Manhattan's rental market saw a slight dip in prices in August, after six months of record-setting prices.
According to a report from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, the median price for new leases in August was $4,100, down $50 from July's all-time high. Despite the price dip, August was the market's busiest month of the year, with more than 5,800 deals signed, a nearly 10% increase over July's volume. According to Jonathan Miller, president of Miller Samuel, rents are still robust but are starting to plateau. He doesn't expect costs to drop significantly unless the labor market shifts, cutting off the flow of new hires into the city and making it harder for current apartment dwellers to pay their bills.
After six months of record-high rents, Manhattan's rental prices have begun to slip. This is welcome news for renters who have been struggling to keep up with the city's skyrocketing costs. With rents finally starting to level off, hopefully tenants will be able to catch their breath and enjoy a little more financial stability.
Rents have increased significantly this year compared to 2019, before the pandemic. August's median rent was 17% higher than the same month three years ago. This means that any relief for tenants is likely to be limited.
According to Hal Gavzie, executive vice president of residential leasing at Douglas Elliman, there is no sign of the rental market slowing down. Landlords are still able to command high rents for their properties.
Even though the housing market has shifted in recent weeks, with fewer people attending open houses and responding to listings, his real estate agents have still seen some interest.
According to Gavzie, landlords have not yet begun to cut rents, but concessions are slowly starting to appear. This does not surprise Gavzie, who notes that many have been wondering how long high rents could be sustained.
Incentives on new leases are up from last month, when only 11% of leases had them, according to Miller Samuel and Douglas Elliman. The average value of the incentives is 1.5 months of free rent, which is a sharp increase from last August, when the average was 1.9 months.
Not every apartment needs to come with a bidding war to get rented. The percentage of new leases with bidding wars is still roughly where it’s been since the start of the year, at one in five deals. The average amount over the asking price was the highest ever, at 12.6%.
According to Miller, the market is still very tight.
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