Manhattan rents hit another record high in May and are not expected to ease up any time soon, according to a monthly report released Thursday from Douglas Elliman, a brokerage, and Miller Samuel, an appraisal and consultant firm.
While rents are cooling in some parts of the United States, the cost to rent a Manhattan apartment hit a record high in May for the third month in a row.
The median cost of renting an apartment in Manhattan was $4,395 in May. That’s up 10% from a year ago and up 3.6% from April, when rents were at a record high of $4,241. The average rent for all apartments in May was $5,379.
Over the past 18 months, rents have been consistently near or breaking record highs in Manhattan, said Jonathan Miller, president and CEO of Miller Samuel.
“From the beginning of 2022 when we were just beginning to think about whether the Federal Reserve was going to do something with rates and the purchase market slowing down, there has been upward pressure put on rents in Manhattan,” Miller said.
A one-bedroom apartment had a median rent of $4,275 in May, up 7% from last year, while a two-bedroom apartment had a median rent of $5,400, up 8% from a year ago. A studio apartment rents for a median price of $3,200, up 7.6% from last year.
Not only are median rental prices going up, but the share of new leases with concessions — or incentives offered by landlords — is dropping. Only 11.7% of new leases came with concessions, compared with 12.9% last month and 15.3% a year ago.
Inventory is up 21% from last year, but it is still below the average inventory levels over the past decade.
“Rents are rising, but inventory is still lower than average in the long term,” Miller said. The upside of increasing inventory, he said, is that once the seasonal peak passes and demand begins to cool, that extra inventory may help keep prices from rising more in the fall.
But rents falling? Not likely, said Miller.
“The only thing I can see that would take the pressure off rents and create a meaningful decline is a recession,” said Miller. “They’ve been forecasting a recession for the past two years. But until an adverse economic event occurs, it is hard to imagine a meaningful drop in rents.”
Rents were also at or near record highs in the boroughs of Brooklyn and Queens last month, according to the report.
Brooklyn hit a record high median rent for the second straight month, with the median price for all apartments at $3,550, up 1.4% from April and up 9.2% from a year ago.
In Queens, May’s median rent of $3,402 was the second highest on record, up 15.3% from a year ago.
For those looking for an apartment in New York City, expect more record high rents ahead.
Typically, rental activity builds from the spring to a peak in late summer, and prices are expected to reach more highs before September, Miller said.
“May is the middle of peak rental season,” he said. “With heavy new leasing activity, it seems reasonable to expect a few more months of records.”
