The median rent in Manhattan in August was $4,370 per month, remaining constant from the record high in July, as per information from the brokerage business Douglas Elliman and the appraisal and research firm Miller Samuel.
Brokers claimed that there is a shortage of supply because there aren't many new rental buildings and that purchasers who would typically be looking to buy apartments are choosing to rent for the time being owing to high-interest rates.
As families get ready for the start of the school year, August has historically been the busiest month for rentals in Manhattan.
Even still, there are hints that Manhattan's exorbitant rents may be reaching their pinnacle. August saw a 14% fall in the number of new leases, the second consecutive month of declines.
The decrease shows that even while new lease asking rentals are high, tenants are objecting to the costs.
Brokers report that a lot of landlords are also opting to extend their current leases at slightly higher rents as opposed to aiming for more significant increases with new leases.
In short, Manhattan renters may have reached their price limit, reported CNBC.
“The market may have entered an affordability threshold,” said Jonathan Miller, CEO of Miller Samuel. “The market seems to be topping out.”
Apartments are also sitting on the market for a slightly longer period of time, also suggesting a market top. Apartments were on the market for an average of 39 days in August, up from 26 days a year ago.
“I think landlords are becoming more aggressive in retaining their existing renters out of concern about the broader economy,” Miller said.
However, it is unlikely that costs will decrease significantly any time soon. Renters have fewer options as inventory levels are declining.
There were 24% fewer rental units available in August than there were in July, and Manhattan's overall vacancy rate is just about 2.4%, which is slightly lower than the long-term average.
There are still bidding battles for several apartments. According to the data, there were bidding wars for about 11% of all leases in August. Apartments with two bedrooms were in the most demand. In August, a two-bedroom flat in Manhattan was rented for an average of $6,300.
While rents are extremely expensive and in high demand in Manhattan, rents nationwide are also high and are pushing up total inflation.
In the most recent CPI report, housing costs increased by more than 7% compared to the previous year.
Redfin reports that in August, the median rent nationwide was $2,052, just $2 less than the previous record-high. According to Redfin, many landlords are "starting to throw in one-time concessions as vacancies rise."
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