According to recent data, the rental market in New York City shows no signs of slowing down, imposing an increasingly heavy burden on its residents. While the cost of daily necessities like groceries, transportation, and entertainment has been on the rise over the past year or two, it is the soaring rent prices that truly dominate the expenses of most New Yorkers.
Albert Dweck, a real estate expert from Duke Properties, shares his insights on the matter. “The New York City rental market is fiercely competitive, and the escalating prices have made it exceedingly difficult for residents to consider purchasing property,” says Dweck. “Even individuals who were once considering buying a starter home are now finding themselves priced out of the market, exacerbating the issue.”
In Manhattan, the net effective median rents have increased for the 20th consecutive month compared to the previous year. Recent data from the real estate Market that all eight rental units they represented this month found tenants within 24 hours. Remarkably, two of these units were not even listed on StreetEasy due to a building waiting list, and three of them experienced bidding wars, setting new records for their respective buildings.
The median rents in Manhattan rose by a significant 12.8 percent, reaching $4,175 in March 2023 compared to the same month in 2022. Taking into account the concessions offered in March last year, the rent increase stands at 13.2 percent. What’s particularly striking about this increase is that it occurred despite there being 40 percent more listings available in March 2023 compared to the previous year.
Unfortunately, the situation has continued to worsen throughout April and May, dispelling the notion that Manhattan alone experiences such exorbitant rental costs. The rental price surge has extended its reach to other boroughs as well, such as Brooklyn and Queens.
Brooklyn witnessed a staggering year-over-year increase of 17.1 percent in median rent, reaching the second-highest level on record. Additionally, the borough saw the highest number of lease signings in its history during the month of March.
Queens also experienced a significant upturn, with both net effective median rent and median rent reaching their second-highest levels on record. March marked a new record for lease signings in Queens, and an astonishing one in five new leases involved a bidding war, representing the highest rate in over two years.
Albert Dweck comments, “The rent escalation has spread beyond Manhattan and into other boroughs like Brooklyn and Queens. The demand for rental properties is surpassing the supply, creating an environment where fierce competition is the norm.”
For those planning to move within the next three/four months, it is crucial to be prepared for higher rental costs compared to previous years and to anticipate intense competition for available properties. The New York City rental market shows no signs of easing, and residents continue to face mounting challenges in finding affordable housing options.