NYC renters caught a break as median rents slipped in August
- Median rent fell 3.5 percent in Manhattan and 5.2 percent in Brooklyn last month
- A surge in new listings is largely the result of would-be buyers exiting rentals
Manhattan median rent has dropped three times out of the last four months, said Jonathan Miller of Miller Samuel.
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New York City median rents slipped in August as listings surged, bringing renters signing leases for new apartments a small amount of relief.
Manhattan median rent dropped 3.5 percent to $4,245 compared to August 2023, while inventory increased 96.3 percent, according to the latest version of the Elliman Report. New leases for Manhattan rentals jumped 63.6 percent annually, the report said.
Manhattan median rent has been trending downward; it has dropped three times year over year out of the last four months, said Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report.
Listings more than doubled in August compared to a year ago, which meant renters could be more selective, and that put pressure on landlords to offer more competitive rents.
The surge last month in rental inventory is tied to what’s going on in the sales market.
Sliding mortgage rates—they’ve fallen for six, consecutive weeks—are spurring sidelined buyers, who have been parked in the rental market for nearly two years, to finally make a move. New signed contracts for Manhattan and Brooklyn co-ops and condos jumped in July and August, according to a different edition of the Elliman Report. New signed contracts for Manhattan condos, for example, were up 42.4 percent in August.
With the Federal Reserve is expected to make a quarter-percentage-point rate cut next week and an additional cut by the end of the year, NYC buyers anticipate there will be more competition in the sales market and higher prices as a result, Miller said.
Breathing room for renters
Exiting buyers are taking some of the pressure out of the rental market.
“Would-be buyers have been tipping the balance,” Miller said. He expects rents to continue to dip in the months to come. However, “rents are not going anywhere near as low as they were during the pandemic, which was a historic anomaly.”
In the months to come renters “will see some relief, but not a significant amount,” Miller said. After all, Manhattan median rent is not far from the $4,400 record reached in both July and August last summer. “But at this point any tenant is happy with anything in their favor,” he added.
Small adjustments in asking rent seems to have made a big impact on demand, said Gary Malin, chief operating officer at The Corcoran Group, which also released August rental market reports for Manhattan and Brooklyn.
“August was remarkably busy,” Malin said. “While many tenants still likely experience a sense of sticker shock with current New York rents, the good news is that last month brought them some relief, albeit slight.”
Leases surge in Brooklyn
In Brooklyn, new lease signings surged to a new high for the second time, according to the Elliman Report, increasing a whopping 282.4 percent over August 2023.
Median rent slipped year over year for the second time, dropping 5.2 percent to $3,650 as listing inventory rose for the seventh time with an increase of 279.2 percent.
Also of note: Days on market in both August and July was a mere 20—only one day more than the record set in August 2023 of 19 days.
Median rent slips in Queens
In the northwest section of Queens covered by the Elliman Report, median rent slipped year over year by 9.2 percent to $3,541, which was still the third highest on record.
New lease signings surged year over year to the second highest on record, an increase of 272.5 percent. New listings were up year over year for the seventh time, rising from 168 in August 2023 to 1,082.
Rising unemployment cools demand
StreetEasy also released its August rental market report, which predicts cooling demand for rentals, due in part to the city’s slowing labor market.
Unemployment rate in the NYC area has been gradually rising, the report said, referring to U.S. Bureau of Labor Statistics data.
“The slower pace of hiring, especially in high-income industries such as finance and professional services, will continue to soften rental demand,” StreetEasy’s analyst noted.
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