NYC median rents jumped in January, despite a plunge in new leases signed
A high proportion of last year's vacant apartments have been filled.
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There was a big drop in the number of new Manhattan leases signed in January but that didn't stop the median rent rising in what's typically a slow winter month. Renters were given little reprieve from rising rents across the city with the net effective rent—a number that includes concessions—also rising at record or near record rates in both Brooklyn and Queens.
The Elliman Report for the Manhattan, Brooklyn and Queens January rental market showed that in Manhattan, the median net effective rent increased annually at its highest rate on record to $3,467—the second-highest number ever recorded for January. In Brooklyn, the median net effective rent held steady at $2,747, the same as it was in December 2021, but an increase of 11 percent year over year.
The net effective median rent in Queens rose at its second-fastest annual rate on record to $2,811.
In addition, the vacancy rate has fallen to multi-year lows and inventory has dropped sharply. "The market has leased up very quickly to normal levels," says Jonathan Miller, president of the appraisal firm Miller Samuel and author of the report.
In Manhattan there were 4,316 apartments available to rent this past January, down from 25,883 the year before and a 9.2 percent drop compared to December 2021. Inventory levels in Manhattan have been falling at a record rate for six straight months. It's a very similar pattern in Brooklyn, where 2,780 apartments were available in January this year, down from 20,492 the year before.
So all the slack in the rental market from last year when apartments stood empty has largely been absorbed and at a rapid rate.
The report also shows a continuing trend towards surging rents at the top end of the rental market. The median rent for doorman buildings in Manhattan—which represents the high end—increased year over year at a record rate for the sixth straight month to $4,398. Non-doorman rent jumped annually at a record rate to $2,795 but remained below pre-pandemic levels, showing a continuing split in the higher and lower ends of the market.
Miller says the question going forward will be whether "landlords are able to overplay their hands to make up for lost time." Meaning can they increase rents to make up for losses incurred during the pandemic? Miller doesn't think so.
"One of the things learned during the pandemic is that many tenants are much more mobile than pre-pandemic and could be more likely to move around to offset overly-aggressive price rent adjustments," he says.
The data on non-doorman rents, which are still lower than they were in 2019, shows there is additional room for rents to rise in the lower half of the market.
The Corcoran group also released its Manhattan and Brooklyn reports for January 2022, which note that despite continued price increases, rentals in doorman buildings continue to be in high demand. In January, 57 percent of leases signed were in properties with an attended lobby, one of the highest percentages seen in two years.
Gary Malin, chief operating officer at Corcoran, notes Upper Manhattan saw the largest annual rise in rental transactions during January. "This increased activity was driven by apartment seekers in search of value. Despite the competitive conditions, there are still opportunities for price-conscious tenants,” he says.
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