Apartment Demand Rises, Owners End Concessions
In the past few months, Manhattan rents have continued to rise and vacancy rates have hit a new low, according to reports released on July 8 by Citi Habitats. Manhattan's apartment vacancy rate was 0.72 percent in the second quarter, the lowest vacancy rate that Citi Habitats has seen since it started tracking vacancies in 2002. The last time the rate was nearly this low was in second quarter of 2006, when it was 0.76 percent.
Average rents have seen large increases over the past year, regardless of apartment size. Rental prices for studios and one-, two-, and three-bedroom apartments increased 9.1, 9.2, 10.8, and 11.3 percent, respectively, according to the report. Similar trends could be found in a report by Prudential Douglas Elliman and Miller Samuel.
With a much higher demand than seen in previous years, owners are no longer scrambling to find new tenants. As a result, they're eliminating concessions. Eleven percent of Citi Habitat's rental transactions in June 2011 included a concession, such as a month's free rent or payment of brokerage fees; the figure was 28 percent in June 2010.