A billboard advertising apartments for rent in Chelsea tower.
Jeff Greenberg | beautiful pictures
The average monthly rent for a Manhattan apartment crosses $5,000 for the first time ever – and brokers say demand and prices are even higher in the fall.
The median apartment rent in June was $5,058, the highest on record, according to a report from Miller Samuel and Douglas Elliman. The average rent is up 29% year over year, while the median rent is up 25% to $4,050 a month.
Besides valuing more tenants, the increase could have a direct impact amid growing inflationary pressures. Rents are a major component of the government’s consumer price index. up 9.1% from a year ago in Juneand New York is the nation’s largest rental market.
Continued rental price pressures in Manhattan could drive inflation higher in the coming months and put more pressure on the Federal Reserve to raise interest rates in an effort to rein in prices.
“There is no sign of a slowdown, at least not yet,” said Jonathan Miller, CEO of Miller Samuel.
Miller said higher mortgage rates and concerns about a housing downturn are driving more potential buyers into the rental market.
At the same time, the supply of rental apartments in Manhattan, which has skyrocketed during the pandemic, is now near a record low. The vacancy rate at the end of June was just 1.9%, with about 6,400 units available – down 46% from last year.
Brokers say many families and renters who left the city during the pandemic are now returning, despite concerns about high crime, taxes and troubled subways. Younger tenants are also pouring into the rental market. Millennials and even some members of the Gen Z demographic will come to the city after college or work remotely from rental apartments to take advantage of the city’s culture and nightlife. .
“At the end of the day, they want to be in New York,” said Valirjana Gashi, a broker at Serhant. “Even some of the families that have been to Miami will come back.”
July and August are usually the biggest rental months in Manhattan as tenants look for September opening dates before going back to school and work. Brokers say that while there are almost no homes for sale, there are more open houses for rent than ever before.
“When a good rent comes into the market, especially in the city center, there is a lot of space,” says Gashi.
Bidding wars have now become the norm for leases. Gashi said one of her clients was looking for a one-bedroom apartment downtown that was listed at $6,000 a month — up from $5,000 a month last year. Customers are offering $6,750 to try and block rival bidders.
She also has a client who plans to buy her last apartment in Manhattan but is renting in the meantime, with a budget of more than $30,000 a month.
“He’s willing to spend on rent because when the time is right to buy, he hopes to save more on shopping,” she said. “He thinks the selling price is about to drop.”