Q1 and March 2016 Manhattan Rental Market Report

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Q1 2016 Facts:

• When compared to the last quarter of 2015, market conditions have remained generally stable.  Average rents for all apartment sizes were relatively unchanged, while the borough’s vacancy rate declined, reflecting an uptick in demand for rental housing.
• The lower quarterly vacancy rate is largely the result of an increase in landlord concessions.  Throughout the first quarter, 21% of transactions brokered by Citi Habitats included some form of move-in incentive, compared to 12% during both the previous quarter and a year ago (in Q1 2015).   
• In fact, a larger percentage of leases included an incentive during the first quarter of 2016 than in any quarter in more than 5 years.  The last time they were as prevalent was during the third quarter of 2010, when they were included in 22% of new leases. 
• When comparing the first quarter of 2016 with the quarter that preceded it, rents changed minimally.  Pricing for studios rose 0.2%, while the average rent for a one-bedroom apartment increased 0.7%.  In contrast, rents for two- and three-bedroom homes fell 0.3% and 0.4% respectively
• When examining vacancy rates across Manhattan, we found 1.77% of apartments to be available during the first quarter of 2016, down from 1.96% in the fourth quarter of 2015. 

March 2016 Facts:

• Rental pricing in March 2016 remained largely unchanged from February
• Meanwhile the Manhattan vacancy rate increased slightly to 1.79% from February’s rate of 1.74%. 
• In addition, we found that 20% of leases signed with our company included an incentive during March. 
• While down from 25% a month earlier, this percentage is still considerably higher when making a year-over-year comparison.  As was the case in Q1 and Q4 2015, 12% of Citi Habitats’ rental transactions included a concession in March 2015.

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