Photo: Robert Claypool/Flickr
For the fourth month in a row, the percentage of new leases signed for Manhattan apartments that had landlord incentives or concessions set a new record in January, according to a new market report by New York brokerage Douglas Elliman.
Last month, the share of new leases with landlord incentives rose to almost 31 percent — nearly double the 16.4 percent recorded the same time last year. In fact, last month was the first time the percentage of leases with landlord incentives was above 30 percent, says Elliman.
Incentives can be a grace period on paying rent or a price reduction, and they are often used by landlords to attract renters in highly competitive markets to offset rising rents.
In January, landlords offered, on average, 1.3 months of free rent or the equivalent, which was below the 1.9 months landlords gave last year.
Landlords are using more incentives to attract renters in the two-bedroom market, which accounted for nearly 35 percent of all leases with incentives.
Renters got some relief from rising prices last month as the average rental price in Manhattan decreased 3.4 percent year-over-year to $3,933 in January. This was also down 2.7 percent from December.
Meanwhile, the median rental price was up 0.6 percent in January to $3,369 from last year. However, it was 0.6 percent lower than the previous month.
Overall rental price growth in Manhattan proved to be a mixed bag in January, with rents rising in studios and 1-bedrooms, but declining in 2-bedrooms and above. Rents in apartments with doormen continued to fall, while non-doorman buildings continued to record price increases.
Rent growth, according to Elliman, is occurring in the lower half of the market — entry-level apartments and mid-priced apartments — but is falling in the top-priced or “luxury” market. The average rent for luxury Manhattan apartment decreased 13.6 percent year-over-year to $9,226 in January, compared to the nearly 2 percent year-over-year increase to $2,295 recorded in the entry-level market.
The number of new leases signed in January was down nearly 5 percent from last year, but listing inventory was up nearly a whopping 14 percent from last year.
Click here to read the entire report.