High Prices and Few Choices Force Renters to Stay Put, Experts Say
MANHATTAN —Summer tends to be a bustling time for the rental market, but things are a little different this year. Many Manhattanites seem to be staying put, real estate experts said.
The number of new rentals in Manhattan dropped 7.7 percent to 4,605, according to a report released Thursday by Douglas Elliman, which found the average rental price rose 1.7 percent to $3,822 a month.
It was the third straight month where the number of new rentals declined from the year before, suggesting more tenants are renewing their leases, said Jonathan Miller, a real estate appraiser who wrote the Elliman report.
It may be easier for landlords to keep their current tenants so they don't have to risk an empty apartment to renovate, and it may make more sense for tenants to pony up for increases rather than spend even more on moving expenses, he said.
The situation doesn't help the vacancy rate, which fell from 2.23 percent last year to 1.94 percent, according to the Elliman report.
"It's creating somewhat of a log jam," Miller said.
Brooklyn — where the average rent rose 8.2 percent to $3,035 a month — isn't faring much better, where the last two months saw the number of new rentals rise roughly 3 percent, down from double-digit rises in the previous few months, Miller said.
"With rents still near record highs, current city residents have little incentive to move," said Citi Habitats' President Gary Malin, whose firm's report found that the vacancy rate was up slightly to 1.28 percent, up from 1.20 last year.
"While still relatively low, this uptick in vacancy during the peak summer season is a sign that renters have reached their pain threshold," Malin said.
Jess Beck, a television producer who lives in Downtown Brooklyn near the Manhattan Bridge entrance, had been angling to leave the sleek high-rise she's lived in for two years for something cheaper in an area with more of a "neighborhood feel."
But her search is on hold, for now.
"The hassle of moving felt overwhelming at a time when both my husband and I were overwhelmed with work," she said. "Not to mention, the management company who owns our building didn't increase the rent for our new lease."
She'll revisit a possible move next year, she said.
Mark Menendez, Douglas Elliman's director of rentals, said prospective renters "now more than ever" were coming into the office to begin their searches, then opting to keep their own apartments at the last minute.
"They get the renewal letter from the landlord and say, 'You must be crazy.' And then they realize they can't get a better value," Menendez said.
Some Manhattanites who need to move, however, are looking further afield for new apartments.
"Compromise is the word of the day," he said.
Brooklyn neighborhoods such as Greenpoint and Williamsburg have seen steady interest for a while, but Menendez said he has been getting more inquiries for Queens neighborhoods like Long Island City and beyond.
"We're seeing Rego Park, Flushing and places that we usually don't get requests for," he said. "Bayside is pretty hot."