Manhattan Rents Rolling Downhill

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Could Manhattan rents have finally peaked? Anyone who owns property in the city will argue that prices here defy all laws of nature, but a new report by the Real Estate Group New York shows that rents may be starting to finally slip. "We're trending down since the peak, which is what I would call maybe July," says REGNY COO Daniel Baum. Since the beginning of the year, prices are still up slightly. Non-doorman studios went from $1,969 in January to $2,095 this month, a rise of 6.3 percent. But prices in many areas are down from the middle of the year. Doorman two-bedrooms climbed from $5,346 in January to a peak of $5,753 in July, then fell back to $5,520 in December. Some variation is to be expected as seasons change, but Baum insists we're seeing a trend. "This is the first time we're starting to see a slowdown on the rent side in the last three years or so," Baum says. The hardest hit area may be the financial district, which has seen some layoffs (and perhaps, therefore, a small exodus). Since last month the average asking price for a doorman studio in the financial district has come down $503, to $2,559. The peak was in September at $3,103. It should be noted that Manhattan sales continue to be strong and unperturbed by the subprime and general housing meltdown. There are two schools of thought on whether the eventual decline of sale prices will mean lower rents. Some think foreclosure refuges and hesitant buyers will push up the number of renters — and thus the rents everyone pays. Others think the general economic downturn will lead to a further lowering of rents. —Carol Vinzant