January 2010 Manhattan Rental Market Report
The Real Estate Group NY is proud to present the January 2010 edition of our Manhattan Rental Market Report™, the only research on the city’s rental rates published on a monthly basis.
The seasonal bounce back that we usually see in a “normal” January rental market, in addition to delayed renters having been postponed by their corporate employers, has combined this month to not only lower vacancies but keep prices stable as well. Non-doorman vacancies fell 17.66%, reinforcing that Manhattan renters are still in recession-mode, seeking out low prices and value, but still willing to execute leases.
While inventories are falling, prices have continued to hold this month; rents averaged less than a 1% decline overall. Category and neighborhood comparisons also remained stable, with no change being larger than 10%. Yet, prices remain seriously depressed in year-over-year comparisons.
By comparing January 2010 with January 2008 numbers, we can ultimately see just how far Manhattan has fallen. When compared to the NYC Rent Guidelines Board’s annual allowable increase on renewal leases, which is 3% for a one-year lease and 6% for a two-year lease, rents have fallen significantly. Rents in non-doorman properties have declined approximately 6.5% since 2008, while doorman units are down 10.5%. Clearly this illustrates that the rental market has a long way to climb to rebound. Yet while recovery may be a long way off, the absorption in supply and increase in demand seen this month leads us to believe that Manhattan’s rental market is at least on its way to a return to “normalcy.”
December 2009 Manhattan Rental Market Report
The Real Estate Group NY is proud to present the December 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
This month, asking rents continue to buck downward seasonal trends by remaining flat vs. last month. While the data continues to lag 2008 numbers, there is a clear disparity between units with and without service. Doorman units are down 5.79% compared to December 2008, while non-doorman units are only down 1.74% vs. last year. Non-doorman units, however, show much more modest changes, declining 1.19% vs. November while non-doorman units are actually up 0.87%.
And as we continue to see, whatever prices do, vacancies will follow. Renters have welcomed the discounts on doorman units and continue to keep inventory levels stable. Non-doorman vacancies, however, rose by 6.08% this month — reinforcing that renters are looking for deep discounts and perceived value.
As the New Year approaches, the good news is that Manhattan’s rental market appears to be stabilizing to some extent. Many of the aggressive incentives that were previously being offered this year have been scaled back and landlords seem to be increasingly comfortable with their situations.
Though the outlook for 2010 is still uncertain, the data does offer some hope for improvement.
November 2009 Manhattan Rental Market Report
TDG/The Real Estate Group NY is proud to present the November 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
This month the Manhattan rental market continues to lag in year-over-year performance, but rents have remained relatively stable versus last month. Overall, rents fell only 0.03% this November – a time when we would normally expect to see a seasonal decline. The largest price change this month was actually an increase in doorman one-bedroom units of 1.12%.
The one bright spot this month is the vacancy numbers. Although we reported last month that the delayed employment trend would not have a significant impact on the fall numbers, it may in fact finally be helping the rental market this month. These renters have come to Manhattan seeking value and have helped to decrease inventories by 5.36% overall this month – and a whopping 11.94% in non-doorman units.
As the trends above appear to be adding stability to the market, there still seems to be some disparity. Some owners are seeing increasing demand, either from new renters or by negotiating with current tenants to renew their leases, yet others carrying excess inventories are being forced to re-up incentives to appeal to those looking for value.
While November offers some positive news for the health of the market, the future is still uncertain. We will be carefully monitoring the results of this years holiday season spending in addition to the changing employment picture, which together may offer some foreshadowing as to how the 2010 market will unfold.
October 2009 Manhattan Rental Market Report
TDG/TREGNY is proud to present the October 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
Manhattan’s fate this fall was less transparent than in years previous. While the temperature drops and the leaves fall, we traditionally expect the summer’s flurry of activity to cool as well. This year, however, the already muted summer months led to speculation that this autumn may bring a delayed wave of new renters to the city and with them, sustained rental prices. While we continue to hold onto hope that this may be yet to come, the numbers this month indicate that this may not be the case.
