Sunday, July 21, 2024

Average rent in Manhattan was $5,000 last month


Chelsea Tower apartments for rent.

Jeff Greenberg | Getty Images

The average monthly rent for a Manhattan apartment topped $5,000 for the first time — and brokers say demand and prices are trending higher in the fall.

The median June apartment rent was $5,058, the highest ever, according to a report by Samuel Miller and Douglas Elliman. Average rental rates are up 29% from last year, while average rent is up 25% to $4,050 per month.

Aside from pricing for many tenants, the increases could have spillover effects amid broader inflation pressures. Rents are a key component of the government’s consumer price index, Which increased by 9.1% from last year in JuneNew York is the largest rental market in the country.

Continued price pressure on rents in Manhattan could drive up inflation in the coming months, and increase pressure on the Federal Reserve to raise interest rates in an effort to tame prices.

“There are no indications of a slowdown, at least not yet,” said Jonathan Miller, Miller Samuel CEO.

Miller said higher mortgage rates and fears of housing decline are driving more potential buyers into the rental market.

Meanwhile, the supply of apartments available for rent in Manhattan, which has ballooned during the pandemic, is now approaching its lowest levels. The vacancy rate at the end of June was just 1.9%, with about 6,400 apartments available – down 46% from last year.

Brokers say many families and renters who left town during the pandemic are now returning, despite fears of high crime rates, taxes and troubled subways. Younger tenants are also flocking to the rental market. Millennials and even some Generation Z demographics come to town after college or work remotely from high-rise rentals to take advantage of the city’s culture and nightlife.

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“At the end of the day they want to be in New York,” Valeriana Gashe, a brokerage at Serrant, said. “Even some families who went to Miami are coming back.”

July and August are usually the biggest months for renting in Manhattan as renters look for September start dates before returning to school and work. Realtors say that while listings open homes are nearly empty, open homes for rent have never been more crowded.

“When good rent comes in at the market, especially downtown, there are queues down there,” Gashi said.

Bidding wars are now routine for hire. Gashi said one of her clients is looking at the one-bedroom downtown that’s listed at $6,000 a month — up from $5,000 a month last year. Customer offers $6750 to try to avoid bidding competitors.

She also has a client who plans to eventually buy in Manhattan but rent in the meantime, on a budget of over $30,000 per month.

“He is willing to spend on rent because when the time comes to buy, he hopes to save more on the purchase,” she said. “He thinks selling prices are about to drop.”