May 2015 Manhattan Rental Market Report

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• The average Manhattan apartment rented for $3,475 during May 2015, $16 more than it did in April 2014, when the average was $3,459.  Looking year-over-year, average rents are also up.  The average apartment rented for $3,451 during May 2014, $24 less than it did last month.  May’s average rent is the highest we have noted since we started tracking this statistic in January 2002.

• When compared to April 2015, average rents increased the most for studio apartments, where rose a relatively substantial 5%.  Rents for one-bedroom homes were up 2% on average, while average rents for two- and three-bedroom homes increased by 1% for both categories.

• Looking year-over-year, average rents were up overall.  For studios, rents were again up 5%, while they increased 7% since May 2014 for one-bedroom homes.  Both gains are greater-than-average increases.  In comparison, year-over-year rents for two- and three-bedroom apartments remained stable, with minimal pricing changes.

• In May 2015, the borough-wide vacancy fell to 1.07% from April’s rate of 1.37%, and is the lowest Manhattan vacancy rate we have seen since June 2012, when the rate was 1.01%. 

• Year-over-year, Manhattan’s vacancy rate also fell.  In May 2014 the borough’s vacancy rate was 1.17% (again, compared to 1.07% in May 2015). 
• When examining incentives, 12% of rental transactions brokered by Citi Habitats offered a free month’s rent and/or payment of the broker fee to entice new tenants in May, up 11% in April.  Last month’s percentage is substantially higher than a year ago (May 2014) – when only 7% of new leases included an owner-paid concession.

“Just when you think they have reached the ceiling, rents continue to climb.  Unfortunately for many tenants, the largest gains in May were for studios and one-bedrooms,” commented Gary Malin, President of Citi Habitats. “In addition, we haven’t seen inventory levels this low in almost three years.  This means desirable apartments will likely not last long – and apartment seekers should begin their search with funds and paperwork at the ready.  Typically by this time of year, most landlord incentives would be off the field.  But the silver lining to the high rental pricing is that they are still in play in some buildings.

Additional relevant findings of the Citi Habitats May 2015 monthly rental report are outlined below:

• In May 2015, the average monthly rental price for a Manhattan studio was $2,228. For one-bedroom homes, the average was $3,037.  For two-bedrooms, the average rent was $4,015.  Finally, the average three-bedroom apartment rented for $5,185.
• The most expensive neighborhood for renters in May 2015 was SoHo/TriBeCa, with a median rent of $4,298.  Gramercy/Flatiron was the second priciest area, with a median rent of $3,995.
• The least expensive area for renters in Manhattan during May 2015 was Washington Heights, with a median rent of $1,998.  When examining neighborhoods below 96^th Street, the Upper East Side’s median rent of $2,450 was the lowest of all areas in this section of the borough.
• With a vacancy rate of 0.67%, Murray Hill (popular with new grads) was the area with least inventory in May 2015, followed by the Upper East Side at 0.77%.  On the other end of the spectrum, the vacancy rate was highest in the Upper West Side.  Last month, 1.49% of rental units in the neighborhood were vacant.  The West Village was the area with second-highest percentage of available homes, with a vacancy rate of 1.34%

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