Rent continued to soar to new records in Manhattan, New York’s most famous district; last month.
The median monthly rent paid by a tenant for a condo or co-op in Manhattan rose to $4,050 in June, nearly 25% higher than a year ago and setting a new record for the fifth straight month, according to a report by broker Douglas Elliman. and Miller Samuel.
The average monthly rent – which is the sum of all rentals divided by the number of rentals included in the data – was even higher, at $5,058 in June. This represents an increase of nearly 30% over the previous year and marked the first time the average has surpassed $5,000 per month.
The price increase was caused, in part, by prospective homebuyers who decided to put their search on hold and opt to rent, said Jonathan Miller, president and CEO of Miller Samuel.
“You have more people switching plans, they were thinking about buying a property, but now with mortgage rates going up, they’re in the rental market,” Miller said. “The market is already tight.”
These tenants typically have more money to spend and often need a larger, more expensive family apartment, bringing the average up.
The median rental price for a three-bedroom apartment in June was $9,469 a month, up from $7,394 a year ago. Meanwhile, the median rental price for a one-bedroom property was still under $5,000, up from $4,278, up from $3,475 a year ago.
Little relief is expected for lessees in the short term, Miller said. “New rental activity in Manhattan doesn’t peak until late in the summer,” Miller said. “Barring a recession, we expect a seasonal increase in demand, putting more pressure on rents.”
Average rental prices have more than recouped losses seen during the pandemic, according to Miller, with average June rents up 14% from June 2019.
New leases grew month-on-month in June for the fifth consecutive month and the vacancy rate remained below 2% for the seventh consecutive month. A year ago, the vacancy rate was close to 7%.
The concessions that landlords offered to renters to rent apartments in New York when the market was in a slump during the pandemic are now scarce, according to the report.
Bidding wars escalated for the fourth month in a row, especially in the luxury market.
How long will prices keep rising?
“Nothing goes up forever, but in the short term we are ready for higher,” Miller said.
Looking ahead to the next few months and the next year, he said there will be an affordability limit that renters will face. But even so, prices are more likely to stabilize than to fall.
Source: CNN Brasil
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