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Even during the slow winter months, New York City apartment rents are still hitting new highs in Manhattan and Brooklyn as the housing market tightens even further. The median rents in both boroughs rose to their highest on record for the month of February, according to Douglas Elliman’s latest market report compiled by Miller Samuel.
Median Manhattan rent hit $4,290 last month, the report found, up 2 percent from January and 3.3 percent year-over-year. Similarly, tenants signing new leases in February saw median asking rent per square foot rise 6.6 percent from a year ago, reaching $84, which was 18 percent higher than February 2020. The number of new residential leases signed also spiked, increasing 7.7 percent from a year ago and 11 percent from January to 4,349 new leases in February.
Rental listings spent less time on the market, with listings renting in 47 days, down 21 percent from January and 2 percent from a year ago. Listing inventory, notably, was up 33 percent from a year ago, reaching 7,966 new listings in Manhattan last month. The vacancy rate slipped below 3 percent for the first time in six months, hitting 2.49 percent in February.
Ultimately, rents are rising because New Yorkers who would prefer to buy homes are instead staying in the rental market, according to Jonathan Miller, the president and CEO of Miller Samuel.
“The reason rents were skyrocketing is that mortgage rates were surging at a very steep ascent, and that pushed an already tight rental market well beyond capacity,” said Miller. “With the Fed pivot in December, everybody was thinking that rates will be lower a year or two from now, and that people on the fence would buy. We’ve seen an uptick in contract activity in New York and nationwide. But the last three or four weeks we’ve seen mortgage rates rise, and we’ve seen unemployment remain very low, below 4 percent nationally. And the notion of a rate cut earlier rather than later seems out of reach. We have a robust economy, we don’t have enough inventory as a general rule, and as a result, rents are rising.”
Meanwhile in Brooklyn, the median rent for February was $3,499, essentially flat from last month’s figure of $3,500 and up 3 percent year-over-year. That still represents a 13 percent increase from February 2020, right before the pandemic.
And, like Manhattan, Kings County tenants were signing significantly more residential leases in February, reaching the second-highest total on record. There were 2,498 rental agreements signed last month, up 17 percent from January and 62 percent from a year ago. Bidding wars for rental listings had also increased, with 25 percent of renters signing leases above asking, up from 21 percent a year ago. Marketing time for new listings was down by nearly half from a year ago, dropping from 46 days in February 2023 to 26 days last month.
In Astoria and Long Island City — the only areas of Queens where Elliman tracks residential rental data — rent trends were more stable. Median asking rent for February was $3,239, up 1.2 percent from the previous month and up just $1 from a year ago. Listing inventory — at 545 apartments on the market — was up somewhat year-over-year, at 6.7 percent. Still, new rental listings were spending a lot less time on the market than they were a year ago — 75 percent less, in fact, dropping from 83 days in February 2023 to just 21 last month.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com
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