(Bloomberg) -- New York City apartment hunters got some relief in August as rents declined in what’s typically the priciest month of the year.
In Manhattan, new leases were signed at a median of $4,245, down 3.5% from the previous August, when costs were at an all-time high, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Median prices also fell annually in Brooklyn and Queens.
Manhattan’s decrease was the third year-over-year drop in four months, signaling a slight cooling off for the market after 2023’s march toward record highs. Rents may see continued declines for the rest of the year, given that fall and winter tend to be less competitive. Falling mortgage rates also may help ease competition for leasing by pushing more people to become homebuyers, according to Jonathan Miller, president of Miller Samuel.
“New York’s rental market is transitioning into softer conditions, and tenants will benefit from lower prices,” Miller said. “It doesn’t mean tenants should expect a significant correction moving forward, but there is some potential for some modest declines ahead.”
Rents won’t fall precipitously, partly because there’s still so much demand. New lease signings surged year-over-year in each of the three boroughs the firms track. Miller attributes that to a high amount of “churn” in the market. Instead of accepting renewal hikes, tenants are going out in search of better value. In turn, that adds their units to the available inventory, giving other apartment hunters more choices.
In Manhattan, the 11,065 listings left available at the end of August was almost double the supply a year ago, the firms said.
While that offers some consolation to New Yorkers who’ve faced intense competition in recent years, there won’t be much in the way of bargains to be found. Manhattan’s median on new leases last month was still 21% higher than in August 2019, before the pandemic, and one out of every five renters paid more than what the landlord was asking, according to Miller.
“We’re leaving an era of rapid rental price growth to one of more stability,” he said. “There will be some relief, but relative to already high rents.”
Brooklyn’s median rent on new leases last month was $3,650, down 5.2% from a year earlier. In Northwest Queens, the neighborhoods closest to Manhattan, the median dropped 9.2% to $3,541.
©2024 Bloomberg L.P.
