No slowdown in sight for NYC rental market: 'Still a rocket ship'
Manhattan’s net effective median rent saw quite a leap in April–up 38.7 percent year over year to $3,870, according to the latest Elliman Report.
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New York City renters appear to be stuck clinging to the back of “rocket ship” that shows no signs of slowing down.
In April, Manhattan’s net effective median rent rose year over year to a new high at the fastest rate ever, according to the Elliman Report for the Manhattan, Brooklyn, and Queens rental markets. Manhattan’s net effective median rent of $3,870 in April was up 38.7 percent year over year ($2,975) and 6.2 percent higher over the previous month ($3,644).
“That’s the biggest year-over-year jump on record—the rental market is still a rocket ship," says Jonathan Miller, president and CEO of appraisal firm Miller Samuel and the author of the report. “There were some initial signs of a slowdown in rent growth in the previous month but apparently, it was just a blip.”
Making matters harder for renters is a decline in available listings. According to the report, inventory saw the most significant decline for the month of April on record, falling 77.3 percent compared to April 2021. The vacancy rate has been under 2 percent now for five consecutive months as lease signings (up 6.6 percent over March) vacuum up listings.
Rents for luxury apartments hit new records as well—for example, luxury median rent rose year over year to the second-highest level ($4,600) and bidding wars happened with more than one third of luxury rentals.
But new renters at non-doorman buildings saw rents rise even more. Median rents for non-doorman buildings rose at a higher rate than for doorman rent (a proxy for luxury buildings) over the past two months, according to the report, a rate of 33.3 percent compared to 32.1 percent.
Leasing activity accelerated in April, “erasing much of the available inventory” and the increased demand sent rents soaring, says Gary Malin, COO of Corcoran. In particular, a lack of move-in ready apartments, demand for apartment shares, larger residences, and doorman buildings sent the median rent to a “new all-time high,” Malin says. The Corcoran Group released Manhattan and Brooklyn rental reports for April.
“There is intense demand for housing in New York City—people want to be here. Rising interest rates are putting additional pressure on potential first-time homebuyers, which may cause them to remain tenants in the near term,” he says.
As the traditionally busy season for rental approaches, these adverse conditions mean renters face a “perfect storm,” he adds. “Unless something gives, conditions will likely be fierce for renters in the coming months.”
In Brooklyn, the net effective median rent rose year over year to the third-highest level on record ($2,998), a 14.7 percent increase over April 2021. The share of leases that came with some kind of landlord concessions fell to its second-lowest level (22.4 percent) in four and a half years. In April 2021, 38 percent of new leases came with some kind of concession.
New lease signings reached the second-highest level for the month of April on record (1,566).
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