Is the rental market going to crash?

David Goldsmith

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Rental Housing Is Suddenly Headed Toward a Hard Landing
While investors were focused on fears of a collapse in the homebuying industry, a crash in the apartment market has been taking shape.

David Goldsmith

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New Yorkers should expect lower rents in 2023, but no big discounts​

What's next for New York apartment dwellers, after rent inflation hit new records in 2022

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The covid-19 pandemic triggered a once-in-a-century shock to New York City’s population. But following an exodus of residents in 2020, demand for apartments returned in 2021, and the buildup of apartment inventory that the pandemic created was erased by 2022.
As a result, rents in Manhattan rose to record highs last year, which only increased demand in boroughs with more affordable apartments like Queens, the Bronx, and Staten Island.

Where might New York City rents go in 2023? We asked Kenny Lee, an economist at StreetEasy, the go-to site for real estate listings in the city. The following interview has been lightly edited for length and clarity:

Quartz: Are rents in New York City higher because demand is normalizing or because we’re not building enough supply?​

Lee: It’s a bit of both. New York has always been very expensive. About a third of New York renters are already spending more than half their income just on rent, and that data was as of 2021. With a rapid increase in rents this year, rising 21% from 2021, that number is probably already higher.
There seems to be a growing momentum, at least between city and state officials, to really find a way to really increase the supply of housing, through regulatory changes, and also tweaking zoning laws that can make diversifying Manhattan’s commercial districts possible.
[In 2022,] we identified that 69,000 permits for housing units were issued by the city. That’s a record. It’s more than 25 times the number of housing units that got permission from the city in 2021 as developers really rushed to qualify for the tax exemptions that expired a few months ago.

New York is also getting stricter rules for short-term Airbnb rentals, which will probably shrink the number of Airbnbs by 10,000. Do you have an idea of how close that might get us to a vacancy rate that looks more like 2019 levels?​

I think the exact number of short-term rentals tend to vary. What I can say is that the conversation on this is really intensifying, because of the affordability problem. A lot of renters out there already have been squeezed to their limits.

What does the inventory of New York City apartments look like now?​

Inventory reached its pandemic peak in August 2020. From that point, inventory is down 66% as of December 2022. That means renters used to have three times the options in 2020 compared to now.

What other changes are going to affect inventory this year?​

First of all, the rental market is inevitably linked to the sales market. There are a lot of priced-out buyers out there who are stuck with their rental units. With elevated mortgage rates, it’s more expensive for buyers to stay in the market, and for that reason buyers are reducing the number of available rental units.
Higher mortgages rates are also affecting sellers. Some of the sellers may transition into renting out their units instead of selling, but it remains to be seen how many of them actually convert their homes into rentals. My understanding is that there aren’t many owners out there who already have a second home and can rent out their own home.

We’re also in a different world after the pandemic. A lot of New Yorkers are paying up to avoid having roommates, despite record high rent and potential annual savings of $15,000 per person from living with roommates.

So what does all this mean for New York City apartment rents in 2023?

Rents will decline as the rental market continues to normalize in 2023 but renters should not expect deep discounts.

David Goldsmith

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NYC Rental Inventory Rises for the Second Month​


David Goldsmith

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David Goldsmith

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Millionaire renters on the rise in New York City
Wealthy tenants up 170% in the Big Apple from 2015 to 2020: RentCafe

As high prices and high mortgage rates sideline some buyers from the housing market, more high-earning tenants in New York City are deciding homebuying is not worth the hassle.
New York is the hottest rental spot for millionaires, according to a report from RentCafe. There were nearly 2,500 millionaire rental households in the Big Apple in 2020, trouncing other cities by leaps and bounds, including San Francisco in second place with less than 300).

The report analyzed census and survey data from Integrated Public Use Microdata Series from 2015 through 2020 to study rental trends across the nation.
New York City’s rental households accounted for roughly 75 percent of the national total. The amount of millionaire rental households grew by 171 percent from 2015. Other cities to see big spikes in the category over those five years include Los Angeles, San Francisco and Jersey City.

The city also claimed the top spot for number of high-income rental households — defined as those who earn at least $150,000 — with more than 296,000 high-income renters in 2020, more than triple second place Los Angeles.
They only made up 14 percent of the city’s renter population, nowhere near San Francisco’s leading share of 35.6 percent.


