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Manhattan apartment renters push back in search of better deals
[NEW YORK] Manhattan renters left their apartments in search of better deals last month, pushing back against landlord price increases and taking advantage of a flood of new choices on the market.
New apartment leases totaled 5,203, a 34 per cent jump from a year earlier and the first increase for June since 2012, according to a report on Thursday by appraiser Miller Samuel Inc and broker Douglas Elliman Real Estate. Landlords granted concessions in 9.7 per cent of all new deals, the highest share for June in more than five years of record keeping.
"Tenants are resisting rent increases at renewal and trying options elsewhere," said Jonathan Miller, president of Miller Samuel. The jump in newly signed leases suggests that "the landlord and the tenant are not in sync about the market."
Apartment dwellers are seeking relief where they can in a Manhattan rental market where median costs have climbed 21 per cent since the end of the recession in June 2009, according to Miller. They're being helped by a surge of new listings, which is giving tenants the ability to bargain in a month when landlords typically don't. The number of apartments marketed for rent at the end of June jumped 27 per cent from last year to 7,442, according to the report.
"The conditions are showing more weakness than we've seen over the last couple of years," Miller said. "Landlords are having to work a lot harder."
Apartment owners agreed to whittle an average of 2 per cent off their asking rents last month to strike a deal, compared with the 1.1 per cent discount they offered a year earlier, Miller Samuel and Douglas Elliman said. The median rent before concessions such as a month's free rent are factored in was $3,444, up 2.2 per cent.
June is typically a busy month for leasing in New York, with college graduates settling in after taking jobs and families moving before the start of the next school year. For the past three years, new agreements fell in June because escalating prices spurred existing tenants to sign renewals or seek alternatives outside the borough, Miller said. Now, the new listings have given them reasons to stay and negotiate.
That's creating a disconnect between apartment seekers and landlords who see the summer months as a time to hold firm, said Gary Malin, president of Citi Habitats, which released its own report on the Manhattan rental market on Thursday.
"If you're an owner, this is prime time - May, June, July, August - so they feel emboldened to push prices," Mr Malin said. Apartment seekers are "just not willing to bite at certain prices at this moment because they feel it's a little bit out of reach for them. If they can't find what they want, they'll either wait a little longer or they'll move to a different borough." Manhattan's vacancy rate rose to 1.7 per cent last month, the highest for June in Citi Habitats data since 2002.