NEW YORK (BLOOMBERG) — Manhattan apartment rents reached yet another all-time high last month and are expected to keep rising as the market’s most competitive season collides with the city’s new broker-fee law.
The median rent on new leases signed in May was $4,571, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman. It was the third record price reached in the past four months and exceeded the previous peak by $71.
Apartment hunters will face even more pressure in the next few months, when demand soars as a large share of existing leases expire, and students and recent graduates flood into the city. In response, rents usually rise through the summer before stabilizing in September.
On top of those factors, landlords are expected to raise prices further to cover their costs under the Fairness in Apartment Rental Expenses Act, which as of Wednesday bars owners from imposing broker fees on new tenants.
“We’re going to see a spike, a pretty quick reaction” to the new law, said Jonathan Miller, president of Miller Samuel. “Universally, rents will be higher.”
Bidding wars now are common in the hyper-competitive market. In May, nearly 24% of new leases were signed after multiple offers, Miller said. One bright spot for Manhattan apartment hunters is that the listing inventory was up 31% from a year earlier and reached its highest level since the summer of 2021.
Steady completion of new units in office-to-residential conversions helped drive that increase, according to Miller. While those apartments aren’t necessarily luxurious, they’re more modern than much of the existing housing stock, and the buildings often have doormen, fitness centers and other amenities. That’s more desirable to many New Yorkers than a unit in an older walk-up, meaning the new projects are contributing to the steady rise in rents, he said.
A similar dynamic is at play in Brooklyn, where inventory rose 43% from a year earlier, and in northwest Queens, where it jumped 81%. New-construction units continue to hit the market in those places, though not fast enough to satisfy all the demand.
Rents in both boroughs were up year over year but stayed below record highs. In Brooklyn, the median for new leases was $3,650, while in northwest Queens it was $3,625.
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