Concessions, such as a free month’s rent or a waived broker fee, are typically more common in the colder months, but not this year, brokerage Citi Habitats found.Getty
Those looking to move to, or within, Manhattan this season should expect high prices and a need to compromise on amenities like specific neighborhoods or a doorman, according to firms that released market reports this week.
Brokerage Citi Habitats reported that rents dropped 1% from November to December 2018, but that still left them with average prices of $2,475 for studios and $3,179 for one-bedrooms.
Douglas Elliman, meanwhile, found that average rents dropped .3%, resulting in $2,687 for a studio and $3,557 for a one-bed.
The high averages are skewed by a surge in luxury new developments, noted Jonathan Miller, CEO of the real estate appraisal firm Miller Samuel, which compiles the Elliman reports. However, at the same time, few properties are opening in the affordable market, a term Miller said now refers to the middle class rather than just subsidized housing. That means the prices for apartments in the lower end are being driven up by demand. Plus, though rents are dropping, they’re falling from record-highs, so they’re still expensive, he said.
“Because of land prices, development is more expensive than ever and developers build what’s economically feasible, so they can’t build affordable buildings like they used to,” Miller explained.
The high prices aren’t necessarily benefiting property owners, added Citi Habitats president Gary Malin. According to his firm, Manhattan’s vacancy rate rose from 1.55% in November to 1.6% in December. While vacancies typically climb in the winter because people don’t like to move in the cold, Malin noted that landlords who want to fill their empty spaces should reassess their pricing.
In addition, Citi Habitats found that the number of concessions, or deals such as a free month’s rent or a waived broker fee, are also dropping this season. In December, the brokerage reported that 29% of its leases included these types of incentives, down from 34% the month before. This surprised Malin since concessions are often used to lure renters in slower months, but he noted that landlords are trying to protect their wallets, too.
“Tenants are constantly struggling with what they can afford, and owners obviously want to do the best they possibly can,” Malin said. But, he warned, “tenants are smart, they’ll shop building to building, location to location. They’re in the driver’s seat, to a certain degree.”
Those who are currently shopping for rentals can find deals if they keep an open mind, he said. For affordability, he advised against demanding to live in a new development or the hottest neighborhood. Be willing to look in the outer boroughs too, he added.
“Inside Manhattan, along with Brooklyn, Queens and the Bronx, in every market, there’s great apartments that you can find as long as you’re somewhat reasonable,” Malin said. “They can be in a walk-up in a great location, or an elevator building with no amenities, or an older building that hasn’t gone through renovations.”