NEW YORK (BLOOMBERG) -- Manhattan’s rental market is showing signs of hitting a limit as prices in August plateaued during what’s typically the most expensive time of the year for new tenants.
The median rent for new leases signed last month was $4,400, unchanged from the record set in July, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The steadiness suggests that consumers have reached a breaking point after rents climbed 7.3% from a year ago and 35% from August 2021.
August is often the peak of the leasing season, busy with renters moving before the school year starts. But it ended up being a slower month compared with May and June, according to Jonathan Miller, president of Miller Samuel. The number of new leases in August dropped 14% from a year earlier to 5,025.
“We’re still at or very near all-time highs, but we’re continuing to see new leasing activity fall, and that’s an indicator that the market is topping out,” Miller said.
The number of available apartments shrunk from July, suggesting that renters chose to renew leases over braving the market to find a new place to live. Competition started to ease up in another sign of the market’s weakening. Miller said that 11% of leases were signed after bidding wars, compared with 19% a year earlier.
In Brooklyn, rents also appear to have peaked. The median price was $3,850 in August, $100 less than a month earlier. In northwest Queens, where renters have been flocking as they’re priced out of Manhattan and Brooklyn, the median rose $259 to a record high of $3,900. In both of those areas, the number of new leases fell more than 40% from a year earlier.
Miller said landlords might start to lower asking prices as demand falls, but he isn’t anticipating big price declines in the months ahead.
“No one is expecting a rent correction unless we have some severe economic event,” he said.