July 18, 2022: -The average monthly rent for a Manhattan apartment surpassed $5,000 for the first time, and brokers say demand and prices are headed even higher into the decrease.
In June, the average apartment rent was $5,058, the highest on record, according to a report from Miller Samuel and Douglas Elliman. The rental prices increased nearly 29% from last year, while median rent touched by 25% to $4,050 monthly.
Aside from pricing out renters, the increases could have knock-on effects between broader inflation pressures. Rents are a crucial component of the government’s consumer price index, which increased 9.1% from a year ago, and New York is the largest rental market in the nation.
The continued price pressure in Manhattan rentals could add to higher inflation in the months ahead and put more pressure on the Federal Reserve to increase rates to tame prices.
“There are no signs of a slowdown, at least not yet,” said Jonathan Miller, CEO of Miller Samuel.
Miller said higher mortgage rates and fears of a housing downturn drive more potential buyers into the rental market.
At the same time, the supply of Manhattan apartments available for rent, which ballooned during the pandemic, is now near record lows. At June end, the vacancy rate was just 1.9%, with about 6,400 apartments available, down 46% from last year.
Brokers say that the families and renters who left the city during the pandemic are returning despite concerns about high crime, taxes, and troubled subways. Younger renters are pouring into the rental market. Millennials and some members of the Gen Z demographic are coming to the city after college or working remotely from high-rise rentals to take advantage of the culture and nightlife of the city.
“At the end of the day, they want to be in New York,” said Valirjana Gashi, a broker at Serhant. “Even some families that went to Miami are coming back.”
July and August are typically the most significant rental months in Manhattan as tenants look for September beginning dates ahead of a return to school and work. Brokers say that while open houses for sales listings are almost empty, public places for rentals have never been more crowded.
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