By Prashant Gopal and Katie Spencer - Oct 13, 2011 6:01 AM GMT+0200
Manhattan apartment rents climbed 4.9 percent in the third quarter from a year earlier as tenants opted to renew leases in a tightening market, leaving home- seekers to compete for fewer vacancies.
The median effective rent, or what tenants pay after landlord-sponsored incentives, increased to $2,970 a month from $2,831 a year earlier, according to a report by appraiser Miller Samuel Inc.and broker Prudential Douglas Elliman Real Estate. New leases declined 6.9 percent to 7,998, and the number of listings on the market dropped 1.9 percent to 4,605.
Stricter mortgage-lending standards and weak consumer confidenceare limiting demand for home purchases, leading to increased competition for rentals, according to Jonathan Miller, president of New York-based Miller Samuel. Tenants are staying put as rents rise and a limited supply of three- and four- bedroom apartments prevents them from trading up, he said.
"Their options have become more limited," Miller said in telephone interview. "You find more tightness as you move up in size, both in terms of what's available and the jump in cost."
Three-bedroom apartments commanded a median $6,295 a month before concessions, a 20 percent increase, and new rentals of units that size declined 35 percent to 327, the report showed.