Renters beware: Prices are going up!
Manhattan vacancies seen as slipping below 1% as soon as next month; rents for studios up 7% in a year, while three-bedrooms soared 12%.
Renting an apartment in Manhattan is getting harder, says a new report. Rents are up, landlords are not offering concessions and the vacancy rate remains low.
“Tenants will have to recalibrate their expectations,” said Gary Malin, president of Citi Habitats. “The harsh reality is renters better act or they are going to regret it.”
The data feeding these dire warnings includes a 24% drop in the number of apartments on the market in February compared with the same month in 2010, according to Citi Habitats, the city’s largest rental brokerage. The vacancy rate in Manhattan dropped to 1.18% in February, down 0.36 percentage points from the same time a year ago and 0.08 percentage points from January alone. If the vacancy rate continues to drop, Mr. Malin expects it to sink below 1% by early April. Meanwhile, a mere 16% of the brokerage’s deals offered a free month’s rent and or payment of the broker fee as a tenant incentive, compared with 21% last month.
“February experienced summer-like conditions,” he said, adding that spring and summer are typically strong seasons for the rental market. “If things continue the way they are going, we are in for an extremely tight rental market.”
Rents for apartments of all sizes were on the rise last month. Studios were up 7% to $1,756, one-bedrooms rose 9% to $2,335, two-bedrooms were up 10% to $3,283 and three-bedrooms climbed 12% to $4,347 from February 2010.
Demand for rentals is strong with even new developments getting leased up quickly. Since the 301-unit Beatrice in Chelsea opened its leasing office in August, nearly 95% of the units have been rented, according to Citi Habitats. Similarly, the 338-unit Continental, located at 885 Sixth Ave., on the corner of West 32nd Street, opened two months ago and is now just shy of being 30% leased.