Rents, which generally decrease in the fall, are relatively flat this month which is a good initial sign for the start of the season. It also seems as though renters that are in the market are taking advantage of the downturn to stake their claim on units in trendier neighborhoods. This extra demand has allowed areas like SoHo and TriBeCa to see upticks in rental prices.
Inventories, however, are back on the rise. Vacancies around Manhattan increased 1.72% this month — the first significant increase in vacancies in six months. It is this glut of inventory combined with a still unstable employment picture that leads us to expect continued downward pressure on the market this winter.
September 2009 Manhattan Rental Market Report
TDG/TREGNY is proud to present the September 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
This summer has been a story of unrealized dreams for landlords and property owners. While many assumed that the traditional flurry of activity would allow them to unload much of their excess inventory and raise prices, this has not been the case. In fact, we’ve observed that many of the landlords and property managers who were eager to test the market by increasing prices and removing incentives from their units saw quickly that these tactics were premature.
While activity has increased, the numbers have not shown significant improvement. Rents have stabilized, but at levels nearly 10% back from already depressed 2008 numbers. And although vacancies showed improvement this month, they have yet to establish the trend necessary to absorb the considerable amount of excess inventory that is continuing to depress the market.
As Manhattan heads towards the traditionally slower winter months, it seems unlikely that the market will rebound in 2009. Given the depth that the market has fallen to date, significant gains are necessary for a recovery. Such increases, which would have been a stretch even for the summer market, are even more unlikely to occur during Manhattan’s slower seasons.
August 2009 Manhattan Rental Market Report
TDG/TREGNY is proud to present the August 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
This month has been a bit of a power struggle between renters seeking value and property managers trying to capitalize on the last of the summer demand. Renters have been able to take advantage of relatively bargain prices, which continue to significantly lag in year–over–year trends, while this flurry of activity has led to decreasing inventories around Manhattan — good news for landlords and property managers.
As highlighted in last month’s report, the summer peak has been considerably muted this year. This anomaly has caused some in the market to be hopeful that the typical fall and winter doldrums will be less harsh than Manhattan has previously seen; however, most of the demand this summer seems to be coming from within the city limits (e.g. existing city dwellers looking for better deals), leading one to wonder where the renter demand to create such stability will come from.
As a side note, we’ve seen some landlords begin to test the market again this month with price increases. Although raising prices might garner a few more dollars on the balance sheets, it seems to us that this is still a gamble unless one truly feels their current inventories can withstand the market&rss current volatility.
We are continuing to monitor the market as the summer peak season comes to a close and will be paying careful attention to the direction of prices and inventories as the fall sets in.
July 2009 Manhattan Rental Market Report
On behalf of The Real Estate Group, I am pleased to present the July 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
While some analysts may be calling an end to the recession, word has not yet spread to Manhattan’s rental market. The market is now in full summer swing and while our agents are busy with clients, there is not the usual frenzy that would normally surround this time. The data confirms this. Manhattan, which is a highly seasonal market, appears to be missing its summer peak this year. Prices are flat or declining this month vs. last instead of climbing, rents continue to lag 2008, and vacancies are slightly up.
It appears that the already down market continues to suffer from a combination of fewer jobs and lower budgets. And in talking with our clients, many of the new hire employees who would normally begin in May and June have had their start dates pushed back to September and October, thus diminishing the seasonal demand summer normally brings. Since we look to this time of year as a barometer for the upcoming quarter, this begs the question, what outcome can we expect for the rental market this fall?
On one hand, the push of start dates may signify that seasonality will simply be muted this year as the demand spreads more evenly across the second and third quarters, rather than being concentrated in early summer. On the other, the lack of demand could be just that, which if carried through to the fall, would have a profoundly negative impact on the rental market heading into the colder months.
We will continue to monitor this trend much more closely and report back as the situation unfolds.
Sincerely,
Daniel Baum, C.O.O.
The Real Estate Group
June 2009 Manhattan Rental Market Report
On behalf of The Real Estate Group, I am pleased to present the June 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
As we mentioned last month, the summer busy season appears to be bringing demand back to the market. And June, in fact, marks the first month where both non-doorman and doorman vacancies have declined since September of 2008.
