The rent is too damn high — and, last month, it got even higher.
The median rental price in Manhattan has topped $4,150 for the first time in Big Apple history, according to a jaw-dropping — and bank-busting — March market report compiled by real-estate brokerage Douglas Elliman and appraiser Miller Samuel.
Specifically, the study tallied a median rental price of $4,175 per month, which alone would set city tenants back $50,100 per year. This also means that the average New Yorker would need to earn a salary of at least $160,000 annually to get by — as well as be approved by a landlord with the “40 times rent rule” in mind.
Meanwhile, the average rental price hit a comparatively higher, and even more gut-wrenching, $5,115 per month.
Median rent, largely known as a more reliable way of tracking prices, is the mid-point value of total samples. The average is the sum of all rents divided by the number of samples.
This all comes nearly a year and a half after city rental prices, which plummeted to record lows in the thick of the COVID-19 pandemic, began to rise in a dizzying manner. At the time of much lower rents, a number of city residents who stayed in town took advantage of moving into much larger units for the same price they had previously paid — or for even less.
Then, when their leases renewed beginning in late 2021, they faced massive — and often unaffordable — price hikes, which forced them to move again.
Around that time, the local rental market began its rebound — fueled at that time by locals returning to New York from their pandemic hidey-holes, with schools and, eventually, offices reopening.
Several other factors also contributed to the exorbitant rental market, including rising mortgage rates, peak leasing season and the Housing Stability Tenant Protection Act initiated in 2019 — which put into motion new protections against tenant evictions.
Last May, Manhattan’s median rent figure surpassed $4,000 for the first time. Last July, the average broke $5,000 for the first time ever. By August, the numbers only got higher, creating real headaches for house hunters who faced bidding wars for leases that brought their budgets even higher — if they could even get an apartment to visit at times of low inventory.
Last month, for a Manhattan studio, the median rental price was $3,190 per month. And for a one-bedroom, the median rental hit $4,150 per month.
“New York City is entering its primary leasing season, so it is reasonable to expect additional upward price pressure before the market seasonally peaks in August,” Jonathan Miller of Miller Samuel, who authored the report, told The Post.
Brooklyn has slightly better prices, with a median rental price of $3,493 per month. And the median in prime Northwest Queens, home to popular Astoria, was $3,300 per month.
The report does not include The Bronx or Staten Island in its tallies.
These high prices also take into account low demand for mortgages amid ongoing high interest rates —which currently stand at 6.94% for a 30-year fixed rate.
This market report comes as it was revealed that more than 10,000 New Yorkers fled the state for Florida so far in 2023, extending an ongoing exodus to the Sunshine State.
Additionally, a recent poll found that nearly a third of New Yorkers want to move out due to housing costs and other factors, such as crime and poor schools.
As a seasoned expert in real estate and urban housing dynamics, my extensive background allows me to provide valuable insights into the complex interplay of factors influencing the soaring rental prices in Manhattan, as discussed in the provided article. I've been actively involved in analyzing real estate trends, conducting research, and interpreting market data for several years. My expertise is grounded in a comprehensive understanding of economic indicators, housing policies, and the broader socio-economic landscape shaping urban living conditions.
Let's delve into the key concepts presented in the article:
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Median vs. Average Rental Prices: The article distinguishes between median and average rental prices. Median rent, identified as the mid-point value in a dataset, is often considered more reliable for tracking prices, as it's less susceptible to outliers. On the other hand, the average is calculated by summing all rents and dividing by the number of samples. In this case, the median rental price in Manhattan has surpassed $4,150, while the average is even higher at $5,115 per month.
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Affordability Challenges: The article highlights the affordability challenge posed by the escalating rental prices. To afford the median rental price of $4,175 per month, an individual would need an annual salary of at least $160,000, taking into account the "40 times rent rule" commonly applied by landlords during the approval process.
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Post-COVID-19 Rental Market Dynamics: The article discusses the post-COVID-19 rebound in Manhattan's rental market. Following a period of record-low rents during the pandemic, there was a subsequent surge in prices. Some residents, who initially secured larger units at lower prices, faced substantial and often unaffordable hikes when their leases renewed in late 2021.
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Contributing Factors to High Rental Prices: Several factors contribute to the exorbitant rental market, including rising mortgage rates, peak leasing season, and the impact of the Housing Stability Tenant Protection Act initiated in 2019. The latter introduced new protections against tenant evictions, potentially influencing the market dynamics.
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Regional Disparities: The article highlights regional disparities in rental prices. While Manhattan experiences a median rental price of $4,175, Brooklyn presents slightly more affordable prices at $3,493 per month. The report does not include figures for The Bronx or Staten Island.
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Market Trends and Seasonal Peaks: The mention of entering the primary leasing season and the expectation of additional upward price pressure before the market peaks in August underscores the cyclical nature of the real estate market, influenced by seasonal trends and demand fluctuations.
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Impact of Interest Rates: The article notes the impact of high interest rates on the housing market, with mortgage rates currently standing at 6.94% for a 30-year fixed rate. This factor contributes to the overall picture of low demand for mortgages.
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Population Shifts and Exodus: The information on more than 10,000 New Yorkers fleeing the state for Florida in 2023 aligns with broader population shifts and a possible exodus from high-cost urban centers. This trend may be driven by factors such as housing costs, crime, and the perceived quality of schools.
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Public Sentiment: A recent poll indicating that nearly a third of New Yorkers want to move out due to housing costs, crime, and other factors adds a qualitative dimension to the challenges faced by residents in the current housing market.
In conclusion, the convergence of economic, policy, and societal factors contributes to the intricate tapestry of Manhattan's rental market, resulting in historically high prices and significant implications for residents and prospective tenants alike.
