New York City Apartment Rents Drop Again Following Historic Highs
New York City renters got some relief in October, as median rents dropped for the fourth straight month while still hovering well above pre-pandemic levels.
The median price on a Manhattan rental hit $4,195 in October, down by 3.6% from September prices and by 4.6% compared to October last year, according to new data from Douglas Elliman. The decline follows a modest drop in September from this summer's peak.
Median rents in Brooklyn and Queens fell even more sharply, with Brooklyn dropping by 5.7% from September to $3,490 per month and Queens seeing a decline of 9.4% and median rents of $3,198.
Miller Samuel President Jonathan Miller said the all-time Manhattan median rent record, set this summer, was $4,400. But while October rents are more than $200 down from that high-water mark, they are still 20% above where they were in October 2019.
Part of the reason for falling rents is that landlords are focusing on renewing with existing tenants rather than pushing for higher prices, Miller said, with the pricing shift potentially signaling that New York City’s housing market has reached its rent limits.
“I’ve been calling the rental market a rocketship for the last two years,” Miller said. “I think there's some sort of affordability threshold that has been reached.”
The drop in rental prices comes amid an increase in inventory compared to a year ago. There were more than 8,000 units in Manhattan’s inventory in October, representing a 31.3% increase from the 6,000 listings in the borough a year ago. Inventory was also up by roughly 30% in Brooklyn compared to a year ago and by 39.5% in Queens.
Some of that is due to a New York judge’s decision in August to dismiss a lawsuit brought by Airbnb that sought to challenge the city’s short-term rental laws, resulting in some apartments being released to the market, Miller said.
But Manhattan vacancy rates also remained low at 2.75%. Meanwhile, bidding wars remain elevated, accounting for 13.7% of the market share — which is lower than the 14.2% figure seen a year ago, but is still far higher than a healthy housing market, Miller said.
“Even with the rise in inventory, anybody who thinks that there's a glut of rentals on the market isn't really paying attention,” he said.
Rents per square foot increased year-over-year for the seventh consecutive month in new developments in Manhattan. While luxury rental prices in the borough declined slightly, prices are still far above pre-pandemic levels.
The first year of the pandemic saw rents drop significantly as residents fled the city and landlords offered cut-rate deals, but a slowdown in new housing production and the return of population supercharged the housing affordability crisis that has gripped NYC, as rents jumped to record highs in the years since.
Although the most recent pricing drops may provide some relief to tenants in Manhattan, Brooklyn and Queens, Miller said it is unlikely that NYC’s housing costs will change without large-scale economic events like a recession.
“As long as the region is creating well-paid jobs, I think that sustains the trends,” he said. “It seems like a long shot to see significant improvements in affordability through the end of the year.”
