Not-so-good morning, Manhattan renters! The second quarter rental market report from Prudential Douglas Elliman is out today, and the outlook for renters hoping the market might cool off again is grim. The median rental price is now $3,125/month, up 7.9 percent from last year's $2,896/month. The year-over-year increase was the highest in five years, and that median rent is the highest number we've seen in two years. Also worrying: that year-over-year increase has gotten steadily steeper over the past four quarters. Nor does it look like things will cool down any time soon, according to graph guru/report preparer Jonathan Miller. "Credit is so tight that potential buyers simply have to rent," JMillz explains. And credit is likely to stay tight for a while, as increasingly global banks worry about the financial situation in Europe. Concessions are disappearing, too?only 3.7 percent of new rental transactions came with concessions in the second quarter, and the usual concession was only one month's free rent. 2008 and 2009, come baaaaack!
Studio rents increased the most, JMillz tells us, followed, in order, by 1BRs, 2BRs, and 3BRs. Improving employment numbers are to blame (or to thank, if you're a landlord). "The key entry point into the housing market are small rental apartments," according to Miller. "College grads or people moving here to make it big (in a little apartment)." Which is good news for the popularity of micro apartments.
The Citi Habitats report for the second quarter, also out today, finds an unusual increase in the vacancy rate between May and June, from 0.89 percent to 1.01 percent. (The rate in June of last year was just 0.69 percent.) Citi Habitats attributes this to the fact that prices may have become too high for some renters, who are waiting to look for new places until the summer ends, or who might be foregoing Manhattan altogether. Brokerage MNS, with a monthly report out today, urges bargain-minded renters to seek out Upper East Side studios, which dropped $40 in June, on average. Here's Citi Habitats' neighborhood pricing breakdown: