Posted by Jonathan J. Miller -Thursday, April 12, 2012, 11:56 AM
We published our report on the Manhattan rental market for 1Q 2012 this morning. I’ve been authoring this report series for Douglas Elliman since 1994 and added this regional report three years ago (but have over 20 years of historical behind it).
Rents continue to rise, but rather than being a leading indicator of an improving economy and sales market they are a reflection of an irrationally tight mortgage lending environment. Drivers of tight credit, namely low rates, rising foreclosures, more regulations and sliding housing prices are keeping underwriting standards above historical norms and as a result, driving more volume into the rental market driving rents higher. This is a national phenomenon, not just a Manhattan situation.
Here’s an excerpt from the report:
Year-over-year prices continued to show strong gains as landlord concessions declined. Median net effective rent was $3,064 for the first quarter, 9.1% higher than $2,808 in the prior year quarter. Use of concessions fell to 11.1% winthin all new rentals from 36.8% in the same period last year. Rental price per square foot increased to $52.57 in the first quarter, reaching its highest level since the third quarter of 2008, just as the credit crunch began.
I’ve got a tool to build custom data tables on the Manhattan rental market. I will be updating the chart section shortly. In the meantime you can see other market areas and some other generally cool housing market charts (IMHO).