It’s on again: the spring hunt for Manhattan apartments, and, according to the numbers, this season should be as grim for new tenants as the last one. A new report shows average monthly rents in many Manhattan neighborhoods, including perennial favorites the Upper West Side and the Upper East Side, virtually unchanged from the same period last year, despite the intervening economic worries.
The average monthly rent for an Upper West Side one-bedroom in a non-doorman building was $2,457 this May, according to the report from brokerage the Real Estate Group New York. In June of 2007, the average was $2,518—a pittance of a $61 change. On the Upper East Side, the one-bedroom, non-doorman average was $2,352 in May; it was $2,366 last June.
As this column has noted before, Manhattan rents (and those of much of brownstone Brooklyn) have remained very much the same since 2002. The rents went up as the city recovered from Sept. 11, and they’ve stayed up, with only minor fluctuations unnoticeable to the pocketbooks of many renters.
A big part of this stubborn rent stagnation is, of course, demand. Another report last week, from investment-sales brokerage Marcus & Millichap, put the vacancy rate for large, market-rate Manhattan apartment buildings at under 3 percent for the first quarter of 2008. It is not expected to rise above that percentage this year.
Why not? After all, conventional wisdom holds stubbornly that even the mighty Manhattan economy has begun an irreversible turn, joining the nation and the state in the prolonged doldrums. Not really: Four of the five boroughs in April had unemployment rates no higher than the nation’s 4.8 percent (the Bronx was the exception), and Manhattan’s, at 3.9 percent, was well under New York State’s as well. Plus, the imagined tens of thousands of layoffs in the financial services sector, that great driver of both commercial and residential real estate locally, have yet to materialize.
For all the bluster and fuss, the local economy remains on the precipice rather than over it. And that is why Manhattan rents haven’t dropped in any meaningful way in time for the spring rental season. The island’s doing just too damn well right now.