Apartment Rents Still Ballooning in Manhattan
- Jul 20, 2012
New York—Landlords have it good in Manhattan, at least in terms of a recovery in rental rates in recent years, according to a new report by Real Impact Real Estate. Comparing all average June rents over the past six year, this year surpassed 2007 rents by about 3 percent, the report notes. Compared with the trough of 2009, rent growth has been 15 percent in Manhattan, including over 6 percent year per year in 2010 and 2011.
Although overall Manhattan rents didn’t move much in June compared with May, some kinds of properties experienced month-over-month increases. One-bedroom units showed the largest increase, up 1.2 percent.
But Manhattan one-bedroom properties have seen a slower recovery over the past five years than other sizes. “On the ground, we saw those one-bedroom renters being more price sensitive and flocking either to a studio or pairing up for a two-bedroom, forcing a quicker recovery for those unit types,” the report notes. Overall, apartment rents are 3 percent higher than in 2007, but not for one-bedroom units, whose rents are only 1.1 percent higher than five years ago.
Rents are expected to continue their upward trajectory, however. Any renter now up for renewal on a two-year lease will see an average rent increase of 12.8 percent for all unit types when compared to average rent from June 2010. “The biggest sticker shock [in June] was in the 15.4 percent two-year renewal on non-doorman two bedrooms that went from $3,720 in June 2010, to $3,830 in June 2011, to $4,293 in June 2012,” Real Impact Real Estate reports.
As usual for Manhattan, rental growth has been uneven, varying from submarket to submarket. Non-doorman studios in Greenwich Village were up 5.2 percent in June, for instance, and both doorman and non-doorman one-bedrooms in Gramercy spiked 6.1 percent. Those were the largest increases for the month.
Remarkably, the company was able to report some parts of Mahanttan where rents were down month-over-month in June. These included, for example, Harlem, where doorman one-bedrooms were down 0.7 percent; doorman one-bedrooms on the Lower East Side, down 2.2 percent; non-doorman studios on the Upper East Side, down 2.6 percent; and non-doorman studios in Midtown West, off 4.4 percent.