Manhattan Rental Market Report

Updated: August 2008

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Table of Contents:

• Letter From Our Chief Operating Officer
• A Quick Look
• Mean Manhattan Rental Prices
• Manhattan Price Trends
• Neighborhood Price Trends
  • Upper West Side
  • Upper East Side
  • Midtown West
  • Midtown East
  • Murray Hill
  • Chelsea
  • Gramercy Park
  • Greenwich Village
  • East Village
  • SoHo
  • Lower East Side
  • TriBeCa
  • Financial District
  • Battery Park City
  • Harlem
• The Report Explained

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Letter From Our Chief Operating Officer

On behalf of The Real Estate Group, I am pleased to present the August 2008 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.

I often used to hear about this common consensus that, when the sales market deteriorated, the rental market would grow stronger and vice versa. And while this symbiosis may have existed in the past, the current rise in unemployment rates and curtailment in the creation of new jobs seems to be negating this widely accepted principle. In short, the Manhattan real estate market, as a whole, is down.

Landlords may have been hoping to stop offering incentives by the end of July, however, the concessions continue and, in addition, it seems that they took our suggestion from last month to heart and lowered their prices. Thankfully, inventories are also down across Manhattan this month, which indicates that there is still a demand for housing if apartments are priced well. As demonstrated last month, concessions alone don’t appear to be enough to entice renters; in this deflated market, many Manhattan dwellers are now looking to the outer boroughs, where they might pay the same amount they were formerly paying, but would receive more in return. That being the case, I strongly urge all Manhattan landlords to be conservative with their asking rents, keeping in mind that the summer will soon draw to a close and vacancies may only increase further. If and when this happens, they should be prepared to lower prices accordingly, as this seems to be the key to keeping inventories at a similarly low level.

Sincerely,

Daniel Baum, C.O.O.
The Real Estate Group

A Quick Look

Non-Doorman Buildings (Average Prices)
	Most Expensive	Least Expensive
Studios	TriBeCa $2,844	Harlem $1,307
One-Bedrooms	TriBeCa $4,086	Harlem $1,674
Two-Bedrooms	TriBeCa $6,713	Harlem $2,238

Doorman Buildings (Average Prices)
	Most Expensive	Least Expensive
Studios	SoHo $2,830	Harlem $1,294
One-Bedrooms	SoHo $5,060	Harlem $1,770
Two-Bedrooms	SoHo $7,055	Harlem $2,632

Greatest Changes Since July:

• Non-doorman studios – Upper West Side – Down 8.4% ($165)
• Non-doorman one-bedrooms – Chelsea – Up 6.2% ($170)
• Non-doorman two-bedrooms – SoHo – Down 5% ($213)

• Doorman studios – East Village – Down 9.9% ($275)
• Doorman one-bedrooms – Lower East Side – Down 5.6% ($208)
• Doorman two-bedrooms – Gramercy Park – Down 4.9% ($306)

Year-over-year Changes*:

Manhattan Non-Doorman Rents: August ’07 vs. August ’08
	August ’07	August ’08	Change
Studios	$2,167	$2,161	-0.3%
One-Bedrooms	$2,953	$2,854	-3.4%
Two-Bedrooms	$4,177	$3,968	-5%

Manhattan Doorman Rents: August ’07 vs. August ’08
	August ’07	August ’08	Change
Studios	$2,724	$2,594	-4.8%
One-Bedrooms	$3,804	$3,772	-0.8%
Two-Bedrooms	$5,705	$5,750	+0.8%

*Year-over-year comparison does not include Harlem data

Notable Trends:

The rental market continues to soften in its summer slump—Compared to last month, average Manhattan rents decreased across the board, with the exception of non-doorman one-bedrooms, which increased by a negligible 0.2%. Additionally, in a year-over-year comparison, August ’08 prices were all lower except for doorman two-bedrooms, which increased by 0.8%. The greatest changes from this time last year were in non-doorman two-bedrooms and doorman studios, which dropped in price by 5% and 4.8%, respectively; doorman studio rents were down 2.1% from last month as well.

