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Tenants during the fourth quarter saw high pricing, but also a lot of inventory and incentives.
- During the last quarter of 2017, the study found that rental pricing in both Manhattan and Brooklyn hovered near record highs. Meanwhile, Manhattan’s vacancy rate remained above 2%.
- Landlord concessions were found on 43% of leases during the fourth quarter, the highest percentage since Q1 2010.
However, when looking at the most recent data for December, we have seen a minor shift in recent trends.
In December 2017, rents fell slightly across the board when compared to the month prior.
- While the decrease in pricing from November was negligible for two- and three-bedroom homes in Manhattan, rents were down 1% for studio and one-bedroom units in the borough.
- In Brooklyn, rents were down 2% for studios and 1% for one-, two- and three-bedroom units.
The Manhattan vacancy rate declined from November to December.
- After three consecutive months of increases, available rental inventory in Manhattan fell to 2.09% of units in December from 2.14% the previous month. The vacancy rate has remained unusually high for the borough over the last two years. We attribute these conditions to aggressive asking rents across Manhattan, as well as an increase in ‘value’ housing options for renters in the outer boroughs.
The recent trend of rising landlord concessions has also reversed.
- In December, the use of incentives declined. Our report found that during the month, 41% of new leases included a give-away or concession to the new tenant (vs. 51% in November).
“New York’s rental market remains incredibly price-sensitive. Even small adjustments in pricing by landlords can cause increased demand for rental housing. While asking rents were boosted by incentives in recent months, our research shows that the market may be at the beginning of a potential shift. It will be interesting to see if overall rents continue to trend downward as 2018 progresses.”
- Gary Malin, President of Citi Habitats
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