|
Getting your Trinity Audio player ready...
|
Manhattan Rents Reach New Heights; Market Showing Signs of Slowdown in Leasing
Edited by: TJVNews.com
Despite soaring to new record highs in July, Manhattan’s rental market is showing signs of a potential slowdown in leasing activity, suggesting that the red-hot market might be approaching its peak, as was reported by the New York Post. The average rent paid by tenants in Manhattan reached $5,588 last month, marking a 9.3% increase from the previous year. Additionally, median rent hit $4,400 per month, setting a new record for the fourth time in the last five months, according to a rental market report from Miller Samuel and Douglas Elliman, according to the Post report.
While prices have surged by 30% compared to 2019, even amidst the pandemic-driven population decrease of 400,000 residents between June 2020 and June 2022, leasing activity experienced a 6% decline compared to the previous year, the Post reported. Analysts believe this dip in leasing activity could indicate that renters are reaching their affordability limits and that rents might be nearing their peak for the time being.
Miller Samuel CEO Jonathan Miller noted that while demand-driven price surges are common in other markets, the housing sector tends to behave differently, the Post report noted. As landlords push for higher rents, there seems to be a drop in the number of people actually renting. This potential plateau in rental prices is coming at a time when leasing activity typically peaks during the summer months.
“What’s a little different this month is that leasing activity fell, and typically July and August are peak leasing season,” Miller said, as was reported by the Post. “What this suggests is that consumers are beginning to hit the threshold of what they can afford, which may suggest that rents are approaching their peak for the time being.”
Miller told the Post that unlike in the sale of goods and services, where prices surge when there’s a greater demand, in housing “as landlords push to get higher rents, we’re seeing a drop in the people that are actually renting.”
Despite the potential slowdown in leasing activity, rental prices across various apartment types saw increases. The Post report indicated that studio apartments in Manhattan had an average rental price of $3,236 in July, while one-, two-, and three-bedroom apartments were rented at $4,366, $6,226, and $10,744 respectively. Luxury buildings in Manhattan commanded an average monthly rent of $15,260, showcasing a nearly 13% surge from the previous year, the Post report added.
Brooklyn and parts of Queens also experienced significant rent increases, with median rents in Brooklyn rising by 16.2% to $3,950 and average rents in Queens neighborhoods like Astoria and Long Island City spiking by 17% to $4,003. The Post report noted that despite these record-setting figures, analysts
predict that rental prices might remain stable in the near term, as the Federal Reserve’s outlook on the economy suggests that a recession is not imminent.
The Post also reported that Miller expects the record prices to be broken again next month, “the busiest leasing season of the year.”
“July is second, so it’s certainly possible to see another record net month, but I suspect we’re getting near the top,” Miller said, according to the Post report.
However, that doesn’t mean prices will be falling come September.
As Manhattan braces for the traditionally busy leasing season in August, experts anticipate that while record prices could be broken again, the market might be nearing its peak unless there is a significant economic event that impacts job stability.