David Goldsmith

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Apartment Rents Fall as Crush of New Supply Hits Market

Declines signal tenants may be maxed out on how much income they can devote to rent​

In Seattle, new-lease rents have tumbled 8% since August.PHOTO: JASON REDMOND/REUTERS
By Will Parker

Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.
Renters with new leases in January paid a median rent that was 3.5% lower than they would have paid last August, according to estimates from listing website Apartment List. It was the first time in five years that rent fell every month over a six-month period, according to the same estimates.


David Goldsmith

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U.S. Multifamily Rental Market Suffers Drop in Annual Rent Growth in February Amid Weak Conditions
Oversupply Conditions, Especially in Sun Belt Markets, Expected To Weigh on Rent Growth
Record construction of new multifamily units is causing supply to significantly outpace demand, leading to a glut of available units on the market and downward pressure on rental rates. A total of 14 major U.S. markets are expected to set records for the most amount of new units added in a single year in 2023. (Getty Images)
Record construction of new multifamily units is causing supply to significantly outpace demand, leading to a glut of available units on the market and downward pressure on rental rates. A total of 14 major U.S. markets are expected to set records for the most amount of new units added in a single year in 2023. (Getty Images)
By Jay Lybik
CoStar Analytics

March 23, 2023 | 5:50 P.M.
Weak demand for rental apartments continued in February, resulting in the further deceleration of asking rents. Although rents still increased on average, the pace at which rents increased has slowed considerably. Since the end of 2022, annual rent growth nationally declined by 80 basis points to 2.9%, which is below the five-year pre-pandemic average of 3.2%. This trend is largely driven by the supply of new multifamily units significantly outpacing demand, leading to a glut of available units on the market and downward pressure on rental rates.

David Goldsmith

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Moody's: Multifamily Demand "Softened notably over the past few quarters"​

Apartment Vacancy Rate Increased in Q1​

CalculatedRisk by Bill McBride

13 hr ago

The big story here is that demand for apartments has softened recently, rents are falling in some areas, and there are a large number of apartments currently under construction that are expected to be delivered this year.
From Moody’s Analytics Senior Economist Lu Chen and economist Nick Luettke: Apartment temporarily oversupplied, Office approaching peak of vacancy, and Retail remained flat
The tide has been gradually shifting for the multifamily sector. “Pandemic fever” once fueled by discounted rental price and migration has gradually subdued as rent burden grew while economic growth and household formation slowed. Multifamily demand has softened notably over the past few quarters with net absorption even teasing slightly below zero in the first quarter of 2023. But because net move-outs based on preliminary trend were so small, we would not be surprised if the sign flips when more construction data gets verified and backfilled in the next few weeks. Overall, we remain cautiously optimistic for multifamily demand, given a few inter-playing factors including the cooling of the single-family housing market, resilient labor market, and positive household real income growth. While leasing was weak, construction activities were at a record high. Projects started in 2021 and early 2022, when rent growth has high and the cost of borrowing low, are expected to complete this year and next. First quarter delivery, however, was sluggish as elevated borrowing costs and a slight uptick of supply chain stress delayed construction timelines. Vacancy ticked up 13 basis-point (bps) to end Q1 at 4.71%. This was the biggest jump over the past two years, which pushed the current vacancy over the pre-pandemic level of 4.68%.
Compared to year end 2022, rent declines became more widespread in the first quarter, with 60 primary metros recording negative market rent growth ranging from -0.1% to -6.4%. At the national level, asking/effective rent declined by 1%/0.9% respectively, which not only helped level off renters’ rent burden, but also will work its way through taming shelter inflation in the headline CPI. On a year-over-year basis, both asking and effective rent growth slowed from over 17% in Q2 2022 to just around 6% in this quarter.
emphasis added
Moody’s Analytics (Reis) reported that the apartment vacancy rate was at 4.7% in Q1 2023, up from 4.6% in Q4 2022, and down from a pandemic peak of 5.4% in both Q1 and Q2 2021.
This graph shows the apartment vacancy rate starting in 1980. (Annual rate before 1999, quarterly starting in 1999). Note: Moody’s Analytics is just for large cities.

Reis also reported the effective rents declined 0.9% in Q1 compared to Q4, and up 6.0% year-over-year. Effective rents declined significantly in the early stages of the pandemic, and rents are up 6.0% annualized over the last 3 years.

