NYC Apartment Rents Soar To New Highs As Inventory Dwindles

Bisnow/Miriam Hall

Apartment rents in Manhattan hit their highest level ever last month, with prices up more than 30% over a year ago.

The median net effective rent hit $3,870 last month, according to appraisal firm Miller Samuel. That marks a more than 6% jump on last month and a 38.7% increase from April 2021. The vacancy rate is less than 2%, and the listing inventory is down by more than 70%. Just shy of 16% of leases included some form of concession, compared to nearly 50% last year.

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

“It is not a fun market for tenants at the moment,” he said, adding that in the current market, up to 50 people may look at an apartment the day it is put up for rent.

Last month, studios were renting for an average of $2,994 in Manhattan, while three bedrooms were at 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 a third of all luxury rentals involved bidding wars.

In Brooklyn, the effective median rent has increased faster and faster over the past six months. In April, the median net effective rent was $2,998, a near 15% increase year-over-year. An average studio in the borough leased at $2,697, with three-bedrooms going for $4,546.

Queens also experienced enormous rises, with median net effective rents at $3,050 — a 28.7% increase from last year.

The city’s rental market tanked in the worst of the pandemic, sending Manhattan's net effective rents tumbling 19% year-over-year between January 2020 and 2021.

But the low rents caused a flurry of lease signings, and by the end of summer last year, tenants were finding the incentive packages and deals were 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 concerned about increased regulations that may come as governments try to respond to major affordability problems.

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