Manhattan Apartment Rents Appear to Have Peaked

After a summer of record-breaking median apartment rental prices, which topped out in August at $4,400, Manhattan rents finally receded from the peak in September as the vacancy rate expanded and new lease signings declined.

The median rental price in Manhattan declined by 2% in September to $4,350, while the vacancy rate jumped to 3.07% from the 2.42% recorded in August and new lease signings dropped more than 12% to 4,405 from the previous month’s total of 5,025, according to a new Elliman Report.

It’s too early to declare a trend, especially when you consider that the September benchmark is still the third highest median rent in history and more than 24% higher than pre-pandemic levels, but the market does appear to be softening.

In Brooklyn, the median rental price dipped 3.9% in September to $3,700 from the record-high $3,850 recorded in August. Northwest Queens experienced a 9.5% drop from the median rental price of $3,900 notched in August, dipping to $3,528 in September, the report said.

The number of new lease in Brooklyn dipped 2% to 1,254 in September, down from the August total of 1,280. In Northwest Queens, new leases increased to 298 from the August total of 233; the September total represents a drop of more than 22% in a year-over-year comparison.

The vacancy rate of 3.07% in Manhattan marked the first time that vacancies have exceeded the 3% threshold in the borough in two years.

The report, prepared by Miller Samuel appraisers, said landlords are focusing on renewal as new lease signings decline. Consistent with this was the pivot in one-year lease terms, which have surged above 60% market share in Manhattan for the past three months, the report said.

“Tenants opted to lock in for a shorter period as rental price growth eased and near-term trends began to decline,” the report said.

The listing inventory in Manhattan surged to more than 9K units, a jump of more than 61% from the August total of 5,637. Listing inventory also skyrocketed in Brooklyn, notching 5,320, more than double the August total of 1,818.

The listing inventory also surged in Northwest Queens, jumping to 640 in September from the August total of 168.

The market share of bidding wars, a proxy for rents above the landlord’s asking price, was 10.2% in Manhattan, down from 11.1% year-over-year, with a premium of 9%. The market share of bidding wars in Brooklyn was 16.3%, with a premium of 11.9%, Elliman said.

The market share of bidding wars in Northwest Queens was 15.1%, with a premium of 16.3%.

The market share of landlord concessions in Manhattan was 11.8% in September; in Brooklyn, the market share of concessions was 14%.