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Manhattan Apartment Leases Surge, Keeping Rents From Sliding

(Bloomberg) -- Manhattan apartment hunters had plenty of competition in January as leasing jumped and rents rose from a year earlier for the first time since October.

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The median price on new leases was $4,150, up 1.3% from January 2023 and $100 more than this past December, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate reported Thursday. A total of 3,922 rental agreements were signed last month, up 14% from a year earlier and the third straight annual increase.

New Yorkers have been seizing on apartment costs that have come down from the summer’s records. The intense demand — somewhat unusual for the dead of winter — has helped push up rents at a time when they might be expected to level off. While Manhattan’s median remains below the all-time high of $4,440 reached in July, it’s still well above pre-pandemic levels.

“The median rent is not pushing the thresholds that it once was, and that’s helped attract more activity,” said Jonathan Miller, president of Miller Samuel. “It’s not as if rents are falling steadily, but they’re drifting lower. They’re off from the summer records, but we’re still seeing some elements of pricing still high.”

While listing inventory in Manhattan has increased — the 7,496 apartments available at the end of January was 18% more than a year earlier — it’s still historically low, the firms’ data show.

Some rent declines are likely in the near future as mortgage rates come down, according to Miller. That’s because competition for rentals would ease if more people have incentive to become homebuyers.

Outer boroughs are seeing robust demand as well. New leases almost doubled from a year earlier in Brooklyn, where the median rent was little changed at $3,500. In northwest Queens — the neighborhoods closest to Manhattan — lease signings jumped 31% from the previous January, while the median rent slipped 5% to $3,200. Listing inventory declined in both boroughs.

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©2024 Bloomberg L.P.

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