Median on new leases rose to $4,175 in March, even as apartment hunters got more listings to choose from.
Manhattan apartment landlords are testing renters’ limits even before the market’s busiest season arrives.
The median monthly rate rose to a record-high $4,175 in March, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. That’s up $25 from the previous peak, reached in July, and almost 13% more than a year ago.
Manhattan Apartment Rents Hit a Record in March
Monthly rates were up $25 from the previous peak, reached in July
“Landlords are finding that they’re pushing rents and they’re actually getting it,” said Jonathan Miller, president of Miller Samuel. His proof: The average lease was signed with a 0.7% discount from the listing price, well below the 5% discount that new leases got in February.
“The spread between what they’re asking and what it’s renting for is compressing,” Miller said, “and I don’t think that’s because landlords are lowering the prices of their listings.”
Apartment hunters haven’t been able to catch a break even as more units became available and the borough’s vacancy rate continued to tick up. And the busiest and most expensive period of the year for rentals — traditionally July and August — is still ahead, signaling more record highs to come. Only an economic downturn and major job losses would shift that upward trajectory, according to Miller.
The number of new leases signed last month was up 15% from a year earlier, suggesting that many renters opted against renewing and moved on. Those on the hunt had more choices, with listing inventory up 41% from last March. But apartments were scooped up more quickly, spending 39 days on the market, down from 61 days a year ago.
Agents have been seeing more interest from renters for the past three weeks or so as New York’s weather has gotten warmer, said Hal Gavzie, Elliman’s executive vice president for residential leasing. With inventory still limited, people are digging into more stagnant listings.
“Apartments that were sitting on the market for, say, 60 days or more now are rented,” Gavzie said.
The rent record was accompanied by other new peaks. The median rate for one-bedroom apartments, which made up 44% of new leases in March, reached an all-time high of $4,150. And across all unit sizes, what tenants paid after factoring in landlord concessions — such as free months or broker fees — hit its own record at $4,124.
In all, 15% of new leases came with concessions, down from 18% last March. The average savings amounted to 1.4 months of rent, slightly less than the 1.5-month average on deals signed a year ago. The borough’s vacancy rate rose to 2.54% last month from 1.89% a year earlier.
Renters in search of better deals may have turned to outer boroughs, pushing up costs there. Brooklyn’s median was $3,493 in March, up 16% from a year earlier and just $7 less than the all-time high reached in August. In northwest Queens, the neighborhoods closest to Manhattan, the median rose 14% to $3,300.
Gavzie doesn’t see rents coming down in Manhattan, but he also doesn’t think the sky’s the limit.
“There’s a ceiling,” he said. “These numbers that we’re seeing, I’m not sure how long they’re sustainable for.”
Source: bloomberg.com
