(Bloomberg)—Manhattan’s apartment renters got a break in November, with leasing costs dropping after two straight months of increases.
The median face rent -- before landlord concessions are factored in -- fell 1.3 percent from a year earlier to $3,318, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a joint report Thursday. It was the fourth annual decline in the past six months and followed surprise hikes in September and October.
Landlords were willing to sacrifice higher rents to keep their buildings full. That’s because a persistent oversupply of newly built apartments is forcing them to compete for tenants. Concessions continue to rise. Landlords offered enticements -- such as rent-free months and payment of brokers’ fees -- on 42 percent of new leases, up from 30 percent a year earlier. Vacancies declined, a sign that the perks are working. The deals are compelling enough that would-be buyers are opting to remain renters while they wait for sellers to drop their asking prices in Manhattan’s bumpy sales market.
The vacancy rate was 1.65 percent last month, down from 2.35 percent a year earlier. Renters were quick to sign leases. Apartments were listed for an average of 29 days before getting scooped up, down from 49 days a year earlier. Rents rose in both Brooklyn and northwest Queens, thanks to openings at new developments. The median face rent was up 2 percent in Brooklyn, to $2,850, and 10 percent to $2,868 in the area that includes the Queens neighborhoods of Long Island City, Astoria, Sunnyside and Woodside. Don’t blame the Amazon effect. The tech giant’s decision to set up an office hub in Long Island City hasn’t made an impact on the market yet, according to Jonathan Miller, president of Miller Samuel.
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