US Metros​

From Moody’s Analytics:
Multifamily vacancies rose in nearly half (37 of 79) of primary metropolitan areas, up slightly from 35 the previous quarter. Fort Worth (+90 bps), Nashville (+90 bps), and Tucson (+0.8 bps) topped the list due to weak demand. All three metros also saw asking and effective rents decline by more than a percentage point in Q1.
More than 1,000 multifamily units were delivered in Austin (1,512), Phoenix (1418), Nashville (1,275), Tampa-St. Petersburg (1,100), and Atlanta (1,017). Only one metro delivered over 1,000 units in Q4 comparatively. Among these five metros, the increased supply contributed to less than 100 bps uptick in vacancies.
Multifamily effective rents fell in 76% (60 of 79) of all markets. Fairfield County (-6.4%), Louisville (-3.6%), Greensboro/Winston-Salem (-3.3%), Syracuse (-2.8%), and Raleigh-Durham (-2.8%) were the markets observing the largest decline. Among those metros, 30 metros declined by at least 100 bps with 14 of them declining by over 200 bps.
We are seeing rents decline in some areas as more supply comes on the market. This should increase throughout 2023.
Apartment vacancy data courtesy of Moody's Analytics.

David Goldsmith

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Manhattan Apartment Rents Hit New Record High As Bidding Wars Intensify​

While multifamily rent growth is slowing nationwide, its biggest city is continuing to break new records.

The median rent for a Manhattan apartment was $4,124 in March, the highest on record, according to a the latest report from Douglas Elliman and Miller Samuel. March saw median effective rents — factoring in landlord concessions — rise 2% over February and more than 13% from the previous year.

Median effective rents in Brooklyn hit $3,459, up nearly 4% from February and 17% from the year before, while Queens rents were up 1.4% and 15.5%, respectively. The reversal of the pandemic’s outward-bound migration and mortgage rate increases driving high prices and bidding wars for rental apartments are keeping the city's rents elevated, Miller Samuel President Jonathan Miller told Bisnow.

“The rental market is certainly working against affordability,” Miller said. “The spike in mortgage rates have made rents less affordable, because it's pushed more people into the rental market.”

New lease signings in Manhattan last month were the second-highest on record as more inventory entered the market for the fifth consecutive month. With listing inventory rising from 4,532 units in March 2022 to 6,366 last month, vacancy ticked up from 1.9% a year ago to a still-paltry 2.5%.

“Even with the surge in inventory, there's still an imbalance between supply and demand,” Miller said, adding that renters are paying an average of 9% and 12% above the asking price in Manhattan and Brooklyn, respectively. “It's a tight market.”

The number of new leases being signed is partially related to new rental units coming online, Miller said, but it’s also one of the ripple effects of Signature Bank and Silicon Valley Bank’s failures and the Fed’s interest rate hikes keeping would-be homebuyers from signing up for mortgages and in the rental market.

With competition heating up, more and more renters resorted to bidding wars in March. Bidding wars accounted for 16% of lease signings in Manhattan, 20.2% in Queens and 24.9% in Brooklyn.

The market's relentless upward rise is pushing an increasing number of renters to sign two-year leases. The share of two-year deals jumped to its highest level since its June 2021 peak in Manhattan, reaching 56.3%. In Brooklyn and Queens, two-year leases accounted for 72.2% and 86.2% of signings, respectively.

“Consumers want to lock into a longer period because they expect rents to continue to rise,” Miller said. “With the spike in mortgage rates, I think many consumers anticipate rents will remain higher, at least over the near term.”

The current market dynamics — increased competition for apartments resulting in high prices, coupled with low inventory levels — will likely add to the risk of displacement for many of New York City’s lower earners, Miller said.

"The spike in mortgage rates have made rents less affordable, because it's pushed more people into the rental market," he said. "Open market rents are clearly working against affordability."

New York is somewhat of an outlier among multifamily markets nationwide, which largely have seen rent growth slow or turn negative since late 2022. Nationwide, multifamily rents were up 2.6% year-over-year in March, the slowest rate of growth since April 2021, according to Apartment List.

Manhattan's rent growth can also be attributed to its population. While the borough saw a 6.2% decline in net migration in 2021, it regained population last year, according to U.S. Census Bureau data reported by JLL.

