Citi Habitats February Rental Market Analysis found that landlords made modest adjustments in pricing and increased their use of move-in incentives during the month.
The tactics have garnered the desired effect of reducing the vacancy rate – in a month that is traditionally the slowest of the year for rentals.
In February, the Manhattan vacancy rate fell to 1.74% – from January’s rate of 1.91%. This marks the third consecutive month of vacancy rate declines. In addition, February’s rate is the lowest the borough has experienced since June 2017 (eight months ago).
Some 46 percent of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in February – up from 43 percent in January.
These incentives remain remarkably high – and while they are most common on high-end product, they can be found on both new construction units and re-rentals alike.
“Landlords are taking a proactive approach to temper resistance to current rents,” explained Gary Malin, president of Citi Habitats.
“Through moderation in pricing and the continued use of concessions, they have been able to consistently reduce vacancy rates – while providing attractive opportunities for apartment seekers. There are a lot of great options for tenants, especially on the luxury end of the spectrum.”
In February 2018, the average monthly rental price for a Manhattan studio was $2,324. For one-bedroom homes, the average was $3,205. For two-bedrooms, the average rent was $3,974. Finally, the average three-bedroom apartment rented for $5,360.
Brooklyn studio apartments (in the 14 neighborhoods studied) rented for $2,290 per month on average. For Brooklyn one-bedrooms, the average rent was $2,765, while rents for two- and three-bedrooms clocked in at $3,556 and $4,781 respectively.
The most expensive Manhattan neighborhood for renters in February was SoHo/TriBeCa, with a median rent of $5,300. Gramercy/Flatiron was the second- priciest area – with a median rent of $4,200.
For Brooklyn, DUMBO was the most expensive neighborhood in February, with a median rent of $4,895 – followed by Downtown Brooklyn, where the median rent was $3,300 per month.
Manhattan rents were lowest in February 2018 in Washington Heights, with a median rent of $2,250. When examining neighborhoods below 96th Street, the Upper East Side was the least expensive neighborhood for renters with a median rent of $3,100.
Bedford-Stuyvesant, with a median February rent of $2,400, was the least-expensive Brooklyn neighborhood tracked in our report – followed by Crown Heights, where the median rent was $2,495.
With a vacancy rate of 1.26%, SoHo/TriBeCa was the Manhattan neighborhood with least inventory in February 2018, followed by the Upper East Side at 1.41%. On the other end of the spectrum, the vacancy rate was highest in Midtown East (at 2.47%) and Chelsea (at 2.13%).
Douglas Elliman Real Estate February Rental Market Report also showed record or near-record landlord concessions and declining net effective rents across all three boroughs.
“Record concessions in Manhattan, Brooklyn and Queens are once again the strongest leasing trend for this month,” said Hal Gavzie, Executive Manager of Leasing for Douglas Elliman Real Estate.
Jonathan Miller of Miller Samuel Inc., the author of the report, noted, “The report does not indicate any short term changes to current market conditions – concessions, declining rents, and continued new development skewing aggregate rents higher, will continue to be key takeaways.”