot harder.”
Apartment owners agreed to whittle an average of 2 percent off their asking rents last month to strike a deal, compared with the 1.1 percent discount they offered a year earlier, Miller Samuel and Douglas Elliman said. The median rent before concessions such as a month’s free rent are factored in was $3,444, up 2.2 percent.
June is typically a busy month for leasing in New York, with college graduates settling in after taking jobs and families moving before the start of the next school year. For the past three years, new agreements fell in June because escalating prices spurred existing tenants to sign renewals or seek alternatives outside the borough, Miller said. Now, the new listings have given them reasons to stay and negotiate.
That’s creating a disconnect between apartment seekers and landlords who see the summer months as a time to hold firm, said Gary Malin, president of Citi Habitats, which released its own report on the Manhattan rental market Thursday.
“If you’re an owner, this is prime time -- May, June, July, August -- so they feel emboldened to push prices,” Malin said. Apartment seekers are “just not willing to bite at certain prices at this moment because they feel it’s a little bit out of reach for them. If they can’t find what they want, they’ll either wait a little longer or they’ll move to a different borough.”
Manhattan’s vacancy rate rose to 1.7 percent last month, the highest for June in Citi Habitats data since 2002. The brokerage didn’t report on the number of rental agreements.
Leasing jumped in Brooklyn and Queens last month, in part because newly built luxury towers drew renters seeking better values than they could find in Manhattan, according to Miller. New leases in Brooklyn jumped 21 percent to 1,063, while the median rent climbed 2.9 percent to $2,880, Miller Samuel and Douglas Elliman reported.
While new developments helped swell Brooklyn’s apartment supply by 33 percent, units listed for rent moved faster, taking an average of 44 days to find a tenant, compared with 51 last June, the firms said.
Francesca Canepa, a 27-year-old fashion designer, and her husband were only browsing for Brooklyn apartments last month, not intending to move before the lease on their place in Manhattan’s Upper East Side was up at the end of August. For five years, the couple lived in an older building with few amenities, and saw their rent climb about $100 annually. They wanted a fresher, bigger space with more perks for the $3,100 a month they’d been paying, Canepa said. They also didn’t want to pay a broker’s fee.
Through an online search of listings, they connected with Citi Habitats leasing broker Lucy Gallucci, who took them on a tour of 25 apartments in five newly built Brooklyn towers where the landlord promised to cover Gallucci’s fee. They found a 1,000-square-foot (93-square-meter), one-bedroom unit with a terrace at The Giovanni, a 15-story building completed last year in downtown Brooklyn with amenities such as a billiards and table tennis room and a landscaped public terrace. The couple’s rent would be higher -- $3,800 a month -- but the landlord offered one month free. They broke their lease on their Yorkville apartment and moved to the Giovanni last week.
“I’m finding that people are wanting to move because they either want more for their money, they want more space and light,” Gallucci said. “A lot of clients, they don’t want an old, crusty kitchen. They want something new.”
The median rent in Brooklyn climbed 2.9 percent to $2,880, according to Miller Samuel and Douglas Elliman. Concessions, such as a month’s free rent or payment of a broker’s fee, were included in 6.2 percent of all deals last month, up from 3 percent a year earlier.
In northwest Queens, where the skyline is dotted with glassy new rental towers, new leases more than doubled last month to 287, Miller Samuel and Douglas Elliman said. The median rent in the area -- which encompasses the neighborhoods of Astoria, Long Island City, Sunnyside and Woodside -- climbed 10 percent to $2,787.
“Consumers are considering their options,” Miller said. “They’re trying to seek out affordability elsewhere.”