Manhattan's Over-The-Top Rents Keep Rising; Studios Around $2,000

Friday, July 13th 2007, 5:40 pm
By: News On 6

NEW YORK (AP) -- If you're looking for a Manhattan apartment, be prepared to shell out about $2,000 a month -- unless, of course, you'd like a bedroom to go with it.

Studio apartments in New York's most expensive borough went for an average of $1,995 a month last year, according to an analysis released Friday by Citi Habitats, a Manhattan rental brokerage firm. That's up from $1,659 in 2002.

The average rent for a one-bedroom apartment shot up to $2,737, compared to $2,227 in 2002, and two-bedroom apartments climbed to $3,893, from $3,198 in 2002. Three-bedroom apartments saw the largest percentage increase: more than 36%, from $4,059 in 2002 to $5,534 last year.

The increase did nothing to decrease demand. The overall rental vacancy rate for Manhattan last year was less than 1%.

The report reflects that "we're the center of everything," said Citi Habitats spokesman Christopher Dente. "There's a lot of relocation -- thousands of people are coming in."

He attributed the bulging rents to the city's strong economy. In addition, the U.S. dollar is low against foreign currencies, "and we're a very popular destination for foreigners," Dente said.

Citi Habitats based its data on 50,000 deals the firm closed from 2002 to 2006.

About 75% of housing in Manhattan is comprised of rental properties. The company did not analyze properties in the city's other boroughs -- Brooklyn, Queens, the Bronx and Staten Island. The study also does not include Manhattan apartments subject to rent control or rent stabilization -- at least 10% of available properties.

The trend of rising rents continued in the first six months of this year with increases between 4% and 8%, said Citi Habitats CEO Gary Malin.

Rents in San Francisco and Boston, also among the nation's highest, generally pale in comparison to Manhattan, according to Marcus & Millichap, a California-based real estate investment broker that surveyed rents in cities around the country.

At the end of 2006, the average monthly rent in San Francisco was $1,685, while Boston renters paid an average of $1,632, according to Marcus & Millichap. The broker found the average rent across all five New York boroughs to be $2,553; Citi Habitats determined the average rent for Manhattan apartments to be $2,825.