A Chelsea Tower rental apartment billboard.
Jeff Greenberg | fake images
The median monthly rent for a Manhattan apartment has topped $5,000 for the first time, and brokers say demand and prices will climb even higher into the fall.
Median apartment rent in June was 5,058, the highest on record, according to a report by Miller Samuel and Douglas Elliman. Median rental prices are up 29% from last year, while median rent is up 25% to $4,050 per month.
In addition to putting many renters out of price, the increases could have knock-on effects amid broader inflationary pressures. Rents are a key component of the government’s consumer price index, which increased 9.1% from a year ago in Juneand New York is the largest rental market in the country.
Continued pressure on rental prices in Manhattan could fuel inflation in the coming months and put more pressure on the Federal Reserve to raise rates in an attempt to rein in prices.
“There are no signs of slowing down, at least not yet,” said Jonathan Miller, CEO of Miller Samuel.
Miller said higher mortgage rates and fears of a housing recession are driving more potential buyers into the rental market.
At the same time, the supply of Manhattan apartments available for rent, which soared during the pandemic, is now near record lows. The vacancy rate at the end of June was just 1.9%, with some 6,400 apartments 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 subway problems. Younger renters are also coming into the rental market. Millennials and even some members of Gen Z come to the city after college or work remotely from high-rise rentals 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 for Serhant. “Even some of the families that went to Miami are coming back.”
July and August are typically the busiest rental months in Manhattan, as renters look for September start dates before heading back to school and work. Brokers say that while open houses for sales listings are nearly empty, open houses for rentals have never been busier.
“When a good rental comes on the market, especially downtown, there are lines at the end of the block,” Gashi said.
Bidding wars are now routine for rentals. Gashi said one of his clients is looking for a one-bedroom apartment downtown that is listed at $6,000 a month, up from $5,000 a month last year. The client offers $6,750 to try to avoid rival bidders.
She also has a client who plans to eventually buy in Manhattan but is renting in the meantime, budgeting over $30,000 a month.
“He’s willing to spend on rent because when the time is right to buy, he hopes to save even more on the purchase,” he said. “He thinks the selling prices are about to go down.”
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