David Goldsmith

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Manhattan, Brooklyn and Queens rents set records in March​

A blip, or the start of a new climb?

Just as Manhattan trees budded a full month early, the busy spring rental market arrived ahead of schedule, too, driving rents to top last summer’s all-time high.
Typically, New York prices pop in May when tenants seize on nicer weather to move. But the seasonal lift hit Manhattan’s rental market in March, driving the median monthly charge to a record $4,175, according to a report by the appraiser Jonathan Miller for Douglas Elliman.

New lease signings surged 21 percent from February levels to notch the second-highest number on record for March.
“Seasonally, we are entering the spring market, which peaks in the summer,” Miller said.

The borough’s median rent last month bested the previous high of $4,150, set in July. The jump also marked the first acceleration of year-over-year growth since November.
Manhattan rents in March stood nearly 13 percent above where they were last year. In February, annual growth was about 11 percent.
Miller has characterized Manhattan rents as moving sideways since cresting last summer. Despite March’s fresh high, the appraiser said he is not ready to say that trend is at an end.

“It is too soon to call a departure from that, but it is confirmation that rents have been flirting with new highs since the summer and periodically we see a month where rents break through,” Miller said.

Apart from the seasonal surge in demand, Miller said, continued high costs in the for-sale and mortgage markets contributed to last month’s rent growth.
Mortgage rates have discouraged would-be homebuyers, particularly first-timers; the average 30-year fixed rate Wednesday was 6.8 percent. Economic uncertainty has also led people to delay big financial commitments such as buying a home.
The trends have prompted more renters to stay put, squeezing the supply of apartments and sustaining near-record prices.
Across the East River, rents showed a similar pattern, jumping 2.7 percent in Brooklyn month-over-month to a record $3,493 in March as the number of new lease signings surged 37 percent, also hitting a new high.
Queens’ median rent rose to $3,300, the second highest on record, and the number of new leases signed was an all-time high for the month of March.

David Goldsmith

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April rents smash records in Manhattan, Brooklyn, Queens​

Manhattan’s median rent topped out at $4,241

Record-smashing rents reigned in New York City last month.
April prices upped the ante immediately after the Manhattan median rent in March topped last summer’s high. The borough’s median rent broke a fresh record at $4,241, according to a report by the appraiser Jonathan Miller for Douglas Elliman.

Leases with concessions weren’t any cheaper. The median net effective rent on those deals was a record $4,205 as landlords extended the fewest months of free rent since November 2019.
Brooklyn and Northwest Queens — the other city markets covered by the report — also notched all-time highs.

In Kings County the median rent hit $3,500 as the net effective rent rose to $3,473. Northwest Queens saw those metrics peak at $3,525 and $3,484, respectively.
Despite those staggering numbers, the pace of the city’s growth has continued to slow year-over-year.

Last month, Manhattan prices were 8 percent higher than a year earlier — the first single-digit increase since September 2021. By contrast, annual rent growth peaked at nearly 32 percent last April as pandemic discounts were reversed.
Month-over-month rent growth has hovered around 2 percent since peaking last July. In April, rents rose 1.6 percent from March, a slower rate than the 1.9 percent rise from February to March.

Miller has characterized this as rents moving sideways: Prices may edge up to a record high in any given month, but have effectively plateaued for more than half a year.
The rise in rents comes as state legislators rejected a plan by the governor to increase housing supply in the city by setting growth targets, incentivizing office conversions, extending a tax break for rental development, and allowing the city to raise its residential density cap and to legalize basement dwellings.


David Goldsmith

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New York City rents notch third straight record​

As Manhattan market tightened, tenants locked in longer leases

As fears around the spring bank collapses eased, tenants scrambled to sign new leases, driving Manhattan rents to yet another record.
But a closer look at leasing patterns reveals many city renters still fear inflation and a recession.

Manhattan’s median rent notched a new high for the third straight month in May, hitting $4,395, according to a report by the appraiser Jonathan Miller for Douglas Elliman.
Leases with concessions also bested last month’s record, with the median reaching $4,360.

