Manhattan Apartment Rents Drop, Incentives Increase

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Median apartment rents in Manhattan dropped for the fourth straight month in December, as potential tenants increasingly turn to the homebuying market. 

The median rental price in Manhattan dropped 1.6 percent from the previous year to $3,100 in December, according to a report from Douglas Elliman Real Estate.  

Incentives from landlords such as one month's rent free were offered in 12.8 percent of transactions, increasing from 4.3 percent the previous year. 

"The rental market is cooling off a little bit," Jonathan Miller, president of New York-based Miller Samuel, told Bloomberg. "It's not an indication that the market is weak, they're just off this frothy activity we've had for two years."

The apartment vacancy rate increased to 2.79 percent, up from 1.77 percent a year earlier. The number of new rentals fell 27.3 percent to 2,109 in December. 

The decrease in rental demand was due in large part to an "unusually heavy sales volume" at the end of 2013, the report states. 

A separate report from Douglas Elliman showed co-op and condo sales in Manhattan increased during the fourth quarter, marking the highest fourth quarter the firm has ever recorded. 

Meanwhile, the median rental price in Brooklyn increased 0.9 percent to $2,660, with the majority of the price gain seen in the studio market. The pace of rental price growth has slowed for the last three months, with listing discounts increasing.