Inventory remains tight while prices continue to rise for the 15th consecutive month in Manhattan, according to the just released rental reports from the city’s top brokerage firms.
Citi Habitats reported that the Manhattan vacancy rate in the rental market hit its lowest number in nearly three years, falling to 1.07 percent, from April’s rate of 1.37 percent, the lowest since June of 2012, when it dropped to 1.01 percent.
The average price of an apartment rose to $3,475 in May 2015, a $16 climb since April 2014, when the average was $3,459. Year-over-year, average rents were also up, with the average apartment renting for $3,451 in May of 2014, $24 less than May 2015.
Soho/Tribeca had the highest median rent in May 2015, at $4,298, trailed by Gramercy/Flatiron at $3,995, and Battery Park City/Financial District at $3,950.
“Just when you think they have reached the ceiling, rents continue to climb. Unfortunately for many tenants, the largest gains in May were for studios and one-bedrooms,” said Gary Malin, president of Citi Habitats.
“In addition, we haven’t seen inventory levels this low in almost three years. This means desirable apartments will likely not last long — and apartment seekers should begin their search with funds and paperwork at the ready. Typically by this time of year, most landlord incentives would be off the field. But the silver lining to the high rental pricing is that they are still in play in some buildings.”
Studios and one bedrooms had the biggest upticks, with average studio apartment rental prices jumping 5 percent year-over-year, and one bedrooms rising two percent. Two and three-bedroom apartments increased 1 percent for both categories.
“This is the season,” said Andrew Barrocas, president of MNS Estate. “I think you’re going to continue to see prices rise. If new inventory isn’t being brought to the rental market, and rental buildings are being taken off the market and converted to condos, I think as the economy continues to grow and job market continues to strengthen, we’re going to see rental prices continue to rise.”
Barrocas pointed out that a lot of new inventory is being brought into Brooklyn and Queens, and new hot spots are being created, while price points are being stretched.
“I don’t see you’ll see the growth we’ve seen the last few years in some areas, but we will continue to see rental prices grow and new areas grow.”
In Brooklyn, average rental prices in decreased slightly since last month, by just 0.13 percent, from $2,724 in April 2015 to $2,720 in May 2015. Rental prices increased 0.14 percent since this month last year – from $2,716 in May 2014, to $2,720 in May 2015.
Inventory shot up 19.54 percent in Brooklyn since last year, from 3,019 rental units in April 2015 to 3,609 units in May 2015. Crown Heights took the top spot for most new listings in May with 116, more than any other Brooklyn neighborhood, but Williamsburg still claims the highest inventory.
The not-yet gentrified Prospect Lefferts Gardens, a neighborhood east of Prospect Park, “has the makeup of a very strong, healthy rental market,” said Barrocas, pointing to the proximity of the neighborhood to the park and public transit.
He added that he expects that the popular Brooklyn nabes of Crown Heights, Prospect Heights, and even Kensington, Ditmas Park, will continue to flourish.