Brooklyn and Northwest Queens saw their median rent jump to the highest and second highest on record, respectively, at $3,550 and $3,402.
Those jumps came as tenants inked a staggering number of new leases.
In April, the banking crisis had stayed the pens of Manhattan renters, dragging new signings down 20 percent from March, but May erased that decline as leasing surged 30 percent.
“New leasings rebounded sharply in May due to the idea that the banking crisis seems to have passed — whether it actually has or not,” appraiser and report author Jonathan Miller said.

Renters still hedged against inflation, which has been stubborn.

The rent for non-doorman buildings jumped 9.1 percent year-over-year, overtaking the 4.3 percent gains seen at doorman buildings, which typically lease at a higher price point.
The differential signals that renters continue to turn to more affordable units as inflationary pressures persist.
The consumer price index ticked down to 4.9 percent in April, a far cry from last year’s high of 9.1 percent in June. Still, inflation remains above the Federal Reserve’s target rate of 2 percent, creating an expectation of interest rate hikes that cool the economy.
Even luxury leaseholders attempted to insulate themselves from inflation and the threat that a late-year recession could spur layoffs.
Luxury listing inventory fell year-over-year for the first time since last summer. And luxury tenants extended lease terms by the longest stretch since the beginning of 2022.

“Inflation continues to be a challenge and people are locking in even at the high end because the general view is that rents may continue to rise,” Miller said.


David Goldsmith

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Queens takes over as NYC’s most competitive rental market​

Low inventory, record prices in Manhattan, Brooklyn drive renters to borough: StreetEasy
Queens has risen in New York City’s frenzied rental market to be crowned the the city’s most competitive, according to StreetEasy.
Asking rent in the borough rose 12 percent year-over-year, outpacing the city-wide average of 10.7 percent, according to a monthly report from the listings giant. The borough’s median monthly rent climbed to $2,800 in May, setting a record for the second consecutive month.

“Despite concerns over affordability, the city’s strong labor market is supporting demand for rentals,” StreetEasy found. “Competition among renters is fierce, albeit not as tough as during the market’s peak last summer.”
Demand in Queens is up because renters are flocking to the borough to escape higher prices in Manhattan and Brooklyn, even though inventory in Queens is a fraction of what it is in the neighboring boroughs.

Rents are rising the fastest in Astoria, where the median asking rent rose to $2,750, a 10 percent annual increase. But the highest rents in the borough are in Long Island City, where the median rent in May surpassed $4,200 per month, 52 percent above the borough median. The area has seen a number of new development projects in recent years.
There is a silver lining for renters: The hot market has led to more owners renting their homes out instead of selling them, which is driving an increase in inventory. Rental inventory has seen double-digit growth since January, though it’s still down nearly a quarter from pre-pandemic levels.
“While it’s unlikely that asking rents will drop compared to last year, year-over-year rent growth will likely continue to slow this year,” StreetEasy said in its report.


David Goldsmith

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NYC rents shatter yet another record — with no signs of slowing down
What’s more, Jersey City is now the nation’s second-priciest rental market

Rents keep soaring in and around New York City, and they’re showing no signs of coming back to earth any time soon.
The median asking rent for a one-bedroom apartment in the five boroughs hit a record $3,900 this month, according to rental marketplace Zumper’s latest report, up 3.2 percent from May and 8.8 percent year-over-year. Two-bedroom units followed a similar trend, climbing to $4,240, up 6 percent from last month and 7.3 percent from the same period last year.

The spikes are even more dramatic on the other side of the Hudson. The median rent for a one-bedroom apartment in Jersey City is now $3,370, an annual increase of 29 percent and the second-priciest of all 100 cities tracked by Zumper, surpassing San Francisco and Miami. For two-bedrooms, the city’s median asking rent stands at $3,960, a whopping 45 percent year-over-year hike.
Those gains stand in contrast to most markets included in the report. Nationally, the median asking rent for a one-bedroom unit is $1,504, consistent with May and up 5.8 percent year over year, the smallest annual hike since 2021. Median rents in 46 of the top 100 cities declined from May to June, while 42 cities saw increases and the remaining 12 were flat month-over-month.

