Manhattan landlords raise rents, abandon concessions

* Avg rent per square foot up 12.3 pct year over year

* Listing discount 1.8 pct vs 3.1 pct in 10 yrs to 2008

* ‘Things are not as dire’

By Helen Chernikoff

NEW YORK, July 8 (BestGrowthStock) – The Manhattan apartment rental
market strengthened in the second quarter as landlords drew
confidence from a more robust sale market, but it is still
softer than it had been in the past decade.

The average rent per square foot in the second quarter was
$49.60, according to a report from brokerage Prudential Douglas
Elliman. That is 12.3 percent higher than last year but 7.6
percent lower than the 10-year inflation-adjusted average of
$53.67, Elliman said.

Likewise, the number of listings on the market fell 31.8
percent to 4,972. But the average for the 10 years through
2008, when investment bank Lehman Brothers collapsed and sent
Manhattan’s real estate market into a tailspin, was nearly 16
percent lower at 4,193.

“What you have is a noticeable improvement from the
landlord’s perspective in the second quarter,” said Jonathan
Miller of appraisal firm Miller Samuel, who writes the Elliman
report. “The perception is that things are not as dire as they
were a year ago. That’s causing them to be more firm in their
asking rents.”

Home prices in Manhattan were flat in the second quarter as
the market returned to more normal sales and inventory levels,
according to reports released last week by Elliman and other

Indeed, Manhattan’s rental vacancy rate has fallen from a
high of 2.46 percent in February 2009 to 0.90 percent in June
2010, according to a report from brokerage Citi Habitats. The
rate was last below 1 percent in August 2007.

A year ago, landlords were enticing tenants by paying their
broker fees and offering months of free rent, said Stephen
Kotler, who runs Elliman’s rental business in New York City.

Citi Habitats concurs: “Owner-paid concessions are becoming
a thing of the past.”

The “listing discount,” which measures the spread between
apartment’s advertised and actual prices, fell to 1.8 percent,
lower even than during the 10 years before Lehman collapsed,
when it was 3.1 percent, Miller said.

(For more on apartment rents across New York City and
nationwide, click on [N07161281])

But the significance of the rental market’s newfound
stability should not be overstated, Miller said.

“It’s not clear whether this is a trend or an anomaly, but
it’s certainly a different pattern from what we’ve seen in the
past year,” he said. “Unemployment is still very high, so it’s
not some sort of rental boom.”
(Reporting by Helen Chernikoff; Editing by Steve

Manhattan landlords raise rents, abandon concessions