Manhattan apartment hunters face record rents and bidding wars
New leases were signed at a median of US$4,700 in July, up US$75 from June, according to data from appraiser Miller Samuel and brokerage Douglas Elliman. Rents surged 9.3 per cent from a year earlier, the second-biggest annual jump in the firms' data going back to 2008.
It should come as no surprise to New Yorkers that July is one of the year's most competitive months for leasing, when new college graduates flood in and families seek to move before the next school year begins. But the run-up this time has been unprecedented, according to Jonathan Miller, president of Miller Samuel.
'Rent prices have been at record levels for most of this year,' he said. 'I have never seen rents hit records like this before.'
Highlighting how cut-throat apartment searches got last month, the share of leases signed after bidding wars rose to an all-time high of 29 per cent, the firms said.
While rent growth was high across the board, increases were bigger at the lower end. The median for the entry tier, the bottom 30 per cent of the market, soared 14 per cent year over year to US$3,200. Meanwhile, the median for luxury apartments, the top 10 per cent, rose just 5 per cent to US$10,500.
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In buildings without doormen, which tend to be cheaper, rents rose at nearly twice the rate of doorman properties, the firms said.
High mortgage rates are at least partly to blame for the bifurcation. People who can afford to pay cash to buy a home are choosing to go that route, alleviating some of the pressure on higher-end rentals, according to Miller. At the same time, New Yorkers who'd need a mortgage are remaining renters while waiting for borrowing costs to fall.
Another new wrinkle this summer has been a law that took effect in June, barring landlords from imposing broker fees on their new tenants. The law prompted owners to pull listings from apartment-search platforms such as StreetEasy, tightening inventory and increasing competition for units that were publicly available, Miller said.
August is generally even busier than July for Manhattan's rental market, suggesting at least one more record-breaking month, according to Miller. Higher wages are still giving rents room to grow, but a cooling job market and the impact of tariffs could reverse the trend, he said.
In Brooklyn, the median rent on new leases in July rose to US$3,850, the second-highest level on record for the borough, the firms said. The median in northwest Queens, including Astoria and Long Island City, climbed almost 9 per cent from a year earlier to US$3,750. BLOOMBERG
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