“This deceleration is, generally, good news for renters, but it does come with caveats,” Zumper CEO Anthemos Georgiades said in a statement. “Many cities are still stabilizing after long periods of sharp increases during the pandemic’s Great Migration, and though rents are softening, they’re still at record highs in many markets.”
Prices are poised to keep rising in the tri-state area as net migration to New York rebounds, recently approved price hikes for rent-stabilized units take effect and the expiry of the 421a tax break limits supply.
Other markets that saw the largest rent increases this month include Memphis (up 6.4 percent), Fresno, California ( 6.3 percent) and New Haven, Connecticut (6.3 percent). Others such as Tallahassee, Austin and Tulsa saw an unexpected cooldown given the busy summer season, according to Zumper’s analysis. Across the country, multifamily construction starts last year reached their highest level since 1986, but high interest rates and hesitant investors may curb some of that additional inventory.


David Goldsmith

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Staff member

NY rents cooled slightly in June. But a heat wave is coming​

After three straight months of record prices, rents last month fell 2 percent

After three straight months of smashing records, Manhattan rents took a breather in June.

The borough’s median rent slipped 2.2 percent month over month, landing at $4,300, according to a report by the appraiser Jonathan Miller for Douglas Elliman.
New York’s net effective median rent — the price on units with concessions — also dipped, falling 2.1 percent to settle at $4,268.

But those downticks don’t signal the start of a trend, Miller said. Instead, the appraiser described it as “a blip.”
Summer is historically the busiest rental season and strong demand coupled with limited supply will likely push prices higher over the coming months.
Renters signed 2.5 percent more leases in June than May, and Manhattan’s vacancy rate remained under 3 percent for the month, signaling leasing activity is still strong.

“I think it’s possible to see an increase or record set in one or both of the next two months,” Miller said, referring to rental prices in July and August.

Prices in Brooklyn and Queens showed no sign of a slowdown. The median rent in Kings County topped previous highs for the third consecutive month and reached just above $3,550. Northwest Queens prices also notched a new record with a median rent of about $3,575.
Those relentless gains could level off come fall, Miller said. But that hinges on the Federal Reserve’s appetite for another rate pause.
Economists have penciled in another hike at the Fed’s July meeting, an increase that will likely push mortgage rates higher and sideline another slice of prospective homeowners. Some of those would-be buyers will remain renters, stoking demand that could further boost rents.
But experts project the Fed could hold rates steady through the remainder of the year, according to Bankrate.
“That may keep rents stable in the fall as fewer would-be homebuyers are pushed into the rental market,” Miller said.


David Goldsmith

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The rent may finally be too damn high​

New lease signings slipped in a month that typically sees peak demand

New York rents smashed records for the fourth time in five months in July, pushing the median price for a Manhattan apartment to $4,400. Brooklyn and Queens followed suit with prices notching new highs at $3,950 and $3,641, respectively.
But amid those headline figures, leasing demand — typically the strongest in the summer — waned last month, according to a report by appraisal firm Miller Samuel on behalf of Douglas Elliman.

That pullback signals some tenants can no longer stomach New York’s astronomical cost of living, a trend that may suppress rent growth in the months to come.
“The growing lack of affordability may be causing prices to top out or come close to it,” report author and appraiser Jonathan Miller said.

Rental demand typically peaks in August as tenants’ summer hunt for new apartments comes to a close. But new lease signings slipped month over month in July in each of the three boroughs that Miller tracks.
The number of new leases signed in Manhattan fell 3.2 percent month-over-month in July. Brooklyn and Queens, where rents run a bit cheaper, saw steeper declines — 27.3 percent and 47 percent, respectively — indicating tenants with less to spend are snubbing new leases at a higher rate.

Those renters are likely opting to re-up their current leases and spare themselves the premium prices and moving costs that come with a new apartment.

“I suspect they are being retained through renewal efforts more aggressively than before,” Miller said.
Another sign rents are at or near their peak: the rapid pace of annual growth has continued to slow.
Manhattan’s median rent last month rose 6 percent over prices posted last July, the smallest annual increase the borough has seen since September 2021.

Despite that slowdown, rent growth has yet to return to pre-pandemic levels, another sign that the pace of gains has further to fall.

New York’s median rent jumped 2.3 percent in July versus the previous month. Over the past decade, the monthly rental growth rate was 0.6 percent, Miller said, “far less than what we are seeing now.”


