Manhattan’s average rents climbed upward while vacancy dipped in May, according to Citi Habitats’ monthly rental market report, resulting in more power being shifted to landlords.
Studio and one-bedroom apartments, the most common units in the borough, saw the steepest increase. Three-bedrooms climbed by 1% with two-bedrooms serving as the exception and dropping by 1%.
The vacancy rate, which sat at 1.36% in April, dropped to 1.17%. Vacancy has not been this scarce since June of 2013 when the tally sat at 1.10%.
The Elliman Report of Manhattan Rentals echoes Citi Habitats’ findings, noting that with new rental activity on the decline, current tenants are likely not finding the prospect of moving to be a more economical solution to accepting rent increases.
Following vacancy’s lead, landlord concessions has also headed downward in Manhattan with the amount of incentives—such as a free month’s rent or a waived broker fee—dipping from 9 to 7%.
The pro-landlords stats are not limited to Manhattan. Property owners in Brooklyn are seeing what Elliman is calling “stability” for rental prices after they spent the past year on the rise. That said, Brooklyn is losing ground in its bid to challenge Manhattan as the most desirable borough. Despite pulling within $200 of average rent earlier this year, Brooklyn may have reached the peak of its surge.
Luciane Serifovic, executive vice president and director of rentals at Douglas Elliman says that “We were wondering what was going to happen with the spread between Manhattan and Brooklyn. We started to think maybe Brooklyn is hotter than Manhattan. But the spread has actually widened. Brooklyn was like a skyrocket, now we are realizing that it’s leveling off.”
Regardless of which piece of Manhattan’s puzzle remains in the alpha spot, tenants shopping homes in either borough will be hard pressed to find a deal in the coming months.
“The Manhattan rental market has strengthened considerably in a relatively short period of time,” comments Gary Malin, President of Citi Habitats. “Unfortunately for apartment seekers, all signs point to a competitive summer season.”