Manhattan rents have hit dizzying new heights.
Get ready to get squeezed badly: The average rent for a Manhattan apartment reached a record-breaking $3,418 in the first quarter of the year, according to brokerage firm Citi Habitats.
Tht’s up 5% from the same period last year. Another report, from rival Prudential Douglas Elliman, put the average Manhattan rent in the quarter at $3,663, up 6% from last year.
“People at the entry level are being hurt the most,” Citi Habitats President Gary Malin told the Daily News.
A combination of factors are propelling rents.
Uncertainty about the economy and tighter credit requirements for mortgages has some would-be buyers continuing to rent out of necessity.
At the same time, rental supply is limited.
“There is just not enough inventory,” said Yuval Greenblatt, executive vice president at Prudential Douglas Elliman. “Renters are finding competition for the apartments they want.” On the high end, a new breed of rental buildings with plush amenities has provided a viable alternative to residents who otherwise might have bought.
“They don’t feel like they are sacrificing,” Malin said.
Manhattan’s vacancy rate remains very tight at 1.22%, up slightly from 1.08% last year, Citi Habitats said.
Landlord concessions — typically one month’s free rent and payment of the broker’s fee — were included in just 12% of Citi Habitats’ transactions, down from 17% last year.
The tough conditions for renters aren’t going away soon.
“We are looking at a rising rental market for at least the next year,” said Jonathan Miller, CEO of Miller Samuel, which compiles reports for Prudential Douglas Elliman.
The most in-demand neighborhoods continued to command celebrity-worthy rents.
The average rent for a two-bedroom apartment in SoHo/Tribeca was $5,936. Chelsea wasn’t much cheaper: The same size apartment rented for $4,896. Two-bedrooms went for $4,420 in the West Village.
“Downtown is the story,” Greenblatt said.
Overall, average studio rents were $1,952, up 3.6%, and one bedrooms rented for $2,698, up 6.5%. Two-bedroom rents were $3,817, up 6.1%, and three bedrooms went for $5,060, up 4%.
High Manhattan rents are leading to brisk rental activity for some new buildings in the boroughs, brokers said.
“Areas that were less in demand are becoming viable,” Malin said.