David Goldsmith

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Staff member

City sees record rents across the board once again in July​

Rents across the city reached record highs once again last month, putting a quick end to the slight respite Manhattan renters saw in June.
The median Manhattan rent was $4,400 in July, up 2.3% from June and 6% from July 2022, according to the latest report from Douglas Elliman and Miller Samuel. The net effective median rent was essentially the same, at $4,369, indicating landlords do not see the need to offer steep concessions to attract tenants.
Tenants signed 4,999 new leases for the month, down from 5,165 in June and 5,318 in July of last year, while the vacancy rate was about 2.6%, down from 2.8% in June but up from 2.1% year over year.

Listing inventory increased month over month and year over year in Manhattan even as new lease signings went down, indicating that high prices are having a bigger impact than too few apartments on slowing down activity, said Miller Samuel CEO and report author Jonathan Miller.

"What we're seeing is record prices, but it's not being caused by the lack of supply like the purchase market," he said. "I think it infers we've entered, or we're entering, an affordability threshold where consumers are being challenged much more significantly."
But Miller does not expect this to lead to significantly lower rents, especially given the continued strength of the labor market. Rather, rents will likely "hover at an elevated level" with nothing more than slight increases or decreases, he said.
In Brooklyn, the median and net effective median rents set records for the fourth month in a row, at $3,950 and $3,916, respectively. The median rent jumped 11% from June and 16.2% year over year, and about 1 in 5 new lease signings saw a bidding war, according to the report.
Lease signings in the borough continued to fall. Tenants signed 1,117 new ones in July, a 27.3% drop month over month and a 38.2% drop year over year. This was the third time in four months they dropped year over year.
And in northwest Queens, the median rent hit a record high of $3,641, up 1.9% from June and 15.7% from July 2022, according to the report. The net effective median rent reached a record high of $3,615 as well.
New lease signings saw a sharp decline, dropping to 182, down 47.4% month over month and 52.1% year over year. This was the fourth month in a row they fell year over year.


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David Goldsmith

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NYC rents are through the roof​

Number of new lease signings down for the second consecutive month

New York City continued to smash rental records in August, despite the doldrums in summertime demand.
Typically, the city’s warmer months prove to be a furnace for rental signings, but July and August have proved that isn’t always the case, according to a report by appraisal firm Miller Samuel on behalf of Douglas Elliman.

This year, landlords seem more focused on retaining their tenants than bringing new ones in, signaling that the city has tapped its high water mark for affordability.
“The decline in new leases suggests that tenants are hitting some kind of affordability threshold,” report author and appraiser Jonathan Miller told The Real Deal.

And if new leases are low, renewals must be high, Miller noted.
Renewal data isn’t publicly available information in New York but comprise two thirds of the city’s rental market and is the bread and butter of a landlord’s business.
“Leases are not expanding. This means that renewals are expanding, which means that landlords are aggressively courting tenants, [so] tenants and landlords see that we’re not going to see rapidly rising rents in the near term,” Miller said.
Another confirmation of that is a recent surge in one-year lease signings when compared to two-year lease signings. Since June, one year leases have skyrocketed from their typical share of half the market to just shy of 70 percent in July, hinting that tenants don’t want to be locked into their current deals for too long.
But that doesn’t mean rents will come down, Miller said, noting that the opposite of rising rents isn’t falling rents but rather stabilized prices.

While the median price for a Manhattan apartment last month saw no change in August, sticking at $4,400, the number of new leases remained low, with just 5,025 new rental contracts across the borough — a 14 percent decrease from August 2022, according to the report.
Over in Brooklyn, the median price for a unit fetched $3,850, making it the second highest month for rents on record, though just 1,280 new leases were put on the market, less than 40 percent of what the borough was leveraging last year. August marks the fourth time in five months that the borough has seen new lease signings decline.
Rents continued to smash records in Northwest Queens, where the median apartment price leapt to $3,900, an increase of more than 7 percent from July when prices hit $3,641. The World’s Borough saw a slight increase in new leases, though numbers were still small with just 233 new units available — a 46 percent decrease in volume from 2022.
Overall, the three boroughs that Miller tracks saw a huge jump from 2022 prices — in Queens, those figures rose by as much as 27 percent.

In Manhattan, new developments saw the most action when it came to new lease signings, while signings at existing buildings “fell sharply,” the report noted.
“Developers have the ability to negotiate, they have more marketing power,” Miller said. “That doesn’t just apply to new rentals, it can be a new condo, too, where the unsold units are being rented out.”