Photo: Robert Clark
The number of new leases hit a nine-year high in August, according to a report released today by Douglas Elliman.
And the New York brokerage says a large number of new units hitting the market is the cause of the spike.
Some 7,061 new leases were signed in August in Manhattan, up 12.3 percent from last year and up 15.1 percent from July. This was the highest number of signings since they first tracking the data nine years ago, says Jonathan Miller, CEO of the appraisal firm Miller Samuel, Inc. and author of the Elliman report.
“There is a tremendous amount of inventory coming on to the market so each rental is considered a new lease. In addition, tenant pushback at the time of lease renewal contributed to the high number of new lease signings,” Miller tells BuzzBuzzNews.
The percentage of leases that included landlord incentives continued to double year-over-year in August. Just over 24 percent of new leases included incentives, up from 12 percent last year.
Landlords use incentives to attract new tenants and keep units filled, keeping the borough’s vacancy rate in check. Incentives typically include a period of free rent, although landlords have begun to get more creative by offering high-tech lures like Netflix and Hulu subscriptions. The average incentive in August was 1.3 months free rent, unchanged from the previous month.
Manhattan’s vacancy rate rose to 2.27 percent in August, up from 2.14 percent last year. This was the first annual rise in the borough’s vacancy rate in five months as inventory increased, and too early to declare the uptick a trend.
“Up until this month, the elevated level of concessions have kept the vacancy rate in check,” Miller tells BuzzBuzzNews.
Landlord’s use of incentives was up annually city-wide in August: doubling to 20 percent in Brooklyn, and skyrocketing to nearly 45 percent from just under of 9 percent in Queens — the second highest level of the year for Queens.
Meantime, Manhattan’s listing inventory rose 0.3 percent from last year in August and has increased annually in 22 of the last 23 months, says Miller.
Rents remained steady in Manhattan for the month, with both median and average rents recording modest yearly gains of 1.4 percent and 1.3 percent, respectively. The average rent for a Manhattan apartment was $4,088 while the median price was $3,442 in August.
Click here to read the entire report.