Over the past several months, rents in Manhattan continued to rise, but at a much slower rate than we experienced earlier in the year. The number of rentals jumped this month as tenants sought greater affordability at the time of lease renewal. Negotiability and marketing times were low as the use of concessions by landlords remained rare. The tight mortgage lending and improving economic conditions are both helping to keep rents near record levels.
The number of new rentals in Brooklyn surged from this time last year as tenants sought relief from the rising rental prices. More potential tenants did this by seeking new places to rent in lieu of renewing existing leases. The price of a rental reached the highest level seen in over five years. Properties have been renting at a faster pace as negotiability continued to decline, consistent with the tight market.
"The Manhattan rental market has not seen a decline in rents for 26 consecutive months."
Rental prices continued to press higher for 26th consecutive month: The Manhattan media rental price increased by 1.8% to $3,150 from the same month last year. The last time this metric posted a decline was in June 2011, resulting in an unprecedented 26-month run. The average rental price increased 7.8% to $3,860 over the same period. Concessions from landlords continue to be rare with only 2.5% of all new rentals having some form of rewards, averaging the equivalent of 1 month of free rent.
The number of new rentals expanded as tenants resisted rent increases at renewal: There were 4,837 new rentals during the month, 44.9% more than the same period last year. The rise in new rentals suggested a drop in the rate of lease renewals as tenants continued to push back against rising rents. Inventory expanded by 5.6% over the same period as the resistance to lease renewals placed more properties on the market for a short period of time (i.e. market churn), consistent with the rise in vacancy rates.
Vacancy rate edged higher from later push into the summer: The Manhattan vacancy rate increased to 2.56% from 2.05% in the same period last year. The vacancy rate has returned to a more normal seasonal pattern after last year's torrid rental price growth threw year-over-year comparisons out of sync.
- The number of new rentals were up sharply from last year: There were 2,176 new rentals during August, up 54.8% from the same month last year. Studios, 1- and 2-bedrooms posted similar year-over-year gains of 43.7.%, 58.7% and 48.9% respectively. The 3-bedroom market more than doubled with a 109.5.% increase.
- The Downtown vacancy rate edged higher: The vacancy rate expanded to 2.56% from 2.05% in the same month last year.
- A large gain in number of new rentals: There were 1,305 new rentals during the month, 38.1% more compared to the same month last year. All size categories posted double digit increases from the same period last year; studios increased by 30%; 1-bedrooms increased by 34.4%; 2-bedrooms increased by 68.8% and 3-bedrooms increased by 17.6%.
- Modest rise in rental price in most categories: Median rental prices expanded by 3.6% to $2,895 compared to the same month last year. The 1-bedroom market showed the least significant gain rising only by 0.5% to $3,013, while the 3-bedroom market posted the largest gain, rising by 14.4% to $7,132.
- The East side rental vacancy rate surged: The vacancy rate jumped to 4.05% from 2.3% in the same month last year, posting a 1.75% increase.
- The number of new rentals jumped across the market: All size categories showed double-digit gains from prior year levels. The overall number of new rentals in the area rose by 46.3% over the same period due to large gains in the larger sized apartment category. Studios, 1-, 2- and 3-bedrooms increased 24.7%, 46.3%, 58.3% and 73.5% respectively.
- Rental prices were largely stable: Median rental price was $3,300, unchanged from the same month last year. While the 3-bedroom market jumped 24.2% from the prior year levels, the rest of the market remained largely unchanged over the same period. Studios slipped by 4%, 1-bedrooms decreased by 1.6% and 2-bedrooms rose by 1.1% from the prior year levels
- The West Side vacancy rate slipped: The vacancy rate declined by 0.39% to 2.09% from 2.48% in the same period last year
- Number of new rentals rose with studios and 3-bedrooms leading the way: There were 341 new rentals during the month, 16.4% more than in the same period last year. Large gains were seen in the studio and 3-bedroom markets, up 108.7% and 48.1% respectively. The 1-bedroom and 2-bedroom markets were essentially unchanged.
- Median price up overall with largest gains in the largest units: Median rental price increased by 13.5% to $2,150 from the same month last year. The 2- and 3-bedroom market segments rose 195 and 12.6% respectively over the same period. Studios slipped by 3% and the 1-bedroom posted a 4.85 increase.
- Uptown vacancy rate tightened from prior year level: The vacancy rate fell 0.71% to 1.15% from the same month last year.
Highest median rental price in over five years: All rental price indicators showed year-over-year gains. Median rental price increased by 4.6% to $2,850 from the same month last year, reaching record highs in over 5-year period. The year-over-year average gain of this price metric during this period was at 3.4%. Average rental price and average rental price per square foot both increased 3.6% and 6.9% respectively from the same period last year.
The number of new rentals jumped as rental prices pushed toward new highs: After showing stability over the last several months, the number of new rentals surged as median price reached record highs in over 5-year period. There were 554 new rentals during the month, 166.3% more than in the same month last year.
Days on the market and listing discount fell as rents continued to press higher: The average days on market for apartments that rented during the month was 39, 3 days faster than the same period last month. Listing discount followed the same pattern, slipping to 5.5% from 6.4% over the same period.
The 2-bedroom market showed largest year-over-year price gain: The 2-bedroom market that represents 35.2% of all rental activity, posted a 30.3% year-over-year increase in median rental price to $3,257. Despite the large gain, median rental price fell by 4.2% from more than a 5-year high of $3,400 set in the prior month.
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