Manhattan Apartment Rents Keep Retreating from Summer Peak

When you catch a cold in November, the common assumption is it’s a seasonal ailment. But when the bug has been around for three months, a larger trend may be at work.

The warning signs on lagging apartment rents are flashing in one of the nation’s priciest apartment markets, a place where a record of $4,400 per month in the median price was set during the summer.

The median rent in Manhattan dropped to $4,000 in November, the third consecutive month the benchmark has declined and a 4.6% drop from the October tally, according to the latest Elliman Report.

Perhaps more significant, a year-over-year comparison of median rent in Manhattan showed a drop of 2.3% from the November 2022 tally, the first annual decline in 27 months, going back to the middle of 2021.

The number of new leases in Manhattan dropped by nearly 29% in November, to 3,368, from the October total of 4,717. The vacancy rate increased to 2.93%, with a slight uptick in inventory, which rose to 8,422 from 8,291 the prior month.

Factoring in concessions, net effective median rent in Manhattan was $3,971, a decline of 4.6% compared to the $4,164 recorded in October, according to the report, prepared by appraiser Miller Samuel.

Despite the retreat on median rents, the benchmark remains 11.1% above the pre-pandemic level thanks to the record-setting pace in the summer of 2023. The median rental price for luxury units held steady in November at $10,900, a tick lower than the $11K recorded the previous month.

The median rental price held steady in Brooklyn at $3,495 in November, nearly identical to October’s tally of $3,490, but considerably lower than the $3,950 record set in July.

New leases surged by nearly 16% to 2,240 in Brooklyn from the October total of 1,936, a jump of almost 83% from the November 2022 total of 1,221.

The market share of bidding wars, a proxy for new leases signed above the landlord’s asking price, was 20.2% in Brooklyn in November, with an average premium of 14.6%. Net effective median rent, factoring in concessions, was $3,453, a tick down from the October figure of $3,456.

The median rent in Northwest Queens dropped to $3,175, down from $3,198 in October. The number of new leases in NW Queens dropped to 416 from 422 the prior month, which is still 44% better than the November 2022 tally of 289.