Manhattan’s would-be homeowners may not be comfortable buying expensive apartments right now. Instead, they’re renting them.
New leases for the borough’s priciest units, costing at least $10,000 a month, jumped 16% in April from a year earlier to 149, while agreements declined for the market as a whole, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The median rent in that upper tier climbed 3.9% to $13,995.
High-end tenants also needed fewer incentives to sign. About 19% of new leases at $10,000 or more came with a sweetener such as a free month. That compares with 37% of deals Manhattan-wide, the firms said.
Across all price ranges, rents climbed for a fifth straight month -- a resurgence fueled by demand from New Yorkers who have the cash for a purchase but are waiting for sellers to drop their sky-high prices. Many luxury-seekers are seeing greater value in a lease, even if they can afford to own the same apartment, according to Grant Long, senior economist at listings website StreetEasy.
“You have flexibility,” said Long, whose firm released a report showing surging demand for apartments in the city’s priciest zip codes. “For a lot of folks, borrowing heavily to invest in an asset that has been declining in price over the last year is something that’s difficult to swallow.”
A penthouse at the Ritz-Carlton in lower Manhattan’s Battery Park City, offered for sale last year at $8.5 million, found a tenant after being listed for rent at $19,995, according to StreetEasy. And in Brooklyn, a two-bedroom duplex was leased shortly after it came on the market for $8,500 a month. The same unit, in the Dumbo neighborhood, has also been for sale since July and is still seeking a buyer at $2.395 million.
This article was provided by Bloomberg News.