Manhattan Rental Rates Up 1.7% Year-Over-Year, Inventory Declines 26.1%

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According to New York-based Prudential Douglas Elliman's latest Manhattan Rental Report for Q4, 2010, the median rent of a Manhattan property edged 1.7% higher to $2,950 from the same period last year and saw a seasonal decline of 1.7% from $2,900 in the prior quarter.

Listing inventory dropped 26.1% over the year, consistent with a 32-day decline in days on market to 44 days. This is less than the 60 day average over the past decade and also consistent with the sparing use of concessions over the past several quarters. 

Net effective rent is the face rent less landlord concessions such as free rent and other costs saved by the tenant. Face rents show limited volatility since concessions provide a large part of the ebb and flow of seasonal rental price changes.

PDE report represents the first time this metric has been measured in Manhattan. Moving forward they plan on expanding and building on this metric to study their trends. In the fourth quarter of 2010, 40.5% of rental transactions had an average concession of 8.47%, or one full month of free rent.

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