New York—Average monthly rents in Manhattan increased 1.38 percent, with non-doorman, two-bedroom units experiencing a climb of 3.73 percent, according to The Real Estate Group NY (TREGNY)’s December 2010 Manhattan Rental Market Report.
“Typically we do see a slowdown in the market. This year was much different,” says Andrew Barrocas, CEO of TREGNY. “The market is [currently] more economy-driven than it is seasonal, where previous years it’s been more driven by season.”
Barrocas attributes much of this to the job market opening up, and the fact that people continue to move to New York. “I feel that we’ll see a strong market, with apartments continuously absorbed,” he tells MHN.
The U.S. Department of Labor reported an 8.4 percent unemployment rate for the New York-Northern New Jersey-Long Island metro area as of October 2010, during the same period that it reported the national unemployment rate at 9.6 percent.
“New York City is 1 percent below the national unemployment rate, so I think that that has a big effect. Although it doesn’t seem like a lot, 1 percent is certainly a big number in terms of how it’s affecting the Manhattan rental market. We work with a lot of new hires from fortune 100 companies and they are hiring right now … I see that the job market is starting to open up; companies are reporting big gains and the hiring freeze seems to be over,” reports Barrocas.
Inventories fell 4.52 percent, on average. Non-doorman units fell 5.86 percent, while doorman units fell 3.51 percent. According to TREGNY’s report, this is the largest change sine June.
Year-over-year, non-doorman studios were up 8.94 percent in rents; non-doorman one- and two-bedroom units saw an increase of 5.99 percent and 1.63 percent, respectively. At the same time, doorman studios saw a 10.45 percent increase, while one- and two-bedroom units saw an increase of 6.21 percent and 4.57 percent, respectively.
Much of Manhattan’s growth appears to be in larger units. “We’re seeing a trend that larger inventory is getting swooped up pretty quickly,” says Barrocas. “Three or four years ago people were jumping into the higher-end market; because you have to put so much down [for] the more expensive apartments, you see families who would have once purchased … don’t want to tie up their money in real estate right now … so they are opting to renting larger-sized apartments.”