Manhattan apartment rents drop even as leasing activity picks up - Hindustan Times
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Manhattan apartment rents drop even as leasing activity picks up

Bloomberg |
Jun 13, 2024 10:47 AM IST

Manhattan apartment rents unexpectedly slipped in May, a “sideways” move for the market at the start of one of its typically busiest seasons.

(Bloomberg) -- Manhattan apartment rents unexpectedly slipped in May, a “sideways” move for the market at the start of one of its typically busiest seasons.

Manhattan apartment rents unexpectedly slipped in May, a “sideways” move for the market at the start of one of its typically busiest seasons. (Representational photo)(Pixabay)
Manhattan apartment rents unexpectedly slipped in May, a “sideways” move for the market at the start of one of its typically busiest seasons. (Representational photo)(Pixabay)

New leases were signed at a median of $4,250 last month, a 3.3% decline from a year earlier, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Still, rents were at the second-highest level on record for May, and unchanged from the previous month.

Rents typically rise through the spring as the market gets more competitive heading into the peak months of July and August. But last month’s performance extends the pattern that’s been playing out since late 2023, as rents have hovered below the record high of $4,400.

“Prices are moving sideways,” said Jonathan Miller, president of Miller Samuel. “Where there is growth or decline, it’s nominal.”

Also Read: Manhattan apartment rents climb to highest on record for April

The market has become busier though. In May, 7,085 new leases were signed in Manhattan, nearly 41% more than a year earlier. But listing inventory also climbed, with the roughly 28% increase helping to keep a lid on prices.

Are landlords demanding renewal prices that are too high for their existing tenants?

Miller said he thinks leasing is up in part because landlords are demanding renewal prices that are too high for their existing tenants, pushing those renters into the market. And with mortgage rates hovering near 7% in May, some would-be buyers instead choose to rent, he said.

Unless the Federal Reserve cuts interest rates sooner than expected, Miller anticipates the current dynamics of the Manhattan rental market to continue through the summer, with rents ending up slightly higher as students, recent graduates, families and others vie to secure an apartment by early September.

Also Read: Living large in a shoebox! Is it worth living in New York's tiniest apartment or size does matter?

“I’m not anticipating runaway rents, but I don’t see them correcting much either,” he said.

Brooklyn’s market activity picked up, with the 4,341 lease signings in May reflecting a nearly 161% gain from a year earlier and a record high. The median rent on new leases in the borough was $3,600, the highest on record for May.

Also Read: Office buildings in Mumbai’s Bandra Kurla Complex command higher prices than Manhattan

Leasing also reached a record in the section of Queens that includes Long Island City and Astoria, with 811 new signings in May, up 113% from a year earlier. Median rents fell 0.1% to $3,400.

©2024 Bloomberg L.P.

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