NYC rent soars to all-time high — and it’s not done yet, analysts warn

Inman News

The median rent in Manhattan climbed to a new high of an astounding $4,175 per month, according to Douglas Elliman and Miller Samuel’s March 2023 New York City rental report

The median rent in Manhattan hit a new all-time high of an astounding $4,175 per month, according to Douglas Elliman and Miller Samuel’s March 2023 Manhattan, Brooklyn and Queens rental report. This marks the first time the borough’s rent has exceeded $4,150.

That means Manhattanites are spending $50,100 per year on rent, and would need to make a salary of $160,000 per year to afford such a sky-high rent bill, as well as be approved by the 40 times rent rule, whereby a tenant must make an annual salary that’s 40 times their monthly rent.

Meanwhile, the average rent exceeded the median, hitting a whopping $5,115 per month.

The city’s rental prices have experienced fluctuation in the wake of the COVID-19 pandemic, with rents tanking in 2020 as many renters opted to flee the crowds of the city. Then, after many residents returned and some who stayed moved into larger units because they could now afford to, prices started to climb again, and by late 2021, increased demand led to rent hikes.

As offices reopened and mortgage rates rose, rents kept on climbing. Median rent in Manhattan surpassed $4,000 for the first time ever in May 2022, and in July, the city’s average rent exceeded $5,000 for the first time in history. Once unthinkable for the rental market, bidding wars ensued, with potential renters offering hundreds of dollars more than the rent’s asking price per month, or sometimes offering to pay a year’s worth of rent in advance.

The median rent for a Manhattan studio was $3,190 per month in March, and the median rent for a one-bedroom was $4,150 per month.

In the luxury sector, or the top 10 percent of all rentals above a threshold of $7,915, median rent hit $10,500, which was well below the October 2022 record of $13,000.

Climbing prices also have renters trying to hold onto their current rent prices for longer, Elliman’s report showed.

“The market share of two-year leases expanded to 56.3 percent, the highest level in 20 months, as tenants wanted to lock in rents with expectations of higher rental prices going forward,” the report stated.

As spring moves into summer, prices will also likely continue to rise, Jonathan Miller of Miller Samuel told The New York Post.

“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,” Miller said.

The median price for rentals in Brooklyn was a bit more reasonable at $3,493 per month, as of March 2023, while the median rent was $3,300 per month in Northwest Queens.

Almost one-third of New Yorkers are looking to move away from the city in the next five years due to crime, housing costs and quality of schools, according to a Siena College Poll conducted in March.