Manhattan’s rental market, particularly the luxury segment, continues to strengthen as potential buyers rent while waiting for the housing market to stabilize before making a purchase.
In February, the median rental price in Manhattan increased 3% year-over-year to $3,400 a month. The number of new leases signed, however, during the month dropped 11.3% to 3,443, according to a Douglas Elliman report released Thursday.
"The decline in the number of new leases is partly due to a rise in renewals," said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report. "Landlords are doing a better job at retention."
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The median rents across all price points trended higher last month, driven by the weakness of the sales market in Manhattan. "People camp out at the rental market until they feel more comfortable to buy," Mr. Miller said.
Luxury rentals—defined as the top 10% most expensive leases—outperformed the overall market, with median rents rising 5.9% year-over-year to $9,000 a month.
An even brighter spot was the segment of the market priced at or above $10,000 a month. There were 163 new leases signed at this price range, increasing 13.5% compared to February 2018. The median rent in this segment increased 4.4% to $13,495 a month.
The $10,000-plus leases accounted for 4.2% of the overall rental market in Manhattan, the second-highest market share in six-and-a-half years, according to Mr. Miller.
Additionally, the number of new leases with a monthly rent of at least $15,000 soared 45% year-over-year to 58. The median rent in this top-tier, though, fell 7.3% to $19,000 a month.
| Manhattan February Rental Market Snapshot | ||||
| Price range | Overall | $4,500+ | $10,000+ | $15,000+ |
| Median rent | 3,400 | $9,000 | $13,495 | $19,000 |
| Year-over-year change | 3% | 5.9% | 4.4% | -7.3% |
| Number of New Leases | 3,443 | 345 | 143 | 58 |
| Year-over-year change | -11.0% | -11.3% | 13.5% | 45% |
| New Leases w/Concessions (%) | 46.1% | 37.39% | 27.27% | 17.24% |
| Market Share | 100% | 10% | 4.2% | 1.7% |
| Source: Miller Samuel/Douglas Elliman | ||||
SoHo/Tribeca Was the Most Expensive Neighborhood
In terms of neighborhoods, the most expensive Manhattan rental submarket was SoHo/Tribeca, with a median rent of $5,695, according to a separate report released by Citi Habitats on Thursday.
The vacancy rate at the neighborhood was 1%, compared to 1.4% across Manhattan, the report said.
"The rental market released some of the pent-up demand that developed over the holiday season," said Gary Malin, president of Citi Habitats, in a statement. "Overall, apartment-seekers experienced slightly higher asking rents and less available inventory."
The second most expensive neighborhood was Gramercy/Flatiron, with a median monthly rent of $4,915, followed by Chelsea, where the median rent was $4,322 per month.