NEW YORK (BLOOMBERG) -- Manhattan rents fell annually in November for the first time since mid-2021, a sign that the apartment market is experiencing more than just seasonal sluggishness.
New leases were signed last month at a median of $4,000, a 4.6% drop from October, and 2.3% lower than in November 2022, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It had been 27 months since the previous year-over-year decline.
NYC Apartment Rents Fall
“This is beyond seasonal,” said Jonathan Miller, president of Miller Samuel. “It’s not a weak market, but it’s weaker than the frenzy of the last couple of years.”
Rents have fallen rapidly over the past three months, sliding 9.1% since hitting a record high of $4,400 in July and August. While apartment hunters are seeing some relief from the price surge that started as employers began calling workers back to their offices in mid-2021, rents are still 11% higher than they were in November 2019, before the pandemic hit.
Prices slipped as Manhattan’s vacancy rate rose annually for the 14th consecutive month, reaching 2.93%. Miller said that may reflect a boost in inventory as landlords listed more apartments, shifting units out of the Airbnb market to comply with new city restrictions on short-term rentals.
Miller expects more small rent declines over the next few months, but he doesn’t anticipate a sharp correction before costs begin rising moderately again, during the typically more-expensive spring and summer.
Next year, he said, “is all about being incremental.”
Even as the market was on a downward trajectory, one record high was set in Manhattan: The price per square foot for luxury rentals rose 7.9% to $103.71.
In northwest Queens, the section of the borough closest to Manhattan, the median rent receded year over year for the first time in 11 months, falling 0.3% — or $10 — to $3,175. While in Brooklyn, rents rose slightly from October, last month’s median of $3,495 is down nearly 12% from the peak in July.