Manhattan is facing sticker surprise, with moderate rent at $5,200

December 13, 2022: -In November, the brokers stated that Manhattan rents increased 2%, dashing hopes that prices would cool and forcing renters to give up their leases or downsize.

The median renting for a Manhattan apartment in November reached $4,033, up from $3,964, a report from Douglas Elliman and Miller Samuel. The average rent, skewed by luxury sales, fell slightly but is still up 19% over the previous year, hitting $5,249 in November.

The increases continue defying predictions that New York’s sky-high rents would fall after the summer and give renters a little relief after rents hit records. While rents ease in numerous parts of the country, New York’s rents remain stubbornly increased, and the number of unrented or empty apartments is low.

“Rents are not decreasing as quickly as many would hope,” Jonathan Miller stated as CEO of Miller Samuel.

The increase in New York rents adds pressure to inflation since rents are a significant component of indexes, and New York is the nation’s biggest rental market.

Manhattan rents are so increased that many tenants have started to baulk at the prices, either moving out of the city to smaller, less expensive rentals. According to Miller, the number of new leases signed in November tumbled 39% over October, marking the most significant decline since the start of the pandemic in 202r.

Brokers and real-estate experts stated landlords over-reached when they started renewing the leases signing in 2020 and 2021, often demanding 20% or more rent increases. With landlords typically requiring renters to have an annual income of 40  the monthly rent, the increasing median rents have stretched numerous tenants to the breaking point.

“There are a few gridlocks,” stated Bess Freedman, CEO of Brown Harris Stevens. “In 2021, rents are taking off like a rocket, and now tenants are stuck. People aren’t going to sign recent leases at these prices; they’re just too expensive. Landlords need to start which is more reasonable.”

Freedman added that one of her friends met a rent increase of 30% with the last lease renewal. “She felt such as she was being gouged,” Freedman added.

Vacancy rates remain low, demanding landlords to lower rents anytime soon. According to Miller Samuel, the vacancy rate in November was 2.4%, still below the historical rules in Manhattan of about 3l.

There are a few early signs that landlords may begin capitulating in 2023. The number of landlord concessions, including a month of free rent and other deals, increased to 16% in November from 13% in October. Real-estate experts state the significant drop in new leases will eventually force landlords to rent at a lower price point if it continues.