Manhattan's Residential Rental Rates Remained Flat in 3Q as Inventory Slightly Dipped

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Based on a new 3Q rental report by Manhattan-based Prudential Douglas Elliman, the median rental price, without concessions, was essentially unchanged year-over-year at $2,995. However, median rent with concessions (net effective monthly median rent), increased 4.9% over the same period to $2,970 from $2,831. Approximately 8.6% of new leases had some form of landlord concession compared to 45% in the prior year quarter.

The number of listings on the market declined 1.9% to 4,605 in the third quarter from 4,693 in the prior year quarter. Number of new rentals declined 6.9% to 7.998 from 8,593 in the same period last year as more tenants likely opted for renewals. The absorption rate for new rentals was 1.7 months, essentially unchanged from 1.6 month in the prior year quarter but down sharply from 7.7 months in the same period two years ago.

The 3.7% decline in new lease signings for studio apartments is attributable to the sharp decline in mortgage rates, pulling in first time buyers to the purchase market. The double-digit declines in new rentals across the 2-bedroom, 3-bedroom and 4+ bedroom markets resulted from the tightness of supply, more chronic in the large apartment markets as consumers seek out rentals in face of uncertain economic conditions.

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