Believe it or not, rents are going down in Manhattan.
At least that is what a report from The Real Estate Group is saying. In their August 2007 Manhattan Rental Market Report, the brokerage states that, after a peak this summer, rents are down boroughwide.
And the neighborhood where one-bedrooms had the steepest decline? Soho. In July, you would be paying close to $3,800 for a one-bedroom in a non-doorman building in the trendy neighborhood. Now, rentals are available for about $3,400.
According to the report, landlords are not reducing rents to deal with increasing vacancy. Rather, they are offering to pick up all or part of an apartment’s broker fee. Well, that is nice of them.
The full release about the report is below.
NEW YORK, NY August 21, 2007 –
Citywide Rents Decline and OP’s Increase 200% in August
The Manhattan rental market slowed down earlier than expected after peaking this summer. For the first time this year, mean rents declined in almost all units citywide, according to the August 2007 Manhattan Rental Market Report http://www.tregny.com/manhattan-apt-rental-report.jsp released by The Real Estate Group.
Citywide one bedroom units had the greatest decrease yet this year. Two bedroom rents in SoHo continue to plummet, and are the lowest they have been all year. Also declining are rental prices in Greenwich, which fell across the board.
The number of vacant units this month is significantly greater than expected at this time of season, another sign of a cooling rental market.
Landlords are now scrambling to reduce vacancies, but not by reducing rents. Instead, they are turning to tactics typically reserved for down markets. In the last two weeks, the Listings Department of The Real Estate Group has seen a 200% increase in OP’s (Owner Pays) being offered. This allows owners to keep rent rolls high, while offering to compensate the tenant by picking up all or part of the broker fee.
“Landlords have increased prices to such a height that people are having trouble affording their rent. Therefore, landlords have more vacancies on the horizon than they expected,” says The Real Estate Group’s C.O.O. Daniel Baum.
The August 2007 edition of the monthly Manhattan Rental Market Report is based on over 10,000 currently available listings located below 100th Street and under $10,000. Data from The Real Estate Group’s proprietary database combines statistics from the REBNY Real Estate Listings Source (RLS), On Line Residential (OLR.com) and R.O.L.E.X. (Real Plus).