NEW YORK (BLOOMBERG) -- Manhattan rents surged to the highest level on record in July as a historic collapse in available listings collided with the summer apartment hunt rush.
The median rent on new leases signed in July hit $5,000, up 6.4% from a year earlier, according to new data from appraiser Miller Samuel Inc. and The Real Deal. That’s twice the increase measured in shelter prices nationwide, which advanced 3.2% from a year earlier, according to the US Bureau of Labor Statistics.
The jump comes alongside a sharp drop in supply: Listing inventory last month plunged more than 39% year-over-year in Manhattan, one of the steepest declines the market has seen in a decade. The trend continued across the East River, where the median rent in Brooklyn also hit a record $4,500 in July, while inventory fell by 27% compared to last year.
The decline in listings can be in part attributed to a growing share of inventory “going private” thanks to landlords and brokers increasingly keeping listings off public portals like StreetEasy or RentHop, according Jonathan Miller, the director of markets at StreetMatrix.
“That’s not normal,” Miller said. “There’s a lot of inventory that’s going behind paywalls that the market can’t see.”
Bloomberg
Leasing volume in Manhattan is down nearly 19% even as prices hit records — a sign that scarcity, not demand alone, is driving costs higher, he said.
Nationwide, median rents for one-bedrooms were flat in July from the same time last year, according to a report by rental site Zumper. Many other major cities have seen rents fall, including In Los Angeles and Miami. In San Francisco, though, one-bedroom rents jumped 23% from a year earlier, while active listings fell about 30%.
Luxury Feels It Most
The market squeeze is hitting the top 10% of the market the hardest. The median rent for a luxury Manhattan apartment surged 31% annually to $13,750, more than $1,000 higher than the median rent in June, according to Miller Samuel and The Real Deal.
Manhattan has half as many listings in the luxury segment as it did last July — a steeper drop than the market-wide decline, suggesting that high-end apartments are disappearing faster from public view, said Miller. In desirable neighborhoods like the Upper West Side and the West Village, upscale rental complexes advertise available rentals to eagle-eyed passersby with signs outside entrances instead of listing to the masses online.
Another factor Miller sees squeezing luxury supply is uncertainty around the city’s pied-à-terre tax, which has some prospective homebuyers opting to rent high-end apartments instead.
Renters Left Scrambling
Some tenants are forking over $4,000 broker fees to access hidden listings and avoid competition. Other renters, like Mollie Sheperdson, are left competing to secure a lease from the shrinking pool of public inventory. More than one in four Manhattan apartments were leased after a bidding war, according to the data from Miller Samuel Inc.
Sheperdson, 35, started her search early in May, inquiring about more than 100 listings and touring 20 apartments. She spent a sweltering day crammed into a basement studio in Manhattan’s Chelsea neighborhood with more than 30 others who were interested in the $2,500 apartment, and she spent several nights monitoring StreetEasy for listings that dropped at midnight.
Sheperdson, who works in marketing, ultimately snagged a rent-stabilized studio on the Upper East Side for $2,000 a month with a lease starting in July. She said she was shocked by “how insane the search was.”
“You really have to put in the time and be willing to drop everything at a moment's notice,” Sheperdson said. “I’d show up to an open house on the weekend, and there’d be 50 other people there. It was just complete chaos.”
More stories like this are available on bloomberg.com.
