Manhattan rents soar for third straight month—hitting $5,113 on average

Reprinted from the Crains New York Business, August 2022

Another month, another record.  After blowing past the gasp-inducing $5,000 per month mark in June, Manhattan rents actually pushed higher last month, according to new data from brokerage Douglas Elliman.  Renters who signed new leases in July paid an average rent of $5,113, while the market-rate prices for apartments in other boroughs soared higher too.

Pressure on rents is due in part to people getting scared off from buying apartments because of higher mortgage rates, brokers say. The people have flocked to rentals instead.

The fact that the sales market is slowing was expected to benefit rentals, others added. But inventory has remained tight even as people have pulled out of the sales market, keeping prices elevated. As a result, there has still not been much incentive to leave a rental and buy something instead.

In Manhattan, rents set another record.  The average rent last month, $5,113, was up from $5,058 in June, according to Douglas Elliman.  Meanwhile, the median—a middle-of-the-pack number that avoids being skewed by luxury listings—also showed gains, climbing to $4,150 last month from $4,050 in June.

Even when adjusting for “concessions”—the free rent that developers sometimes offer to fill up new buildings—rents still spiked. The median factoring in concessions was $4,100, up from $3,995 in June.

And renters seem to be snapping up apartments rapidly. Last month apartments rented after an average of 26 days, down from 50 days in June and well below 76 days in July 2021, according to the data.

In Brooklyn, similarly, the average rent last month was $3,883, up from $3,822, while the median climbed to $3,400 from $3,300. The section of Queens closest to Manhattan, which includes Long Island City, recorded similar gains.