The average rental price in Manhattan was at a near all-time high again last month, as higher mortgage rates and home prices drive potential homebuyers into rentals.
The typical rent in the borough was $5,249 in November, up 19 percent from 2021 and the third-highest ever recorded, according to real estate brokerage firm Douglas Elliman and Miller Samuel.
The average rent was down slightly from October’s numbers but year-on-year rent keeps rising in the first year of Mayor Eric Adams’ term.
Median rent, which is a better reflection of the prices a typical renter would face, hit $4,095, up 18.7 percent from this time in 2021 and 2.1 percent from October.
Most Manhattan landlords require an annual income of 40 times the monthly rent, meaning renters would need to bring home a salary of at least $163,800 to secure the median apartment.
Listing inventory for rentals is up four percent from this point last year. Back in July, listing inventory was down 44 percent, so the market appears to be opening up a bit.
The average rental price in Manhattan was at a near all-time-high again last month, as higher mortgage rates and home prices drive potential homebuyers into rentals
The typical rent in the borough was $5,249 in November, up 19 percent from 2021 and the third-highest ever recorded, according to real estate brokerage firm Douglas Elliman and Miller Samuel
The average rent was down slightly from October’s numbers but year-on-year rent keeps rising in the first year of Mayor Eric Adams’ term
The typical apartment spends just 21 days on the market before being snapped up by a renter, less than a third of the standard turnaround seen a year ago.
Two-bedrooms had a median rent of $5,500 in November, and three-bedrooms typically went for $7,925, increases from a year ago of 12 percent and 32 percent respectively.
Strong demand for rentals has been caused by rising mortgage rates that make owning a home impossible for many.
Jonathan Miller, president, and CEO of Miller Samuel said: ‘Rents aren’t rising like they were earlier this year, but they remain stuck at a high level. Since rents peaked at the end of summer, they have now drifted slightly lower, but are not falling significantly.’
Miller notes November was the largest decline in new lease signings since the pandemic began. Vacancies went up for the seventh straight month.
He added that concessions from landlords such as getting your first month’s rent free are also up, with 16 percent of new leases offering them vs. 13 percent in October.
Bess Freedman, CEO of Brown Harris Stevens, said that part of the blame is due to overreaching by landlords. She told CNBC: ‘There is some gridlock. In 2021, rents took off like a rocket and now tenants are stuck. People aren’t going to sign new leases at these prices, they’re just too expensive. Landlords need to start getting more reasonable.’
Miller gives an unfortunate prediction: that rents will only go down if the economy goes into recession.
He said: ‘The economy, or employment, remains too strong to enable rents to drop significantly. The only way we’ll see a significant improvement in affordability is to go into a recession, and who wants that?’
Unemployment is at 3.7 percent across the country, nearly as low as when the pandemic began in early 2020.
As rental prices broke records in May, New Yorkers also began sharing videos of long lines stretching across street corners of people looking to view some of the more affordable apartments in the city
The city’s seasonally adjusted unemployment rate was 5.9 percent in October 2022, up 0.3 percent from September and a decrease of 2.0 percent from October 2021. New York State’s rate was 4.4 percent in October 2022, according to the city’s own statistics.
During the COVID-19 pandemic, many New Yorkers fled the city, and rental prices plunged as desperate landlords tried to lure willing renters into their units with special deals.
Many property management firms offered deep discounts or sweeteners, including multiple months of free rent, to entice renters to sign new leases.