Higher prices mean higher inventories; lower prices mean lower inventories—It appears that many landlords heeded our advice from last month and lowered their prices, thereby lowering inventories. One example of this was in Gramercy Park, where non-doorman two-bedroom inventories were down and rents continued to decline to their lowest point since The Real Estate Group began reporting data in January ’07 (at $3,755). In Chelsea and the Upper East Side, however, doorman two-bedroom prices continued to rise, reaching their highest points to date (at $6,677 and $5,578, respectively), and those inventories either remained the same or increased. It appears that rents and vacancies are mutually inclusive; whatever prices do, inventories will follow.

Non-doorman two-bedrooms are actually less expensive in the Village than on the LES—It’s a testament to how popular the Lower East Side has become that non-doorman two-bedrooms, which have been increasing in price since June, now cost $3,725 on average and are more costly than their equivalents in Greenwich Village and the East Village. In Greenwich Village, these units saw rents rise 1.6% this month to $3,672, while prices for those in the East Village dropped 0.9% to $3,083. Regardless of the new developments on the Lower East Side, prices are moving on up.

Where Prices Decreased:

Harlem— Non-doorman studios (1.8%), doorman studios (3.2%), non-doorman one-bedrooms (5.3%), doorman one-bedrooms (3%), non-doorman two-bedrooms (2.7%), doorman two-bedrooms (0.2%)

Upper West Side— Non-doorman studios (8.4%), doorman studios (2.1%), doorman one-bedrooms (0.8%)

Upper East Side— Non-doorman studios (1.1%)

Midtown West— Doorman studios (4.3%), non-doorman one-bedrooms (2.9%), doorman one-bedrooms (0.8%)

Midtown East— Doorman studios (2.8%), doorman one-bedrooms (1.4%), non-doorman two-bedrooms (2.4%), doorman two-bedrooms (1.7%)

Murray Hill— Doorman one-bedrooms (0.3%), non-doorman two-bedrooms (3%)

Chelsea— Non-doorman studios (4%), doorman studios (0.2%), non-doorman two-bedrooms (3.3%)

Gramercy Park— Non-doorman studios (0.6%), non-doorman one-bedrooms (1.9%), doorman one-bedrooms (4.3%), non-doorman two-bedrooms (0.7%), doorman two-bedrooms (4.9%)

Greenwich Village— Non-doorman studios (2.4%), non-doorman one-bedrooms (1.5%), doorman two-bedrooms (1.3%)

East Village— Doorman studios (9.9%), doorman one-bedrooms (4.9%), non-doorman two-bedrooms (0.9%), doorman two-bedrooms (2.6%)

SoHo— Non-doorman studios (1.9%), doorman studios (0.5%), doorman one-bedrooms (1.2%), non-doorman two-bedrooms (5%), doorman two-bedrooms (1%)

Lower East Side— Doorman studios (5.7%), non-doorman one-bedrooms (5.1%), doorman one-bedrooms (5.6%), doorman two-bedrooms (4.3%)

TriBeCa— Non-doorman studios (2.6%), doorman studios (2.6%), non-doorman two-bedrooms (4.4%)

Financial District— Doorman studios (2.1%), doorman one-bedrooms (2.6%), doorman two-bedrooms (2.7%)

Battery Park City— Doorman studios (3.1%), doorman one-bedrooms (1.9%)

Where Prices Increased:

Upper West Side— Non-doorman one-bedrooms (1.9%), non-doorman two-bedrooms (0.6%), doorman two-bedrooms (1.3%)

Upper East Side— Doorman studios (0.3%), non-doorman one-bedrooms (1.6%), doorman one-bedrooms (0.3%), non-doorman two-bedrooms (0.1%), doorman two-bedrooms (0.2%)

Midtown West— Non-doorman studios (1.1%), non-doorman two-bedrooms (3.9%), doorman two-bedrooms (1.3%)

Midtown East— Non-doorman studios (1%), non-doorman one-bedrooms (2.8%)

