The median rent in Manhattan was a record $5,000 last month.
A billboard for rental apartments in the Chelsea Tower.
Jeff Greenberg | Getty Images
The median monthly rent for a Manhattan apartment topped $5,000 for the first time, and brokers say demand and prices will be even higher in the fall.
According to Miller Samuel and Douglas Elliman’s report, the median rent for an apartment in June was $5,058, the highest ever. The median rent is up 29% year-over-year and the median rent is up 25% to $4,050 per month.
In addition to lowering prices for many tenants, the increase could have side effects amid broader inflationary pressures. Rent is a key component of the state’s CPI, which rose 9.1% year-over-year in June, with New York City 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 rates in an attempt to tame 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 worries about a downturn in the housing market are drawing more potential buyers into the rental market.
At the same time, the supply of rented apartments in Manhattan, which has skyrocketed during the pandemic, is now at an all-time low. 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 tenants who fled the city during the pandemic are now returning, despite concerns about high crime rates, taxes and subway problems. Young tenants are also entering the rental market. Millennials and even some Gen Zers are coming to the city after graduating from college or working remotely renting high-rise buildings to enjoy the city’s culture and nightlife.
“At the end of the day, they want to be in New York,” said Valirjana Gashi, broker at Serhant. “Even some of the families that went to Miami are coming back.”
July and August tend to be Manhattan’s biggest rental months as tenants look for rental start dates in September before returning to school and work. Brokers say that while open houses for listings are nearly empty, open houses for rent have never been so crowded.
“When there are good rentals on the market, especially in the city center, queues form along the block,” Gashi said.
Bid wars are now commonplace for rentals. Gashi said one of her clients is eyeing a one-bedroom downtown apartment that costs $6,000 a month – up from $5,000 a month last year. The client is offering $6,750 to try and ward off the competition.
She also has a client who plans to eventually buy a property in Manhattan, but is currently renting on a budget of over $30,000 a month.
“He’s willing to splurge on rent because when the time comes to buy, he hopes to save even more on the purchase,” she said. “He thinks the sale prices are about to drop.”