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Overall rents in Manhattan and Brooklyn continued to trend downward.
- When comparing December to the previous month, pricing decreased the most for studio apartments, where rents fell 2%. Average rents for one- and two-bedroom units experienced a minor 1% drop, while average pricing for three-bedroom homes increased by a minimal amount.
- In Brooklyn, rents for studio and three-bedroom apartments fell 2% since November, while they declined 1% for one- and two-bedroom units.
However, most tenants still paid more for Manhattan apartments then they did in the previous year.
- Studios rented for 7% more on average in December 2016 than during the same period the year prior. Rents for one- and two-bedroom homes increased in price by 2%, while pricing for three-bedroom homes remained stable year-over-year.
Incentives helped boost the market during the December lull.
- In December, many building owners took a proactive approach to the use of incentives, and their usage increased month-over-month. In fact, the percentage of leases that included a concession hit 35%, the highest level since April 2010. While Manhattan rents declined and the overall vacancy rate increased, both shifts were relatively minor month-over-month, thanks in part to the savvy use of incentives.
However, the Manhattan vacancy rate remained at a level not seen since 2009.
- The Manhattan vacancy rate reached 2.13% in December 2016, which is a slight rise from November’s rate of 2.11%. However, vacancies across the borough are still comparatively high – historically speaking. The last time this much inventory was available on the market was in April of 2009, when 2.28% of homes were available for rent.
“The most recent data for December shows there is considerable local demand for rental housing. However, there is still a disconnect between the rents that landlords want to achieve and the pricing tenants are willing to pay, which is why concessions remain a significant force in the marketplace.” – Gary Malin, President of Citi Habitats
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