While rents are cooling in some parts of the United States, the cost to rent a Manhattan apartment hit a record high for the second month in a row.
Typically, rental activity builds from the spring to a peak in late summer, but median rent last month was the highest on record, according to a report from Douglas Elliman, a brokerage, and Miller Samuel, an appraisal and consultant firm.
The median cost of renting an apartment in Manhattan was $4,241 in April. That’s up 8% from a year ago and up 1.6% from March, when rents hit a record high of $4,175.
A one-bedroom apartment had a median rent of $4,200, up 5% from last year; while a two-bedroom apartment had a median rent of $5,500, up 11% from a year ago. A studio apartment rents for a median price of $3,235, up 13.5% from last year.
The Manhattan rental market is continuing to trend slightly better than sideways, said Jonathan Miller, president and CEO of Miller Samuel.
Not only are median rental prices going up, but the amount of concessions — or incentives offered by landlords — are dropping. In April, concessions paid by landlords fell to their lowest level since November 2019.
Listing inventory in Manhattan expanded annually, but remained more than 10% below the decade average for April.
But the data suggests that more renters are opting to stay put, given rental prices, with the number of new leases dropping sharply. New leases of apartments were down 20% from March and down 14% from a year ago.
“The drop in new leases indicates that there is a sharp increase in lease renewals,” said Miller. “It means the tenant consumer has accepted that we’re not going to see any improvement in affordability in the near term. They are signing renewals instead of testing the market trying to find better opportunities.”
Many renters are looking for when rental prices will actually go down.
“The only real answer to that seems to be a recession,” said Miller. “Economists have been calling for a recession for two years. Given the current state of the market, it doesn’t seem to be anything people are expecting any time soon.”
Miller said more record-high prices are to be expected between now and late summer when lease prices and leasing volume both tend to peak.
“Not necessarily every month, but we could see several more months with record-setting median rental prices,” said Miller. “If we don’t see some economic event that would change that course.”