Manhattan's renting reached a recent high record in January

February 14, 2023: -Median rents in Manhattan hit a recent record in January as a solid job market, and limited collection of apartments lifted prices.

The report from Douglas Elliman and Miller Samuel, the median rental price increased 15% to $4,097 from the year-earlier month, the highest ever in January. The average rent was $5,142, up 13% more than in January 2022.

Analysts and real estate experts included anticipated rents falling in January following record surges late in the previous year. But despite a cool economy and high-profile layoffs in economy and tech, rental demand in Manhattan remains strong.

“We’re not seeing rents decrease in any meaningful way,” stated Jonathan Miller, CEO of Miller Samuel, a real estate is improving and research company. “They’re moving sideways.”

While layoffs at large tech firms and Wall Street banks have assembled headlines, the job market and wage growth remain strong in New York. Analysts state that the main driver for Manhattan’s rental market is a strong job market. As more workers come back to the office, more employees may move back to the city.

New leases in January increased 8% over December and 9% over January 2022, meaning that while prices are high, rentering are still willing to pay them.

At a similar time, the inventory of available apartments, while rising, remains low. Miller said that the vacancy rate or share of apartments available for rent was 2.5% the previous month, below the 3% rate that’s more typical for Manhattan.

Joshua Young, executive vice president and operating director of sales who lost at Brown Harris Stevens, stated that the rental strength is “a tale of two cities.”

He said there is strong demand for high-quality return rentals coming on the market in prime areas, creating a limited supply of top apartments. At the same time, more potential building buyers are choosing to agree while they wait for sales prices to fall.

“They’re sitting and waiting in rentals until costs come down,” he said. “They don’t want to be the one buying and overpaying for a property that will be worth less in six months.”

Rental demand is exceptionally high in luxury rentals since many potential buyers choose to rent. In January, Miller said that nearly one in five luxury rentals led to a bidding war.

Analysts say rents will likely decrease little in the coming months unless the scrimping and job market lose steam.

“I believe 2023 will be just 2022 as far as the rental market,” Young said.