Photo: Robert Clark
Last month Manhattan renters took advantage of cooling prices and tempting incentives from landlords. New lease signings were up dramatically from last year in June, according to a newly released report by New York brokerage Douglas Elliman.
Overall Manhattan apartment prices remained mostly unchanged from last year in June. The average rent dropped just 0.2 percent year-over-year to $4,126. At the same time, the average price per square foot decreased 1.6 percent year-over-year to $66.86.
Prices did, however, increase in Manhattan’s new construction submarket. The median price rose 11.1 percent from last year to $4,795 in June.
But while prices remained flat, the number of new leases signed jumped nearly 27 percent from last year in June. Some 6,604 new leases were signed last month, with a 1.7 percent average discount on the original listing price — down slightly from last year.
Prices have been cooling in recent months, and the good news for renters is that this trend is likely to continue.
“I think we will see this pattern through at least the end of the year, probably longer. The influx of new product is still coming into the housing stock, causing softer conditions at the upper half of the market,” Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the Elliman report, tells BuzzBuzzNews.
Landlord incentives doubled from last year in June. Nearly 24 percent of new leases had incentives, up from 9.7 percent during the same time last year. Landlords will often use incentives, typically a period of free rent, to entice new renters and fill empty units. Some landlords have become more creative with their incentives, offering free Netflix to new lessees.
The use of incentives helps keep the vacancy rate in check. Last month the vacancy rate in Manhattan fell to 2.21 percent from 2.30 percent in June 2016.
Incentives were also partly the cause of the big bump in the number of new leases for the month.
“It helped significantly. The rise in new leases is also a function of tenant resistance to the offered rent terms at the time of renewal,” Miller says.
As more new construction units enter the market and rent remains high, renters are pushing back at the time of renewal, Miller explains.
And although prices were steady and the use of incentives was way up, apartments were on the market longer last month compared to last year. The average days on market rose to 41 days in June, up from 39 days last year.
Listing inventory was up 5.1 percent from last year in June and renters had 7,824 apartments to choose from last month.
Meanwhile, Manhattan’s “luxury” renters got some relief in June as well. Prices dropped 5.5 percent in the luxury submarket, which includes the top 10 percent of apartments by price. The average luxury apartment in Manhattan cost $10,040 in June, down from $10,625 last year. The number of new luxury leases signed soared almost 26 percent year-over-year in June.
Click here to read the entire report.