As July nears its end, New Yorkers are passing the halfway mark of a sunny, sweltering summer. With dizzying heat waves crossing the country and sending miserable New Yorkers a-scramble for sunblock and the nearest air conditioner, a bit of (semi-)good news would not be amiss. So we at Luxury Rentals Manhattan are happy to report that -- once again -- our past predictions for the summer have come to fruition, despite our recently tempered views. The summer Manhattan rental season has continued to grow in strength according to July’s rental market report, with rents climbing across the board. And while only last month we touted the price benefits of non-doorman buildings, July sings quite a different tune. The prices of doorman and non-doorman buildings are slowly drawing even as the market buffs up and rents rise, closing June’s price gap between the two types of rentals.
Prices continued June’s steady summer climb this month, rising 1.21% overall -- 1.13% in non-doorman rentals and 1.29% in doorman rentals. Tribeca remains as the most expensive neighborhood for both doorman and non-doorman buildings, while prices for Chelsea non-doorman studios shot up 9.71% --- the greatest price change since June. The summer turnover is also beginning to settle down, resulting in a decline in inventory, down 2.39% - 1.07% in non-doorman units and 3.28% in doorman units. Now all of this may not be especially surprising, as rising rents and dropping vacancies have been a trend that can be traced as early as late May, when the usually-strong summer NYC rental market began. What’s more unusual is the shrinking gap.
While rents have incrementally gone up overall, July’s rental market report also notes that the gap between non-doorman and doorman listings is closing. Luxury Rentals Manhattan has often endorsed non-doorman apartments as one of Manhattan’s better values. Last month, rents for non-doorman apartments dropped where doorman apartments rose, creating some enticing deals for Manhattan renters. But now the prices of both doorman and non-doorman apartments have seemingly begun to align, with prices up and inventories down for both. In Midtown West non-doorman one-bedroom prices jumped while doorman one-bedrooms held steady. In Chelsea the change was even more dramatic -- as evidenced by the graph -- with non-doorman studios closing in on doorman studios. With prices this close, for once in the NYC real estate market, doorman apartments may be a better deal for the renter looking for more bang for his buck.
What else does all this mean for those scouring the Manhattan rental market? These rent increases and dropping inventory point to the positive health and regained confidence of the Manhattan rental market -- though renters may not view the rent increases in a particularly positive light. But renters need not lose hope. Those looking for an apartment in NYC might want to check out two-bedroom apartments this month, as non-doorman two-bed prices dropped in several neighborhoods including: Midtown West (which dropped by 7%), Greenwich Village (dropped by 2.4%), and Midtown East (which dropped by 4.16%). Inventory will likely continue to settle down into August and September, with vacancies dropping and the summer turnover slowing its pace even further. But while inventory’s levels are settling, that doesn’t mean the market will. If the current activity markers of rising rent and steady demand hold without any radical changes, the Manhattan real estate market is poised to gain further strength throughout the rest of summer and heading into the fall. So grab an ice pop and dig out that floppy hat -- the heat of summer, and the heat of the Manhattan real estate market, isn’t over yet.