NYC Apartment Rents Fall While Lease Signings Spike in October
By Rebecca Baird-Remba November 9, 2023 8:00 am
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New York City apartment rents may have peaked in recent months as rental inventory expanded, according to a new monthly report from Douglas Elliman.
But don’t expect a big drop in residential rents anytime soon, as prices hit record numbers in recent months, said Jonathan Miller of Miller Samuel, who compiles market reports for the residential brokerage.
“You could see it coming in slow motion,” said the appraiser and longtime residential market guru. “It doesn’t mean that rents are going to be significantly more affordable in the near future, but the era of the rental rocketship is over.”
Miller noted that even as apartment rents have fallen citywide in the past few months, they remain up 40 percent compared to October 2019, which was a few months before the pandemic hit. Average monthly asking rent in Manhattan was $5,158 for October, down 5 percent from both September and a year ago. The median rental price in the borough was $4,195, down a few percentage points from September but up 5 percent from a year ago.
And, probably thanks to new inventory and cooling rents, the numbers of new leases are up across the three markets — Manhattan, Brooklyn and Queens — that Elliman tracks. Tenants inked 4,717 leases in Manhattan in October, up 7 percent from September but down 6 percent from a year ago.
Similarly, average asking rent in Brooklyn was $3,909 last month, down 6 percent from September and down just over 1 percent from a year ago. Lease signings, however, were up a whopping 54 percent from September — to 1,936 leases signed — and were up 17 percent from a year ago.
In Long Island City and Astoria, Queens, average monthly asking rent was $3,484, down 8 percent from the previous month and up 5 percent from a year ago. Just as in Brooklyn and Manhattan, the number of leases signed — 422 — was up 43 percent month-over-month and 9 percent from a year ago.
And even though inventory declined month-over-month in all three boroughs, it was up 30 to 40 percent year-over-year in each of them.
“On a year-over-year basis, inventory is up 43 percent citywide, so that’s making it hard for rents to stay where they were,” said Miller. “Rents are still up substantially from pre-pandemic, but they have been drifting lower since the middle of the summer. The change in the Airbnb law perhaps brought more supply into the market as a result.”
He added that the sky-high rents over the summer, combined with high prices, had probably pushed tenants to the edge. New leasing activity had slowed somewhat in the late summer and early fall as a result.
“The market hit some kind of affordability threshold, hitting new highs every couple months for the past few years,” he said. “This summer represented a point of exhaustion, and across the region we saw rents peaking.”
