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Manhattan Rents Growing Faster Than Sales Prices, Report Shows

By Amy Zimmer | December 29, 2016 10:48am | Updated on December 30, 2016 5:16pm
 Upper Manhattan had the fewest discounts while North Brooklyn had the most, StreetEasy found.
Upper Manhattan had the fewest discounts while North Brooklyn had the most, StreetEasy found.
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MANHATTAN — Prices for Manhattan rents are growing at a faster clip than sales prices, according to a report released Thursday by real estate search engine StreetEasy.

The rental market showed more strength in November than the market for resales: The median rent prices in Manhattan increased to $3,245 a month, nearly 2 percent higher than in November 2015.

Meanwhile median resale prices barely budged, increasing a mere 0.5 percent to $979,791.

That was the slowest pace of price growth since January 2011, the StreetEasy report said.

Across the borough, the area that saw the largest price growth and most competition — in both rentals and sales — was, perhaps unsurprisingly, the area with the lowest prices: Upper Manhattan.

SE report

The median sales price for the neighborhoods of Harlem, Inwood, Washington Heights, Hamilton Heights and Manhattanville were up nearly 6 percent from November 2015 to $633,144 — which was still the borough's lowest.

The median rent for these Upper Manhattan neighborhoods rose more than 6 percent to $2,449 a month.

While this remained the least expensive in the borough, Upper Manhattan rents also represented the largest increase on the island.

At the same time, Upper Manhattan rentals had the fewest discounts given off the listed price, according to StreetEasy. Less than a third of the rental inventory in the area was discounted.

Manhattan-wide, the number was closer to 43 percent.

“Heading into winter, the rental market typically slows down and landlords are eager to fill vacancies, presenting renters with potential opportunities to negotiate,” StreetEasy economist Krishna Rao said in a statement. “This year, Upper Manhattan is bucking that trend. If you are shopping for a rental apartment in that area, don’t expect competition to ease up much this winter. Come prepared with checkbook in hand.”

The data shows how much more prevalent discounts on rent were in Manhattan and Brooklyn’s pricier neighborhoods.

For instance, roughly 47 percent of listings Downtown — which includes areas from Chelsea and the Village to Chinatown and the Financial District — were discounted. Yet, the median rent remained highest there at $3,652 a month.

Renters willing to shell out a lot might also have more wiggle room to negotiate in Williamsburg, Greenpoint and Bushwick.

Nearly half of all rentals — 48 percent — were discounted in November.

Yet, the North Brooklyn area remained the borough’s most expensive, StreetEasy found, even as the median price dipped nearly 2 percent to $3,079 a month.

While rental discounts and concessions — like a month’s free rent — seem to be the new normal in pricier buildings, especially ones that have doormen or are in shiny new developments, brokers warn that deals aren’t being made across the board.

As evidenced by the StreetEasy data, discounts are harder to come by in Upper Manhattan. That, however, might be moot for some renters, given that prices are still lower in comparison.

“Tenants have wild expectations,” said Douglas Wagner, of BOND New York.

Still, he added, landlords are “conceding” if they want to keep vacancies down.

“We do a lot of expectation management on both sides,” Wagner said.

North Brooklyn also took a hit in the the re-sales market.

The area saw the biggest dip in prices since November 2015, at nearly 3 percent to $859,236, StreetEasy found.

The area now lost its hold as the most expensive in Kings County.

The crown was passed to neighborhoods around Prospect Park — including Park Slope, Prospect Heights, Prospect Lefferts Gardens, and Kensington — which had the biggest gains, jumping nearly 16 percent over the past year to $881,672.