NYC apartment rents hit new highs as inventory dips

Bisnow/Miriam Hall

Manhattan apartment rents hit their highest level last month, with prices up more than 30% from a year ago.

The median net effective rent hit $3,870 last month, according to appraisal firm Miller Samuel. This represents a jump of more than 6% from last month and an increase of 38.7% from April 2021. The vacancy rate is below 2% and the inventory of advertisements has decreased by more than 70% . Just under 16% of leases included some form of concession, compared to almost 50% last year.

“Inventory remains very, very tight, and demand is very high and extremely outpacing supply,” said Hal Gavzie, executive director of leasing for Douglas Elliman Real Estate, says Crain’s New York Business.

“It’s not a fun market for renters right now,” he said, adding that in today’s market, up to 50 people can view an apartment on the day it comes up for rent.

Last month, studio apartments rented for an average of $2,994 in Manhattan, while three-bedroom apartments rented for an average of $8,809. Miller’s report noted that net effective rents in the borough are now at the highest annual rate on record, and that a third of all luxury rentals involved bidding wars.

In Brooklyn, the effective median rent has been rising faster and faster over the past six months. In April, the median net effective rent was $2,998, an increase of nearly 15% year over year. An average studio in the borough is rented at $2,697, with three bedrooms at $4,546.

Queens also saw huge increases, with median net effective rents of $3,050, up 28.7% from a year ago.

The city’s rental market plummeted at the worst of the pandemic, causing Manhattan’s net effective rents to drop 19% year-over-year between January 2020 and 2021.

But low rents prompted a flurry of lease signings, and by the end of last summer tenants were finding bids and inducements a thing of the past. The speed of the recovery has taken many by surprise – and while rising rents are good news for landlords, many are worried about the increased regulations that could come as governments try to respond to major affordability issues.