Prices remained mostly unchanged across Manhattan’s rental market last month, according to the latest market reports from two New York City brokerages released Thursday.
The median rental price in the borough rose just 0.6% in May to $3,495, said the report from Douglas Elliman, but leases surged 27.9% compared to April, the report said.
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The increase in signed leases is due to the sales market being soft, said Jonathan Miller, president of appraisal firm Miller Samuel and author of the Douglas Elliman report.
"What do people do, especially if they're on the fence about buying? They're going to rent," Mr. Miller told Mansion Global.
And renters are significantly favoring bigger—and therefore, more expensive—units, explaining the slight median price increases, Mr. Miller said.
Leases for homes with three or more bedrooms have increased by 68.2% since last month—almost twice as much as any other sized property—and 20% since May last year, the report said.
The number of landlord concessions—such as a free month’s rent or paid broker fee—offered as an incentive to new renters dropped on a monthly basis in May compared to April, but last month marked the "36th consecutive month of year-over-year rises in concessions‚" Mr. Miller said. Last month, 37.6% of rented properties were offered with concessions, down from 44.3% in April and an increase from 25.1% at the same time last year.
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Prices remained mostly unchanged, according to Citi Habitat’s data, too. One-bedroom rental properties in Manhattan logged the biggest price increases last month according to the firm’s data, up just 1% to $3,207 from April, while prices for studios and two-bedroom properties remained flat and prices for three-bedroom properties fell 1%.
When examining discounts, Citi Habitats found that 19% of its own rental transactions came with a concession in May, a decrease from 26% in April and down from 22% year on year.
The dip in concessions, along with fewer vacancies across the rental market, is skewing the market in favor of landlords, Citi Habitats said in the report.
"Through their effective use of concessions, owners have dramatically reduced the vacancy rate over the last six months," explained Gary Malin, president of Citi Habitats, in the report. "However, since February, they have begun to dial back the freebies offered to new residents, while keeping their face rents relatively unchanged."
The discrepancies in findings between the two reports can be explained simply, "We're looking at different data sets," Mr. Miller said. Each brokerage typically has access to data from their own transactions, while an external appraisal firm may have access to market-wide data.