By Hadassa Kalatizadeh
The supply of rental apartments in the Big Apple has become limited, leading prices to jump double digits.
In December, Manhattan median rental prices reached $3,392 after discounts —a record for any December in the past ten years, and 21 percent above last year’s December median price of $2,800, as per a market report by Real Estate Brokerage Douglas Elliman and appraiser Miller Samuel.
As reported by the NY Post, rental inventory is 81 percent lower year-over-year compared to last December. Last month there were only about 4,800 available apartments listed for rent. That’s quite a disparity from Dec. 2020, when there were close to 24,800 available listings. At the time, the pandemic had New Yorkers abandoning the city for greener pastures, sparking debate over whether they would ever return. The vacancy rate is now at just 1.7 percent, down from roughly 11 percent a year ago. “What started as a trickle earlier last year has become like a geyser of demand,” Douglas Elliman rental broker Janna Raskopf told CNBC. “I’ve been doing this for 14 years and it’s absolutely unprecedented.”
The Big Apple apartment scarcity caused the prices to surge, with the biggest leap being apparent in studio apartments. In December, studio apartments in the city had a median rental price of $2,550, which is a 22 percent increase.
Location always matters, and in this case, apartments in downtown Manhattan were most expensive, with a median price of $4,095, indicating a 28 percent rise for December. Overall, luxury apartments had a bigger price jump. This was evident by median prices for doorman buildings which jumped 23 percent to $4,298, while non-doorman buildings increased in price by just 8 percent to $2,695.
Due to the low levels of available inventory, the number of new leases was impacted, falling almost 40 percent, to just 3,345 for the month. In Dec. 2020, new leases were at 5,459. Available apartments were snatched up on average 61 days after being listed, which is slower than the 41 days on the market in Dec. 2020. The recent resurgence of the pandemic, led by the Omicron variant also probably impacted the figures. “The market is coming off of unsustainable activity levels and trending toward more sustainable patterns in the coming months,” Jonathan Miller, CEO of Miller Samuel, told Bloomberg. “Omicron is in the mix for sure, just slowing down activity too.”