Rent prices fall for the first time in a year amid surge in new leases
Manhattan apartment rents defied seasonal trends by dipping slightly in May even as leasing activity surged.
The median rent for new leases fell to $4,250, down 3.3% from the same time last year, according to data from Miller Samuel Inc. and Douglas Elliman Real Estate. However, this marks the second-highest rent on record for May and remained flat compared to April.
This decline in rent prices comes at a time when the market is usually gearing up for its busiest season. Historically, rents rise through spring, peaking in July and August. However, since late 2023, rental prices have remained stable, just below the all-time high of $4,400.
“Prices are moving sideways,” Jonathan Miller, president of Miller Samuel, told Bloomberg. “Where there is growth or decline, it’s nominal.”
Despite the drop in rents, Manhattan’s rental market is far from sluggish. In May, 7,085 new leases were signed, a substantial increase of nearly 41% from a year earlier. This uptick in activity also coincided with a 28% rise in available listings, which has helped to keep rent prices from escalating.
Miller believes that high renewal prices set by landlords are driving existing tenants back into the market. With mortgage rates hovering around 7% in May, many potential homebuyers are choosing to rent instead.
Looking ahead, Miller expects these trends to continue through the summer, with only modest increases in rent prices as new tenants, including students and recent graduates, look to secure apartments before the fall.
“I’m not anticipating runaway rents, but I don’t see them correcting much either,” he said.
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Brooklyn also experienced a surge in leasing activity, with 4,341 new leases signed in May, up nearly 161% from the previous year. The median rent for new leases in Brooklyn hit a record high of $3,600 for May.
In Queens, areas like Long Island City and Astoria saw 811 new lease signings in May, a 113% increase from a year earlier. However, the median rent in these neighborhoods experienced a slight decline of 0.1%, reaching $3,400.
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