Renting in Manhattan has become cheaper for the first time in two years — well, sort of.
While paying landlords each month is still an immense burden for many New Yorkers, renters in the borough of skyscrapers have been given a noticeable break, as the median rent for apartments in Manhattan has dropped to $4,000 — a 2.3% decline from the same month last year, according to a new study.
The news marks the first year-over-year decline in the median cost of rent in over 27 months, when landlords were still adjusting to the post-pandemic trends in market prices.
Published by brokerage firms Douglas Elliman and Miller Samuel, the study shows a 4.6% drop in November rent prices in Manhattan compared with October, and a 9% decline from record-high median rent of $4,400 from August.
Median prices for studio apartments in Manhattan hit $3,000 in November, while one-bedrooms averaged $4,000. Two-bedroom apartments, meanwhile, were recorded at an average of $5,410, according to the study.
While the drop is undoubtedly a welcome one for renters, Miller Samuel’s CEO noted that costs are still significantly higher than they were before the COVID-19 pandemic.
“The consumer has reached an affordability threshold,” said Jonathan Miller. “There is only so much more they can pay. Sure rents have seen a 9% decline from the summer, but they are still more than 11% higher than pre-pandemic levels in November 2019.”
Why are rent prices falling?
Still, despite costs being higher than four years ago, the year-over-year drop is significant — and Miller predicted that rents would continue to fall, barring any major unforeseen changes to the fiscal landscape.
One major reason for the sudden change in the upward trajectory of housing costs has been the reduction of nationwide inflation.
The rate of inflation hit a recent high of 9.1% in June of 2022, and remained abnormally high for over a year, until rate hikes from the Federal Reserve helped bring inflation back below 3% earlier this year.
As a result, prices for goods and services, including housing, have stopped their rapid accent, and have begun to decline.
Another reason for the drop has been widespread layoffs in the tech financial industries, which are heavily concentrated in the Big Apple — leaving many would-be tenants sitting on the sidelines of the housing market.
The data is backed up by the situation in the rental market, where more landlords have begun offering concessions to prospective tenants, such as one month free on new leases. The number of apartment listings in Manhattan offering deal-sweeteners reached 14% in November, which marked a 2% increase over the previous month, according to the study.
Vacancy rates for Manhattan apartments, meanwhile, have seen a slight uptick year-over-year, and the number of new leases signed in November dropped 29% compared with October.
Meanwhile, other boroughs have yet to face the same decline in rental prices as Manhattan — with prices in Brooklyn rising 6% year-over-year, and Queens seeing costs essentially stagnant. Many experts, however, believe that the other four boroughs will soon see similar downward trends.
“I think there is more room for further declines into next year,” said Miller.
