Chelsea Tower rental apartment sign.
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The average monthly rent for an apartment in Manhattan exceeded $ 5,000 for the first time. According to brokers, demand and prices will be even higher towards the fall.
Miller Samuel and Douglas Elliman reported that the average apartment rent in June was $ 5,058, a record high. Average rental prices were up 29% from last year, while average rents were up 25% to $ 4,050 per month.
Apart from pricing many lessees, the increase can have a knock-on effect in wider inflationary pressures. Rent is an important component of the government’s consumer price index, Increased by 9.1% from a year before JuneAnd New York is the largest rental market in the country.
Continued price pressure on Manhattan rents could add higher inflation in the coming months and put further pressure on the Federal Reserve to raise interest rates to keep prices down.
Jonathan Miller, Chief Executive Officer of Miller Samuel, said:
Mr Miller said rising mortgage rates and fears of a housing recession are driving more potential buyers into the rental market.
At the same time, the supply of rentable Manhattan apartments, which surged during the pandemic, is now approaching record lows. The vacancy rate at the end of June was only 1.9%, and about 6,400 condominiums were available, a decrease of 46% from last year.
Many families and lessors who left the city during the pandemic are now back, despite concerns about high crime, taxes and subway problems, according to brokers. Young renters are also pouring into the rental market. Even some members of Millennial and Gen Z demographics either come to the city after graduating from college or work away from high-rise rentals to take advantage of the city’s culture and nightlife.
“After all, they want to go to New York,” said Selhunt broker Barijana Gashi. “Even some of the families who went to Miami are back.”
July and August are usually the largest rental months in Manhattan, as tenants look for a start date in September before returning to school to work. According to brokers, open houses for sale are almost empty, but open houses for rent are more crowded than ever.
“There are lines under the blocks, especially when good rentals hit the market downtown,” Gashi said.
Bidding wars are now routine for rent. According to Gashi, one of his clients is looking at one-bedroom downtown, which is priced at $ 6,000 a month, up from $ 5,000 a month last year. The client is offering $ 6,750 to stave off rival bidders.
She also has a client who will eventually buy in Manhattan, while renting for over $ 30,000 a month.
“He wants to save even more on his purchases when it’s time to buy, so he’s happy to spend on rentals,” she said. She said, “He thinks the sale price will drop soon.”