Manhattan apartments renters push back to find better deals

Bloomberg

Manhattan renters left their apartments in search of better deals last month, pushing back against landlord price increases and taking advantage of a flood of new choices on the market.
New apartment leases totaled 5,203, a 34 percent jump from a year earlier and the first increase for June since 2012, according to a report by appraiser Miller Samuel Inc. and broker Douglas Elliman Real Estate. Landlords granted concessions in 9.7 percent of all new deals, the highest share for June in more than five years of record keeping.
“Tenants are resisting rent increases at renewal and trying options elsewhere,” said Jonathan Miller, president of Miller Samuel. The jump in newly signed leases suggests that “the landlord and the tenant are not in sync about the market.”
Apartment dwellers are seeking relief where they can in a Manhattan rental market where median costs have climbed 21 percent since the end of the recession in June 2009, according to Miller. They’re being helped by a surge of new listings, which is giving tenants the ability to bargain in a month when landlords typically don’t. The number of apartments marketed for rent at the end of June jumped 27 percent from last year to 7,442, according to the report.
“The conditions are showing more weakness than we’ve seen over the last couple of years,” Miller said. “Landlords are having to work a lot harder.”

Deal Discount
Apartment owners agreed to whittle an average of 2 percent off their asking rents last month to strike a deal, compared with the 1.1 percent discount they offered a year earlier, Miller Samuel and Douglas Elliman said. The median rent before concessions such as a month’s free rent are factored in was $3,444, up 2.2 percent.
June is typically a busy month for leasing in New York, with college graduates settling in after taking jobs and families moving before the start of the next school year. For the past three years, new agreements fell in June because escalating prices spurred existing tenants to sign renewals or seek alternatives outside the borough, Miller said. Now, the new listings have given them reasons to stay and negotiate.
That’s creating a disconnect between apartment seekers and landlords who see the summer months as a time to hold firm, said Gary Malin, president of Citi Habitats, which released its own report on the Manhattan rental market Thursday.
‘Prime Time’
“If you’re an owner, this is prime time — May, June, July, August — so they feel emboldened to push prices,” Malin said. Apartment seekers are “just not willing to bite at certain prices at this moment because they feel it’s a little bit out of reach for them. If they can’t find what they want, they’ll either wait a little longer or they’ll move to a different borough.”
Manhattan’s vacancy rate rose to 1.7 percent last month, the highest for June in Citi Habitats data since 2002.
Leasing jumped in Brooklyn and Queens last month, in part because newly built luxury towers drew renters seeking better values than they could find in Manhattan, according to Miller. New leases in Brooklyn jumped 21 percent to 1,063, while the median rent climbed 2.9 percent to $2,880, Miller Samuel and Douglas Elliman reported.
While new developments helped swell Brooklyn’s apartment supply by 33 percent, units listed for rent moved faster, taking an average of 44 days to find a tenant, compared with 51 last June, the firms said.