Manhattan Rentals Flying Off Market at Record Speeds, Expert Finds

By Amy Zimmer on October 11, 2012 7:10am 

MANHATTAN — If you’re looking to rent an apartment in Manhattan, you'd better be ready to pounce — and quickly.

Apartments are being snatched up faster now than they've been in two decades, according to a leading real estate analyst.

The average number of days an apartment stays on the market now is just 39 days.

Throughout this year, that number has hovered between 34 to 41 days, making it the fastest time for rentals on the market in the 20 years that real estate expert Jonathan Miller has been monitoring it.

But whether the market will continue to be tight or ease up a bit in the coming months depends on who you ask — and what data they’re using.

Average prices for Manhattan rentals rose 9 percent over the past year to $3,778 a month — with studios now renting for an average of $2,569 a month, one-bedrooms going for an average of $3,386 and two-bedrooms fetching $4,686 — according to a report released Thursday that Miller wrote for Prudential Douglas Elliman, using that firm’s data.

“Rents have been rising at a brisk rate for more than a year now,” Miller said, citing two main driving forces — tight credit, which has been an issue since Lehman’s collapse in 2008, and strong job growth in the city.

The rental market, which is more nimble and flexible than sales, responds more quickly to employment gains, he noted.

The vacancy rate dipped to 1.85 percent from 2.62 percent, the report found. But Miller said there was also more inventory and more “churn” in terms of movement of renters, likely because many people left apartments in search of better deals when faced with big renewal leases.

Miller doesn’t think the market is poised to change any time soon, especially since interest rates are expected to remain low through the beginning of 2015, which in turn will likely keep lenders from taking risks and keeping credit tight.

“It looks to me like you’ve got a year or two with a tight market,” he said.

Yuval Greenblatt, executive vice president at Prudential Douglas Elliman, also said that “apartments seem to be moving at a clip,” with a flurry of renters switching homes instead of renewing leases.

“People are starting to branch out, going to Brooklyn," he said.

"The rental market in Williamsburg has been insane.  Some people are going to Hoboken. They get frustrated. I had someone who lost an apartment because another applicant, equally qualified, showed up the same time and brought a deposit.”

But Gary Malin, president of Citi Habitats, said the trend of consistently rising rents, which showed slight increases every month from January to August, reversed last month, according to his firm’s latest report which used its company’s closed transactions during the third quarter.

Citi Habitats found that average Manhattan apartments rented for $3,453 a month in September 2012,  down $8 from August. This report also found that vacancy at 1.22 percent was up from last year’s .0.93 percent, making it the highest rate in 21 months.

“There has not been this much available inventory on the market in nearly two years,” Malin wrote in his company’s report.

“Prospects for renters traditionally improve during the fourth quarter, as temperatures drop and the Holiday season approaches. My advice to would-be tenants is to take advantage of these conditions.”

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