Has Manhattan’s rental market reached its peak? Rents plateaued in August after climbing to record highs this year
Has the Manhattan rental market reached its peak? Rents stabilized in August after rising to record highs this year
- The average rent in Manhattan was unchanged between July and August, but still high
- In Brooklyn, the average rent for a new lease was down, but up in Queens
- August is typically the hottest month for rental properties, but new leases fell
New York City’s red-hot rental market appears to have reached a breaking point, as Manhattan rents plateaued in August after rising to record highs earlier this year.
The average rent remained at a record $4,400 per month — the same as the month before, but still 7.3 percent higher than in August 2022, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
It’s nearly double the average U.S. rent, which is currently $2,094 per month, according to Zillow.
The number of new rental contracts in Manhattan fell by 14 percent compared to last year to just over 5,000. August is normally one of the most competitive months of the year for rental properties as people settle into new homes after the summer and prior to the academic year.
The average rent in Manhattan remained at a record $4,400 per month, which was the same as the month before but still 7.3 percent higher than in August 2022
August is normally one of the most competitive months of the year for rental properties in New York City. Pictured is the facade of an apartment building in New York
Jonathan Miller, chairman of Miller Samuel, which compiles the monthly report, suggested the market could be reaching a “peak.”
“We are still at or near all-time highs, but we continue to see new rental activity decline,” he says. told Bloomberg. He said the decline in rental activity can be attributed to the fact that many tenants are now choosing to renew their leases rather than re-enter the market.
While the market cools, Miller said no drastic price cuts are expected in the near future. “No one expects a rent correction unless there is a serious economic event,” he said.
The average rent for a new lease in Brooklyn fell to $3,850 for the first time since February. While the number of new leases fell again compared to last year, one-bedroom apartments were the hardest hit, down 45 percent since last August.
In Manhattan, the decline in new rental properties affected studio apartments the most and three-bedroom apartments the least
Studio apartments were the least affected, down 30 percent. They also experienced the largest price increase last year, with the median rising from $2,795 to $3,215.
In Manhattan, by contrast, the decline in new rental properties affected studio apartments the most and three-bedroom apartments the least. They were only 4 percent lower than in August 2022.
The average rent in Northwest Queens rose to an all-time high of $3,900. The number of new leases was still down to almost 50 percent compared to last year.
New York’s cooling market comes as developers eye old office buildings in response to the shortage of living spaces.