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MANHATTAN RENTAL MARKET
BOOSTED BY INCENTIVES
Landlord concessions remain popular as the vacancy rate falls and rents rise slightly.
New York, NY (March 13, 2014) – Leading Manhattan real estate brokerage Citi Habitats released its monthly rental market report for February 2014 today. The results show slightly more favorable conditions for landlords when compared to the month prior. However, the percentage of transactions that include a move-in incentive remained relatively high, which is good news for would-be tenants.
The report found that average rents increased slightly for all apartment categories except three bedroom homes. Month-over-month, rents increased 1% for studio, one and two bedroom homes. In contrast, average rents for three bedroom apartments decreased by 1%.
In February 2014, the borough-wide vacancy rate fell to 1.50% from January’s rate of 1.62%. The last time the Manhattan vacancy rate was this low was in September 2013, when the rate reached 1.48%. This is the second straight month of vacancy rate declines.
The average Manhattan apartment rented for $3,417 during February 2014, $20 more than it did in January 2014, when the average was $3,397. Looking year-over-year, average rents are also up. The average apartment rented for $3,243 during February 2013, $174 less than it did last month.
In February, 12% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants, compared to 13% in January. A year ago, in February 2013, the percentage of concessions was also lower, at 8%.
While the percentage of leases with a landlord concession is the highest it’s been in two years, their use was most prevalent during the depth of the country’s economic downturn. The popularity of concessions peaked in December 2009, when a full 59% of leases included a move-in incentive.
“Currently, landlord incentives are helping drive traffic, decrease vacancies and increase pricing,” commented Gary Malin, President of Citi Habitats. “The market has spoken, and landlords really cannot push rents any higher without facing tenant backlash. In the coming months, rents will generally remain stable, but concessions will likely begin to disappear as winter fades from the rear view mirror.”
Click the image above to download a PDF of the full report which lists average rents by size and neighborhood.