Vacancy rates in Manhattan are back below 1 percent for the first time in nearly three years -- an indication, analysts say, that the Big Apple is rebounding after a long recession and high unemployment.
After two years of falling rents and negotiable fees, landlords again are seeing an uptick in demand, according to Citi Habitats' second quarter report.
"It's night and day from a year ago," said Gary Malin, Citi Habitats' president. "Demand sets the market, and there is just unbelievable demand. We're back to what New York was before this downturn," he told the Wall Street Journal.
Citi Habitats said average rents for studios climbed 3.5-percent from the first quarter to $1,811, while one-bedrooms jumped 5-percent to $2,448. Even three-bedrooms, which can take longer to fill because of higher price tags, rose 3% to $4,478. Studios and one-bedrooms increased from a year ago, while two-bedrooms dipped 1.6 percent.
As a counterpoint to last year, owners are now standing firm on pricing and scaling back the freebies, the Journal said. Several major landlords, including Related Cos., have stopped paying the broker's fee in recent months.
In many areas, "the incentives that were commonplace just about a year ago have now been essentially eliminated across the board," said Daria Salusbury, a senior vice president with Related, which has about 5,000 local units.