After drifting mostly lower over many months, Manhattan rents rebounded in April, an early sign that the peak spring and summer rental season may be stressful for many tenants looking for new spaces.
Market reports being released on Thursday showed a low vacancy rate and a tight inventory. The average rent in Manhattan rose by $139 to $3,367 a month in April, compared with March, a one-month increase of 4.3%, according to a report by Citi Habitats, a brokerage firm that represents many renters.
“It is going to be more difficult to find a desirable apartment,” said Mark Menendez, the director of rentals at Douglas Elliman. “There is a lack of inventory and a huge demand.”
The tight market, he said, is in turn leading many renters to renew leases with their current landlords, or request extensions so they can look for new apartments later in the year. This will lead to further tightening of the market.
Rents normally drift lower during the fall and winter, and rise modestly in the spring and summer with the end of the school year, when many new college graduates move to the city, and when families with children prefer to relocate.
But as the economy recovered from the financial crisis over the last few years, rents rose significantly. They hit a record in August of $3,461 a month, according to Citi Habitats, and since then fell to a low of $3,211 in January, a drop of 7.2%, raising questions about whether rents would remain low in the spring.
Gary Malin, the president of Citi Habitats, said that last year landlords had raised rents faster than incomes were rising, and there was a pushback from tenants.
Now after that pause, “we are starting to see that rents are starting to go up,” he said. “There is no weakness in the market at all,” with rentals showing a “very strong” performance throughout Manhattan, according to Mr. Malin.
Mr. Malin attributed this to a strengthening economy, including an increase in corporate relocations from other parts of the country so far this year, compared with the same period last year.
Shawna Aschmies, a Citi Habitats broker, said with inventory so tight, she was advising some past clients to try to extend their leases for a few months to see whether more apartments come on the market later in the year, others were giving up on Manhattan, and finding more space for less money in Brooklyn or Queens.
A few weeks ago, she found a $3,100 a month two-bedroom apartment in the East Village for Marie Clare Brush, a fashion designer, and her roommate, a software engineer.
But the apartment was small, and had only one bathroom, so they kept looking.
Now Ms. Brush said that with help from Ms. Aschmies she found a bigger apartment—with a new kitchen with stainless-steel appliances, two bathrooms and several skylights—for $2,800 a month in Greenpoint, Brooklyn. It was farther from the subway than she would have preferred.
“It is slim pickings,” Ms. Brush said. “You have to decide what you can compromise on and what you can’t compromise on. You have to keep your options open and look at neighborhoods that aren’t generally known. ”
Jonathan Miller, president of appraiser, Miller Samuel Inc., said that this year landlords have been less aggressive in raising rents for their existing tenants, resulting in more tenants renewing leases, leaving fewer apartments available on the market.
The tight market was also driven by rising employment, slowly improving economic growth, Mr. Miller said.
He said that the renters who want to buy rather than rent, will find little relief in the sales market: Sales inventory is at a 12-year low, and credit conditions remain very tight.