That said, rents have not rebounded as of yet. Year-over-year comparisons show that prices are still lagging 2008 by as much as 12.30% in doorman one-bedroom units. On a month-to-month basis, however, rents are beginning to stabilize in most categories. The only category to post a decline this month was non-doorman two-bedroom units, which fell 2.56%.
Yet, while there has been some leveling off of asking rents over the past few months, demand does not appear to be enough to uplift rents as we’ve become accustomed to seeing in the summer months. Additionally we’ve noticed landlords, that had been previously testing the market by removing tenant concessions, have added these incentives back into the mix this month.
I continue to caution landlords to carefully monitor their properties this summer and avoid being caught with excess inventory come fall. While Manhattan’s rental market may be showing some signs of improvement, these should not be interpreted as the road to recovery just yet.
Sincerely,
Daniel Baum, C.O.O.
The Real Estate Group
May 2009 Manhattan Rental Market Report
On behalf of The Real Estate Group, I am pleased to present the May 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
May marks the official start to the summer seasonality in Manhattan’s rental market. Keeping in line with this trend, we have witnessed that rental demand has been steadily increasing week-over-week since the beginning of April. Our firm has seen an increase of approximately 33% in rental deals this April compared to April of 2008 — when the market was at its apparent peak. So, it’s clear to us that consumer demand is back.
While we, as well as many others in the industry, are excited about this development, our experience has taught us that demand tends to ebb and flow with a greater deviation than the market itself. While we have seen some owners realize the increase in demand and begin to test the market, we are concerned that, as what happened last summer, owners that are too aggressive to raise prices or slash incentives will find themselves holding excess inventory going into the fall.
In fact, the news from our consumer base is not as optimistic as the demand numbers indicate. Many potential renters have told us that the issues with securing employment in Manhattan have not subsided and while many new grads are looking for housing in the city, a great deal of them are doing so without employment or with start dates that have been pushed back.
Also, taking a broader perspective on the data, it appears that Manhattan did not just lose two years of growth, but actually fell significantly below those numbers overall. Doorman units are down 6.92% and non-doorman units are down 3.62% since May of 2007. Some of the greatest decreases were in Midtown East doorman studio units (down 20.69%), Murray Hill non-doorman one-bedroom units (down 20.71%), East Village doorman one-bedroom units (down 18.44%), Midtown West non-doorman two-bedroom units (down 20.42%), Gramercy Park non-doorman two-bedroom units (down 20.25%) and Midtown East doorman two-bedroom units (down 21.33%). It is also important to note that these numbers do not take into consideration concessions or OPs, which would most likely make the net effective numbers even greater. [See Appendix A]
The bottom line this month is that while the market appears to be picking up, it doesn’t yet appear that the market has recovered.
Daniel Baum, C.O.O.
The Real Estate Group
April 2009 Manhattan Rental Market Report
On behalf of The Real Estate Group, I am pleased to present the April 2009 edition of our Manhattan Rental Market Report, the only research on the city’s rental rates published on a monthly basis.
I am pleased to report to you that for the first time in some months, prices are beginning to hold in the rental market. Both rents and vacancies across the city have remained virtually flat this month – a good sign for the health of the market. The greatest price change was only -1.41% in non-doorman studio units – which is a good indicator to us that a majority of the market is starting to find equilibrium, at least in a month-to-month comparison. And as we pointed out last month, it appears that doorman landlords and property owners have been more assertive in fighting vacancies through a combination of incentives to tenants and concessions to brokers. Doorman vacancies were actually down 3.15% this month, while non-doorman units continued to increase 4.33%.
Looking more broadly, compared to April of last year, citywide rents remain down significantly across the board. We are cautiously optimistic though as April marks the start of the city’s peak rental season. As many are aware, this seasonality brings with it the new hires and intern class which has traditionally helped to both absorb supply and allow owners to increase their asking rents. Our relocation contacts and HR managers, however, have told us that these new hire classes will be down anywhere from 20 to 30% from years past. So it’s our expectation that while we will see an increase in rental demand during the summer months, these increases will not have the same pronounced effect that they previously have.
Daniel Baum, C.O.O.
The Real Estate Group
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