Photo: Ahmed ElHusseiny/Flickr
Even as listing inventory and new leases increased in March from last year, new leases that included landlord incentives doubled. March’s percentage is now the second highest on record, according to the newly releases market report from New York brokerage Douglas Elliman.
Incentives are an effective tool used by landlords to draw renters and avoid having empty units on their hands. A period of free rent or a period of reduced rent are the most common incentives. The number of new leases with incentives rose to 28.4 percent in March, more than twice the 13.6 percent recorded last year and slightly up from the 26.4 percent recorded in February.
In January 2017, new leases that included incentives soared to a record high of nearly 41 percent. Landlords’ use of incentives continued in February, though not at record numbers — February’s percentage had previously been the second highest on record.
The median rental price with incentives rose to $3,294 in March — the first increase in eight months, says Elliman’s data.
A total of 4,764 new leases were signed in March. This was up just over 24 percent from last year, and 31.1 percent higher than the previous month.
More units were available in March than in the previous year. Listing inventory increased 16.6 percent year-over-year to 7,212 in March, and was up nearly 5 percent from the previous month.
The average Manhattan rental price was up 5.6 percent to $4,211 in March from last year, while the median price rose 3 percent to $3,400 year-over-year in March.
The median price for a Manhattan new development apartment increased nearly 6 percent from last year to $4,602 in March.
Non-doorman apartments saw more of a price increase in March compared to non-doorman properties. The median rental price for units in non-doorman properties was up just over 5 percent from last year to $2,895, while it decreased 1.3 percent year-over-year to $3,700 for units in buildings with a doorman in March.
Prices were reduced an average of 2.7 percent from listing to signing in March, up from 2.2 percent the previous year.
Apartments were on the market for an average of 55 days, up from the 48 recorded last year.
Manhattan’s vacancy rate dropped to 2.26 percent in March from 2.42 percent last year.
“For the last year, rents edged up a little bit then slipped a little bit,” Jonathan Miller, CEO of appraisal firm Miller Samuel, told The Real Deal. Miller is also the author of the Elliman report.
The small rise in rent seen in March should not be looked at as a “trend,” Miller added. “A month ago the median rent fell 5 percent.”
Click here to read the entire report.