New York City’s rent prices continue to rise, with the average person in Manhattan now paying $5,000 to live in an apartment, which is higher than any other major city in the country. Of course, there are people who actually spend that much every month to live here, but most New Yorkers don’t even come close to that figure. To get anywhere near that $5,000-per-month number, you’d have to earn at least $150,000 per year and spend at least $3,750 per month on rent and utilities alone.
The monthly rent for a Manhattan apartment just surpassed the five thousand dollar mark — and it’s projected to get even higher.
According to a report by Miller Samuel and Douglas Elliman, the average rent on an apartment was $5,058 in June, the highest amount ever recorded. Rents increased by 25% to $4,050 a month, an increase of 29% over last year.
Besides increasing the cost of living for renters, these price increases might also have some effect on inflation. In June, the government’s consumer price index showed an increase of 9.1% from a year earlier in New York, the nation’s biggest rental market. It may even make sense for the Federal Reserve to consider higher interest rates to tackle rising inflation, especially in Manhattan where rental prices continue to increase.
“There are no signs of a slowdown, at least not yet,” said by Jonathan Miller, the CEO of Miller Samuel. In Miller’s opinion, higher interest rates and fears of a housing crash are driving more renters into the rental market.
Manhattan’s apartment supply, which spiked during the pandemic, is now at a record low. In June, the vacancy rate was just 1.9%, with about 6,400 apartments available – a decrease of 46% from last year.
Despite concerns about crime, taxes, and troubled subways, brokers say families and renters who left the city during the pandemic are now returning. Recent reports have also found that young renters are participating in the rental market too. People in the millennial and even the younger Gen Z population are coming to the city after college or to live and work remotely from high-rise rentals to take advantage of the city’s culture and nightlife.
“At the end of the day, they want to be in New York,” said Gashi, a broker at Serhant. “Even some of the families that went to Miami are coming back.”
August and July are the biggest rental months in Manhattan because many tenants search for September moves to escape from back-to-school obligations and responsibilities of work. That being said, houses on the market have empty open houses, but rentals never have as many.
“When a good rental comes on the market, especially downtown, there are lines down the block,” Gashi said.
In the rental market, bidding wars have become commonplace. Gashi said one of her clients is considering a one-bedroom downtown that’s listed for $6,000 a month, up from $5,000 last year. To try and steal the deal from their competitors, the client is offering $6,750.
She also has a client who is living in the area but will eventually be buying an apartment and is in the process of looking. She is looking to rent an apartment for the meantime at a monthly price of over $30,000.
“He’s willing to spend on the rental because when the time is right to buy, he hopes to save even more on the purchase,” she said. “He thinks sale prices are about to come way down.”