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Manhattan's Average Rent Hits $4K, Report Finds

By Amy Zimmer | May 15, 2014 8:40am
 Just before the busy rental season hits, Manhattan saw average prices soar above $4,000 a month.
Manhattan and Brooklyn rents for April 2014
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MANHATTAN — Good luck finding an affordable apartment this summer.

The rental market is heating up, with Manhattan apartments hitting an average of just over $4,000 per month in April, jumping more than 5 percent compared to last year, according to a report released Thursday by Douglas Elliman.

Harlem saw Manhattan's largest yearly increase in average rent, up 13.7 percent from last April to $2,528 a month, according to a separate report by MNS. In Brooklyn, Bedford-Stuyvesant saw the biggest leap in rents, including a 21 percent spike for studios, which now average $2,005 a month, MNS found.

And experts don't expect prices to drop in the near future, especially as Memorial Day kicks off what is typically the most competitive time of year for rents.

"We're at this high-end plateau and we're going to remain at it for a while," said real estate expert Jonathan Miller, author of the Elliman report.

Miller attributed the rent spike to increased employment rates along with tight credit and rising interest rates, which keep tenants in the rental markets because it is difficult to purchase a home. None of those conditions are expected to change anytime soon, he said.

Landlords are in the driver's seat, noted Gary Malin, of Citi Habitats, whose report found Manhattan's vacancy rates dropped for the fourth straight month to 1.36 percent for April.

That spells trouble for renters looking in the summer, when the market usually sees twice as much activity as in the winter, he said, adding, "People need to understand a minute of indecision will cost you the apartment that you like."

While some renters looking for a deal may try Brooklyn instead of Manhattan, prices are rising across the East River as well.

Popular parts of North Brooklyn and brownstone Brooklyn saw rents rise for the 11th straight month in April, with the average price now $3,209 a month, up 6.4 percent from the year before, the Elliman report found.

"You're seeing people get priced out of certain neighborhoods in Manhattan and Brooklyn," said Andrew Barrocas of MNS.

The tight market isn't just affecting renters in the $2,000 price range, he added.

"I had a woman looking to spend $10,000 [a month] on a large one-bedroom and isn't getting her first choices," he said of a client looking on the Upper East Side.

Douglas Elliman's Yuval Greenblatt is waiting to see what happens with supply, as hundreds of new rentals are set to hit the market in Manhattan's Hudson Yards and Financial District and across the river in Downtown Brooklyn and Williamsburg.

"It's a supply-side story," he said. "The demand is good."

For the long term, the new buildings are still not enough, Greenblatt said, noting that many New Yorkers are hopeful the market could get a boost from the de Blasio administration's 10-year-plan that aims to create 80,000 new units of affordable housing.