MANHATTAN’S RENTAL MARKET PUTS ON THE BRAKES
The borough’s rents stabilize, as the vacancy rate climbs.
New York, NY (August 14, 2014) – Leading Manhattan real estate brokerage Citi Habitats released its monthly rental market analysis for July 2014 today. The report revealed a notable shift in market conditions, as the slow but steady march of increasing rents came to an abrupt halt. In addition, the borough’s vacancy rate ticked up – to a level not seen since April.
The report found that average rents remained flat for studio, one and two-bedroom homes. While prices for studio and two-bedroom units increased, and rents for one-bedroom apartments declined, all changes in these categories were statistically negligible. For three-bedroom homes, rents fell by 2% on average.
In July 2014, the borough-wide vacancy rose to 1.25% from June’s rate of 1.10%. This is highest vacancy rate we have seen since April, when the rate was 1.36%. In addition, July’s vacancy rate increase ends six months of steady vacancy rate declines.
When examining incentives, 6% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in July, unchanged from June.
“Because the vacancy rate in late spring/early summer was so tight, many landlords were aggressive with their rents. Tenants are finally reaching their pain threshold,” commented Gary Malin, President of Citi Habitats. “Quite simply, renters make their decision on where to move based at least in part on economics, and there is a limit to what most people can afford in rent. Brooklyn and Queens have become more viable options for many people than they were before, so Manhattan has some serious competition. Many home seekers are seeing better value in the outer boroughs, staying put, or making the transition from renter to homeowner.”
Additional relevant findings of the Citi Habitats July 2014 monthly rental report are outlined below:
- In July 2014, the average monthly rental price for a Manhattan studio was $2,170. For one-bedroom homes, the average was $2,895. For two-bedrooms, the average rent was $4,030. Finally, the average three-bedroom apartment rented for $5,189.
- When comparing rental prices year-over-year, rents increased 3.1% for studio units, 3.6% for one-bedrooms and 2.3% for two-bedroom homes from July 2013 to July 2014. In contrast, rents for three-bedrooms decreased by 1.9% during the same period.
- As usual, the most expensive neighborhood for renters in July was SoHo/TriBeCa, with a median rent of $5,300. The Financial District/Battery Park City was the second priciest area, with a median rent of $3,600.
- The least expensive area for renters in Manhattan during July 2014 was Washington Heights, with a median rent of $1,980. When examining neighborhoods below 96th Street, the Upper East Side’s median rent of $2,295 was the lowest of all areas in this section of the borough.
- Vacancy rates have increased for every Manhattan neighborhood except the Upper West Side and West Village, where vacancies declined. With a rate of 0.94%, The Upper West Side was the neighborhood with least inventory in July 2014. On the other end of the spectrum, the vacancy rate was highest in the East Village. Last month, 1.73% of homes in the neighborhood were vacant.
- When comparing the borough’s vacancy rate year-over-year, there was still less inventory on the market in July 2014 than there was last July, despite the recent vacancy rate increases. In July 2013, the Manhattan vacancy rate was 1.28%, slightly higher than July 2014’s rate of 1.25%.
Click the image above to access the full report