Welcome to the Sixth Edition of the BOND Rental Report
As we’d predicted in our last report, the Manhattan rental market hit its summer stride in the second quarter, with average prices increasing between 2.5% and 5% in most neighborhoods, as already-high demand for mid-market apartments further increased after college graduations. While many speculated that Manhattan could not sustain the record rents it experienced in the summer of 2023, we enter the summer of 2024 with average rents keeping pace with last year’s levels and pushing slightly higher still, as demand remains strong and supply couldn’t be stretched much tighter. In fact, a springtime report published by New York City’s Housing Preservation and Development (HPD) announced the lowest vacancy rate in NYC since 1969, at a shocking 1.4% this year. This means fewer New Yorkers are moving out of their current rentals, and those who are coming into the city or moving within town have fewer choices at higher prices and less leverage to negotiate than at any time in nearly half a century!
The rental market in Manhattan is particularly strong in the spring and summer months due to the high turnover among academic, and early career populations converging on New York, seeking to establish themselves in the city. Additionally, for the past two years, a relatively challenging and stagnant resale market has added pressure to already- difficult rental market conditions. With fewer renters seeking to purchase homes due to unwieldy interest rates and low housing inventory among coops and condos, more landlords have been willing to renew existing leases at comparatively favorable conditions for their current tenants, at least until mortgage rates become more tenable. While this has been a benefit to tenants who are already settled, it has also compounded the lack of vacant inventory coming to market this summer, which in turn has influenced even higher pricing for vacant units than in the summer of last year. Demand is seemingly so strong in almost every Manhattan neighborhood that tenants have been motivated to pay historically aggressive asking rents, even if some of the prices seem vastly higher than anywhere else in the US.
BOND New York’s Q2 Report tells a familiar story of $4,000 studios and $5,000 one bedroom apartments in the most popular neighborhoods, and $3,000 studios and $4,000 one bedrooms in peripheral and emerging areas. While prices have generally increased incrementally in most areas, the more telling data point is that time on market was consistently shorter in Q2 than Q1, sometimes by as much as 30%. This reinforces the need for decisiveness, speed, and preparation by consumers looking to sign a lease over the next few months, as the summer is now in full swing.
Renters found some of the lowest prices and best values in Northern Manhattan, with Washington Heights, Inwood, East Harlem, and Hamilton Heights offering considerably lower rents in walkup buildings. The Financial District, Murray Hill, and Midtown East offered more attainably priced amenity-laden doorman buildings, while still offering rent concessions and landlord-paid broker fees well into the warmer months this year.
With historically high competition comes the need for a team of experienced experts to help renters navigate a particularly challenging environment while being aware of their options. BOND agents are the most smart and seasoned tenant advocates in the marketplace, and they’re ready to guide you home this summer.
