The Corcoran Report on Manhattan’s rental market for August sent eyebrows sky-high, setting Gotham apart from a bottom-line decline in the top 40 largest markets, according to Forbes. While overall national rents in August didn’t hit a new record-high for the first time in nine months, median prices in Manhattan reached the highest on record, displaying a 38% increase over August 2021.
August’s figures marked 12 consecutive months with year-over-year price gains across all unit types. Since February, 2022, Manhattan rents have reached new highs every month, according to the Douglas Elliman market report. Pricier rentals at the high end -- meaning pads that rent for $5K or more per month, at least five blocks from the subway-- placed the average city rental at $5,246 in August, a 2.6% increase from $5,113 in July. This represents a 28.1% jump above the $4,094 average recorded in August 2021.
Topping the chart: leases in the Financial District and Battery Park City spiked by 55%, rents on the Upper East Side jumped 46%, and Gramercy showed the fewest vacancies at 0.6%, YoY.
While rentals in the Sunbelt -- Austin, Phoenix, Las Vegas, Charlotte, Fort Lauderdale, and Orlando -- may exhibit the beginning a national cooling trend according to Business Wire, Manhattan rents showed price increases across all bedroom types and neighborhoods according to Corcoran. Predictably, other coastal areas also continue to hold the high ground in terms of being the least affordable area-codes in the USA: Miami, Los Angeles, and San Diego, according to Realtor.com.
Incomes are growing at a slower pace than inflation, and this pairs with an inventory shortage that applies pressure to renters in the nation’s most desirable market. The Corcoran Report notes that available units in Manhattan fell 26% versus 2021, marking a full year of double-digit annual declines, although August’s decline is the smallest since July 2021.
Average rent prices increased in every Manhattan neighborhood, with seven neighborhoods hitting record highs in response to renters gravitating downtown and toward employment in lower Manhattan. While rents soar, 10 of 13 neighborhoods experienced decreases in signed leases.
COVID discounts formerly used to attract tenants into neighborhoods including the West Village have now expired, at the same time that more affluent New Yorkers have returned to the rental market. According to City Limits.
What makes a Manhattan apartment so difficult to find is the result of a “perfect storm” of factors, according to The Washington Post. Although the city’s population fell by nearly 4%, an estimated 336,677, between April 2020 and July 2021 according to the US Census Bureau, new arrivals to New York City often present a different set of preferences than those who made their exit. Many are young adults seeking new housing, reinforcing the reality that New York is not only the most densely populated large city in the US -- it’s also the most desirable, going strictly by the numbers.