An apartment in the Upper East Side district of New York.
Victor J. Blue | Bloomberg | Getty Images
Rents in Manhattan reached record highs in December as apartment supplies plummeted and landlords began demanding double-digit increases.
Douglas Elliman and Miller Samuel reported that Manhattan’s average apartment rent reached $ 4,440 in December, with the more widespread median net effective rent (median rent including all discounts). It has reached $ 3,392. Median net effective rent increased by 21% from last year.
This surge shows a dramatic recovery from a year ago, with more than 25,000 empty rental apartments in Manhattan, and even the most bullish brokers predicted a year-long recovery. Rents are now often above pre-pandemic levels, and lessees are facing a sticker shock with this year’s rent increases.
“What started as a trickle early last year has become like a geyser of demand,” said Janna Raskoff, Manhattan’s leading rental broker, along with Douglas Elliman. “I’ve been doing this for 14 years and it’s totally unprecedented.”
Raskopf and other brokers say demand is driven primarily by college graduates getting new jobs in Manhattan. Many returned to the city last spring when Mayor Bill de Blasio announced that he would reopen the city on July 1. About one-third of office workers have returned to their Manhattan desks, but expectations for a return to the office continue. To bring a wave of people, the broker says.
New Yorkers who sold their apartments and moved their place of residence to Florida or another low-tax state are also renting to maintain a part-time foothold in the city. Raskopf may choose to rent rather than buy in Manhattan, even very wealthy people, until he sees how the economic and cultural future of the post-pandemic city will develop. He said he was waiting for a bystander.
All demand caused a sudden supply shortage. A year ago, the vacancy rate (usually about 2% in Manhattan) was 11%. According to the report, inventories plummeted 81% in December 2021 compared to December 2020.
Currently, the vacancy rate is very low at 1.7%, and only 4,700 apartments are available. Due to the very low supply, the shortage of rental condominiums reduced overall rental activity in December by 40% compared to last year.
Raskopf recently said it listed its two-bedroom for $ 12,000 per month. She immediately had 26 people tour the apartment and fought a bid war among the lessors. She said she is likely to rent at a price 15% higher than the asking price, like many recently listed apartments.
“Forget the Covid discount,” she said. “People usually know that listing prices are just the starting point now, and they will have to bid higher to get it.
Existing tenants are also undergoing significant rent increases. According to brokers, lessees who made good deals in 2020 and early 2021 are beginning to see their debts expire. The landlord believes that the market can increase rent by more than 20% to 30% and is eager to regain the reduction in income and losses during a pandemic.
The biggest rent increase is downtown, with a median rent increase of 28% to $ 4,100. Rents for small studios and one-bedroom apartments soared the fastest, with studio rents rising about 21%.
While many landlords are working with existing tenants to limit growth, some new renters are quickly priced from the market that was finally available in 2020. A new generation of young and first renters.
“The landlord is trying to compromise,” she said. “But they had to keep paying their costs and taxes during the pandemic, and now they can get it back. Some tenants just said,” I can afford a 20% increase. There is no such thing, “they leave. “
Manhattan rent was the highest ever in December
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