We published our report on the Manhattan rental market for 2Q 2012 this morning. This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.
Key Points
-Rents are at their highest level in two years; the year-over-year pace has accelerated over the past 4 quarters.
-Use of concessions has all but evaporated with only 3.7% of new rentals having some sort of give back from landlords.
-Largest year-over-year rental price gains seen in smaller apartments.
-Tight credit conditions, rising rents and improving regional economy are pushing more tenants into purchase markets.
Here’s an excerpt from the report:
The average rent was $3,778, the highest rent in two years as tight mortgage lending conditions and regional economic gains continued to drive rental prices higher. Median rent was $3,125, the second highest level over the same period. Since landlord concessions were used in only 3.7% of new rental activity with those transactions averaging only 1 month of free rent, the year-over-year gain in median rent with or without concessions was the same at 7.9%. The average year-over-year median rental increase in each quarter of the past year has been 7.6%, indicating there has been no ease in the pace of rental price gains…
You can build your own custom data tables on the Manhattan rental market – now updated with 2Q 12 data. I’ll have the latest charts on the Manhattan rental market uploaded this evening.
Here’s some of the media coverage for the report today.
The Elliman Report: 2Q 2012 Manhattan Rentals [Miller Samuel]
The Elliman Report: 2Q 2012 Manhattan Rentals [Prudential Douglas Elliman]
It was barely a few weeks ago that mortgage rates were sitting at record lows. The idea of rates over 4 percent on the 30-year fixed seemed a distant memory. And here they are now at 4.05 percent on the Bankrate.com overnight, thanks to the recent rise in 
Justin Sullivan | Getty ImagesIs there a double dip in foreclosures on the horizon?Just as we saw a double dip in home prices, we may be seeing another surge in foreclosures. And just as the home price scenario was caused by artificial government stimulus, in the form of the home buyer tax credit juicing home sales only briefly, the foreclosure scenario was caused by real negligence, in the form of the "robo-signing" paperwork scandal. Banks and servicers stopped foreclosures entirely for a time after the malpractice was discovered, and courts delayed the process, picking through papers as foreclosures were resubmitted; that is now turning around. The system is ramping up again, and foreclosure starts are up dramatically, more than 10 percent in June from the previous month, according to Lender Processing Services (LPS). The good news of the past few months has been that while the end game is quickening, as stalled foreclosures are making their way through the system at a faster pace, new delinquencies were decreasing, leading us all to believe that the crisis is abating. Well think again. New delinquencies rose 2.4 percent in June, which isn't a lot, but it is still the wrong direction. This as the pipeline is still so clogged that foreclosure timelines continue to rise. The average loan in foreclosure in June was delinquent a record 587 days, and more than 40 percent of 90+-day delinquencies have not made a payment in more than a year. For loans in foreclosure, 35 percent have been delinquent for more than two years, according to LPS. Today's ![[cnbc explains]](http://scamfreepower.com/images/CNBCexplainsicon1.gif){kind=small}
on anything but a crippled foot. Questions? Comments? document.write("
When the defunct Sunny Day Real Estate regrouped for How It Feels to Be Something On in 1998, the band's fans were divided. Some saw it as a collection of frontman Jeremy Enigk's most potent songs, and others dismissed it because it didn't sound like the band's previous efforts. The Rising Tide will probably thin the herd even more, not because it's a bad album but because the band once again has gone traipsing through the fields to find a new pasture in which to graze. Tide engages their emo-antics with the kind of seven-cornered songs that made up Enigk's solo release, Return of the Frog Queen, but this time they're topped with a dose of progressive-rock overdrive. It sounds a bit hard to swallow, but producer Lou Giordano deserves a hand for making a shift of sound go down smooth. --Jason Josephes
First came the surge in negative home equity, now a surge in mortgage interest rates. Add it up, and it throws a big pail of underwater on the hope for a big spring housing surge. At face value on their own, the two reports out today shouldn't cause too much concern, but the effect they have on consumer confidence is bigger than both of them. The average rate on the 30 year fixed rate mortgage is now over 5 percent, which when you think historically is really a great rate, but that was then, and this is now. Consumer confidence and jobs are the two biggest drivers in the housing market. "Because we had rates as low as 4.25 percent last year, any increase — particularly to above 5 percent — is likely to reduce loan applications as borrowers adjust to a higher interest rate environment," says Guy Cecala of Inside Mortgage Finance. The biggest effect of course is in refis, which dropped over 7 percent last week, according to the Mortgage Bankers Association's weekly survey. Last year refis accounted for two thirds of all mortgage originations, so that will clearly change with the new rates. The question is how the rates affect home purchases. Purchase applications also dropped last week, but just by 1.4 percent. "We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis," says the MBA's Michael Fratantoni. Higher rates will make loans a little bit more expensive, but not all that much. The bigger driver of mortgage cost will be the new regulatory rules on the horizon and potential changes to Fannie Mae and Freddie Mac loan limits and fee structures. But rising rates also put a bigger burden on those trying to modify or refinance troubled loans, especially those underwater. The new report from Zillow notes that the foreclosure freeze from the "robo-signing" scandal put an artificially high number of borrowers in the underwater pool because many were supposed to be foreclosed and weren't. Still, as I Tweeted yesterday from Laurie Goodman of Amherst Mortgage Securities, "Home equity is the single most important determinant of mortgage default, not unemployment." Zillow's chief economist, Stan Humphries, agrees: "Once you get above 125-130 percent loan-to-value ratios, that means that you're 25 to 30 percent underwater on your house, at that point really you start to see a higher rate of strategic default, that's people actually feeling a sense of futility about making their mortgage payments and they walk away from the mortgage." And how high will rates go? "I think if the 10-year Treasury yield remains at around 3.70 percent, mortgage rates will head to 5.25 percent over the next two weeks," opines Peter Boockvar of Miller Tabak. Again, that's still historically low. "Realistically, long-term mortgage rates in the 5-6 percent range over the next few years would be affordable enough to support a “normal” housing market all things being equal," claims Cecala. Unfortunately nothing in today's housing market is normal or even approaching equal. Questions? Comments? document.write("