Thoughts on Manhattan property, one of the world's best investments.
Wednesday, August 10, 2011
New York apartment rent increase 8%
Manhattan New York July 2011 average monthly apartment rent increased 8% to $3,358 compared to a year ago. This is just $36 shy of the record of May 2007. The vacancy rate was at 0.86%, the lowest in the nation.
-Crains New York Article Near record temperatures outside in July were nearly matched by those indoors, as the Manhattan apartment market saw average rents approach historic peaks, according to a report released Wednesday.
Last month, the average monthly rent for an apartment rose 8% to $3,358 from the same month last year, just $36 shy of the all-time highest monthly rent, recorded in May 2007, according to Citi Habitats, the city's largest residential rental brokerage. Rents for apartments of all sizes rose. Studio rents were up 7% to $1,953, one-bedrooms increased 7% to $2,672, two-bedrooms rose 9% to $3,754 and three-bedrooms increased 9% to $5,052.
“With concessions going away and vacancy rates diminishing, rents were bound to escalate,” said Gary Malin, president of Citi Habitats, adding that the speed with which rents have been increasing may be surprising to some since unemployment remains high.
The vacancy rate was 0.86% in July, essentially unchanged from the same time a year ago, when the rate was 0.88%. The big change was that only 7% of all the transactions brokered by Citi Habitats this July involved a free month's rent or payment of broker fees as a concession, compared with 25% a year earlier.
Meanwhile, average monthly rents at newly built doorman buildings in Manhattan took a slight dip in July. Last month, the average rent at those properties was $5,370, down 4% from last year. Mr. Malin said the slight decline may be attributed to the fact that owners of high-end new developments tend to “push the limits very fast” and then eventually come back to reality and lower rents.
He cautioned that the report reflects activity in July and therefore does not take into account recent wild fluctuations in the stock market as well as mounting fears of a double-dip recession. On Monday, the Dow Jones Industrial Average recorded its worst day since 2008, plunging 634 points after the U.S. credit rating was downgraded. The Dow rebounded 430 points on Tuesday.
“We'll have to see how the new round of question marks in our economy will impact the rental market,” said Mr. Malin.