Manhattan apartment hunters finally get a break with falling rents

MANHATTAN’S rental market softened in September as prices fell from their summer peak and apartment vacancies rose.

The median rent on new leases signed last month was US$4,350, down 1.1 per cent from the record high set in July and sustained in August, according to appraiser Miller Samuel and brokerage Douglas Elliman Real Estate.

Other data points also suggest apartment hunters will find a more accommodating market now than they would have encountered during the higher-demand months of spring and summer. The vacancy rate, at 3.07 per cent, is the highest it is been since August 2021, bringing it back to typical pre-pandemic levels. The number of listings available at the end of September was up roughly 40 per cent from a year earlier.

But tenants hoping for bargains ahead should not get too excited.

“I’m anticipating a weaker rental market going forward,” said Jonathan Miller, president of Miller Samuel, “but only in the sense of moving sideways or modest declines rather than some sort of correction”.

New lease signings were down 1.9 per cent from last September, another hint of a slight cooling.

As competition eased, bidding wars for apartments fell to their lowest level since April 2021, and landlords stepped up incentives to lure new renters. Move-in perks such as free rent or payment of a broker’s fee were offered on almost 12 per cent of new leases in September, the biggest share in five months. Concessions averaged the equivalent of 1.3 months’ rent.

Even with the latest decline, rents were still 8.2 per cent higher than they were a year ago, and 24 per cent more than in September 2019.

“Rents clearly are still high, but you can see some of the momentum coming out of the market,” Miller said.

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Similar dynamics were also at work in Brooklyn and northwest Queens last month, where rents slipped slightly below their recent peaks and leasing slumped.

Brooklyn’s median rent decreased nearly 4 per cent from August to US$3,700, and new leases tumbled 24 per cent from September 2022. In the part of Queens that includes Long Island City and Astoria, the median price was down 9.5 per cent month on month to US$3,528. New leases fell 22 per cent from a year ago. BLOOMBERG