Manhattan rents hover near highs in sign of affordability crunch

[NEW YORK] Manhattan apartment hunters have not gotten much of a break this winter as rents continue to hover close to all-time highs.

The median rent on new leases signed last month was US$4,720, up nearly 9 per cent from the previous December, according to appraiser Miller Samuel and brokerage Douglas Elliman. It was just US$30 less than November’s median, which was the highest in the firms’ records.

New York’s rental market tends to cool around the winter holidays, but competition stayed high throughout last year. Listing inventory dropped 16 per cent in December from a year earlier, the largest annual decline since the pandemic-era leasing frenzy in August 2022.

The persistent demand for leases defies typical market dynamics, according to Jonathan Miller, president of Miller Samuel. Manhattan home sales have been ticking up, which has historically pulled momentum from the rental market.

The fact that both the sales and rental market outperformed in December signals that prices will likely remain high, according to Miller. Tight inventory is a challenging problem to solve in New York, where “it’s tough to build quickly”, he said, so competition will remain intense.

“I’m finding it difficult to come up with a way that affordability will noticeably improve this year,” Miller said. “The best case is to hope for rents to flatten out, but right now they are rising at double the rate of inflation.”

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Renters in the outer boroughs also faced higher prices. The median rent on Brooklyn leases was US$3,850 in December, up 10 per cent from the year prior. Northwest Queens, an area that includes Astoria and Long Island City, saw median rents climb nearly 8 per cent from a year ago to US$3,652. BLOOMBERG