NY AREA MARKET REPORT

in Market News

Introduction
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.
http://www.tregny.com/manhattan_rental_market_report

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.”

A Quick Look
January Average Rental Prices in Manhattan Non-Doorman Doorman
Most Expensive Least Expensive Most Expensive Least Expensive
Studios TriBeCa, $3755 Harlem, $1312 TriBeCa, $2974 Harlem, $1350
One-bedrooms TriBeCa, $4775 Harlem, $1594 SoHo, $4186 Harlem, $1731
Two-bedrooms TriBeCa, $7200 Harlem, $2023 SoHo, $6767 Harlem, $2634

Greatest Changes Since December Non-Doorman Doorman
Studios Lower East Side -8.34% ($152) Lower East Side -6.81% ($152)
One-bedrooms SoHo -5.02% ($193) Financial District 7.17% ($210)
Two-bedrooms Midtown West -5.60% ($140) Greenwich Village -7.29% ($413)

Year-over-year Changes Non-Doorman Doorman
January ’09 January ’10 Change January ’09 January ’10 Change
Studios $1931 $1919 -0.63 $2383 $2253 -5.46%
One-bedrooms $2612 $2613 -0.05% $3453 $3233 -6.38%
Two-bedrooms $3659 $3639 -0.54% $5187 $4971 -4.16%

Notable TrendsHolding Pattern — Manhattan’s rental market continues to show signs of a bottom. Rents remain relatively flat in month-to-month comparisons, averaging less than a 1% decline this report period. Even in neighborhood/apartment type comparisons, no change was greater than 10%. While it is uncertain how long this holding pattern will continue, a significant decrease in vacancies this month leads us to be optimistic for the market’s next move.

New Year Employment — It seems that a wave of January renters, possibly those new employees whose start dates were pushed back, have helped to eliminate some of the vacancies in bargain priced units. Non-doorman inventories decreased this month by 17.66% and overall vacancies were down 8.38%.

Landlords Test the Market — As their vacancies begin to drop, landlords around Manhattan are beginning to test rent increases again this month. Some of the major players, and even a few small outfits, have begun to remove concessions and bump up prices — averaging around $100-200/unit. Whether or not Manhattan’s rental market can handle these increases is still yet to be seen.

Where Prices DecreasedHarlem— Doorman one-bedrooms (-3.96%), doorman two-bedrooms (-6.20%)

Upper West Side— Doorman studios (-2.35%), doorman one-bedrooms (-3.06%), non-doorman two-bedrooms (-4.79%), doorman two-bedrooms (-3.06%)

Upper East Side— Doorman studios (-1.60%), non-doorman one-bedrooms (-0.20%), doorman two-bedrooms (-1.90%)

Midtown West— Non-doorman studios (-1.08%), doorman one-bedrooms (-1.01%), non-doorman two-bedrooms (-5.60%), doorman two-bedrooms (-1.76%)

Murray Hill— Non-doorman two-bedrooms (-4.15%), doorman two-bedrooms (-1.87%)

Chelsea— Non-doorman one-bedrooms (-3.07%), doorman one-bedrooms (-0.03%), doorman two-bedrooms (-0.45%)

Gramercy Park— Doorman studios (-1.37%), non-doorman two-doorman (-4.73%), doorman two-bedrooms (-2.26%)

Greenwich Village— Non-doorman studios (-1.01%), doorman studios (-2.32%), non-doorman one-bedrooms (-0.69%), doorman one-bedrooms (-5.16%), non-doorman two-bedrooms (-1.95%), doorman two-bedrooms (-7.29%)

East Village— Non-doorman studios (-2.13%), doorman one-bedrooms (-2.90%), doorman two-bedrooms (-5.37%)

SoHo— Non-doorman studios (-0.88%), doorman studios (-1.49%), non-doorman one-bedrooms (-5.02%), doorman one-bedrooms (-4.73%), non-doorman two-bedrooms (-4.68%), doorman two-bedrooms (-6.12%)

Lower East Side— Non-doorman studios (-8.34%), doorman studios (-6.81%), non-doorman one-bedrooms (-4.16%), doorman one-bedrooms (-3.96%), doorman two-bedrooms (-5.04%)

TriBeCa— Non-doorman one-bedrooms (-1.91%), doorman one-bedrooms (-4.42%), non-doorman two-bedrooms (-4.86%), doorman two-bedrooms (-6.40%)

Financial District— Non-doorman studios (-6.12%), non-doorman one-bedrooms (-5.02%)

Battery Park City— Doorman studios (5.07%)

Where Prices IncreasedHarlem— Non-doorman studios (0.75%), doorman studios (3.58%), non-doorman one-bedrooms (2.26%), non-doorman two-bedrooms (3.17%)

Upper West Side— Non-doorman studios (0.17%), non-doorman one-bedrooms (0.75%)

Upper East Side— Non-doorman studios (0.65%), doorman one-bedrooms (0.94%), non-doorman two-bedrooms (1.81%)

Midtown West— Doorman studios (1.72%), non-doorman one-bedrooms (1.46%)

Midtown East— Non-doorman studios (5.95%), doorman studios (4.83%), non-doorman one-bedrooms (2.77%), doorman one-bedrooms (3.35%), non-doorman two-bedrooms (3.77%), doorman two-bedrooms (5.32%)

Murray Hill— Non-doorman studios (0.40%), doorman studios (0.08%), non-doorman one-bedrooms (1.68%), doorman one-bedrooms (1.59%)

Chelsea— Non-doorman studios (3.20%), doorman studios (1.50%), non-doorman two-bedrooms (3.57%)

Gramercy Park— Non-doorman studios (1.08%), non-doorman one-bedrooms (4.45%), doorman one-bedrooms (2.10%)

East Village— Doorman studios (4.62%), non-doorman one-bedrooms (1.59%), non-doorman one-bedrooms (3.42%)

Lower East Side— Non-doorman two-bedrooms (2.96%)

TriBeCa— Non-doorman studios (4.09%), doorman studios (3.75%)

Financial District— Doorman studios (5.62%), doorman one-bedrooms (7.17%), non-doorman two-bedrooms (5.35%), doorman two-bedrooms (6.06%)

Battery Park City— Doorman one-bedrooms (3.39%), doorman two-bedrooms (3.77%)

Tips for RentersGrab an East Village studio. Non-doorman studio units in the East Village have been steadily declining in price since September of 2009. This month, they’ve reached their lowest price yet, just $1,612. With the bevy of nightlife, dining and other entertainment options in the area, these units provide an excellent value.
Convenience on the cheap in Midtown. For those renters looking to save some cash, but without sacrificing convenience, Midtown West two-bedrooms are the best bet. Grab a roommate and for less than $1,200/month each, tenants have easy access to transportation, Times Square and everything Manhattan has to offer.
Run, don’t walk. We’ve been saying it for months, but time seems to be ticking away for deals. As landlords begin to increase prices and inventories continue to decline, renters left on the fence will be out of luck. So for those in the market, there’s no time like the present.

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