Murray Hill— Non-doorman studios (1.1%), doorman studios (1.9%), non-doorman one-bedrooms (0.9%), doorman two-bedrooms (4.7%)

Chelsea— Non-doorman one-bedrooms (6.2%), doorman one-bedrooms (1.9%), doorman two-bedrooms (3%)

Gramercy Park— Doorman studios (1.2%)

Greenwich Village— Doorman studios (1.7%), doorman one-bedrooms (1.2%), non-doorman two-bedrooms (1.6%)

East Village— Non-doorman studios (6.5%), non-doorman one-bedrooms (0.2%)

SoHo— Non-doorman one-bedrooms (0.7%)

Lower East Side— Non-doorman studios (3.8%), non-doorman two-bedrooms (1%)

TriBeCa— Non-doorman one-bedrooms (1.2%), doorman one-bedrooms (0.9%), doorman two-bedrooms (2.1%)

Financial District— Non-doorman studios (1.3%), non-doorman one-bedrooms (1.1%), non-doorman two-bedrooms (1%)

Battery Park City— Doorman two-bedrooms (1.6%)

Tips for Renters:

• For service and solitude, opt for a Battery Park one-bedroom. Doorman one-bedrooms in Battery Park are at their second lowest point to date since The Real Estate Group began reporting data. These units have been steadily decreasing in price since May and are second only to Harlem in terms of affordability; this month rents dropped 1.9% to $3,293.
• Doormen, amenities and more—for less!—in the Financial District. Prices for doorman units are down across the board this month in the Financial District, by 2.1% for studios, 2.6% for one-bedrooms and 2.7% for two-bedrooms. This neighborhood is known for its ample supply of amenity-rich new developments, and many landlords of these buildings are continuing to offer concessions such as free months’ rent or owner-paid fees.
• Lower East Side doorman one-bedroom prices keep on falling. In a continuation from last month and June, rents for doorman one-bedrooms on the LES fell 5.6% in August to $3,524—their lowest point since January. This is a welcome change from the formerly soaring prices that, back in May, broke the $4,000 mark before coming back down to more reasonable heights.

Mean Manhattan Rental Prices

The Mean Rental Price graphs illustrate average monthly rents for studios, one-bedrooms and two-bedrooms in doorman and non-doorman buildings in Manhattan for the month of August 2008. Graphs tracking citywide and neighborhood price changes over a rolling 13-month period follow.

Manhattan Price Trends

*2008 data includes Harlem

Neighborhood Price Trends

Upper West Side

Upper East Side

Midtown West

Midtown East

Murray Hill

Chelsea

Gramercy Park

Greenwich Village

East Village

SoHo

Lower East Side

TriBeCa

Financial District

Battery Park City

Harlem

As Harlem’s data is new to this report, these graphs only show Harlem rents in 2008 so far.

The Report Explained

The Manhattan Rental Market Report is the only report that compares fluctuation in the city’s rental data on a monthly basis. It is an essential tool for potential renters seeking transparency in the NYC apartment market and a benchmark for landlords to efficiently and fairly adjust individual property rents in Manhattan.

The Manhattan Rental Market Report is based on data cross-sectioned from over 10,000 currently available listings located below 155th Street and priced under $10,000, with ultra-luxury property omitted to obtain a true monthly rental average. Our data is aggregated from the TREGNY proprietary database and sampled from a specific mid-month point to record current rental rates offered by landlords during that particular month. It is then combined with information from the REBNY Real Estate Listings Source (RLS), OnLine Residential (OLR.com) and R.O.L.E.X. (Real Plus).

Contact us now: 212.475.9000

Note: All market data is collected and compiled by The Real Estate Group’s marketing department and is overseen by C.O.O. Daniel Baum. The information presented here are intended for instructive purposes only and has been gathered from sources deemed reliable, though it may be subject to errors, omissions, changes or withdrawal without notice.

If you would like to republish this report on the web, please be sure to source it as the “Manhattan Rental Market Report” with a link back to its original location.