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Overall market conditions improved for landlords in March, as the Manhattan vacancy rate fell to the lowest level in 10 months.
- Rents, while down slightly for some apartment categories, remain near record highs in both Manhattan and Brooklyn.
- The Manhattan vacancy rate has experienced four consecutive months of declines. In March, the rate fell to 1.63% – from 1.74% in February. In fact, the last time there was less inventory available for rent was in May 2017, when the vacancy rate dipped to 1.58%
While move-in incentives were found on fewer leases in March, they remain a significant marketing tool.
- The percentage of leases that included a move-in incentive fell to 35% in March, from 46% in February. Year-over-year, their prevalence remained the same (also 35% in March 2017).
Quarterly trends show a mixed-bag of conditions.
- During the first quarter of 2018, rents declined slightly for all apartment categories when compared to the previous quarter, while they remained relatively unchanged overall when comparing year-over-year.
- The Manhattan vacancy rate fell to 1.77% during Q1 – from 2.16% in Q4 2017. It’s also lower than Q1 2017’s rate of 1.93%. This means fewer available apartment choices for potential tenants.
- During Q1 overall, 41% of new leases included an incentive, fewer than the 43% last quarter – but more than the 34% last year.
“With the vacancy rate falling to the lowest level in 10 months, there is increased demand for rental housing in New York. Part of this trend may be seasonal, as the rental market typically gains momentum in spring. In addition, some New Yorkers may have adapted a wait-and-see approach to buying property for the time being – due to recent stock market fluctuations and potential tax law changes. Signing a lease means less commitment. Whatever their motivation for renting, tenants remain price-sensitive, so landlord incentives remain in play – especially in the luxury segment – to create a sense of value in the marketplace.”
- Gary Malin, President of Citi Habitats