July rents saw a dip, according to a monthly report from Citi Habitats. The biggest decline was for one-bedroom homes, where rents fell three percent month-over-month.
Manhattan’s vacancy rate rose to 1.92 percent – the highest vacancy rate for July since the firm started tracking the rental market in 2002.
Meanwhile, the percentage of landlord concessions increased to levels that are unusual for the summer ‘busy’ season.
“The fact we are trending towards a two percent vacancy rate despite the busy summer season shows we are in a very price sensitive market,” said Gary Malin, president of Citi Habitats.
“The use of concessions and slight rent adjustments by owners has failed to significantly move the needle. Today’s renters are increasingly open to living in the outer boroughs or New Jersey.
“In order to reverse this trend, Manhattan landlords will either have to become more liberal with their incentives – or adjust their pricing to reflect the changing conditions.”
The average Manhattan apartment rented for $3,508 in July 2016, $18 less than it did in June. Year-over-year, average rents are up — the average apartment rented for $3,501 during July 2015, $7 less than it did last month.
In July, the borough-wide vacancy rose to 1.92 percent from June’s rate of 1.70 percent.
For reference, the Manhattan vacancy rate in July 2015 was 1.42 percent, and during July 2009 (the height of the ‘great recession’) the rate only reached 1.67 percent.
When examining concessions, 19 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 July, up from 16% in June.
Looking year-over-year however, their prevalence increased substantially. In July 2015, eight percent of leases offered a move-in incentive.
The percentage of concessions hasn’t been this high in the month of July since 2010. That month, a full 25 percent of new leases came complete with an incentive to the new tenant.
The most expensive neighborhood for renters in July 2016 was SoHo/TriBeCa, with a median rent of $6,310.
Gramercy/Flatiron was the second-most priciest area – with a median rent of $4,595.
Rents were lowest in July 2016 in Washington Heights, with a median rent of $2,200.