West Siders who hoped last summer’s record-breaking high rents would cool are preparing to once again feel the burn. Median Manhattan rents — hovering at $3,000 a month during the peak pandemic-concessions era of late 2020 and early 2021 — have skyrocketed, hitting $4,000 a month in May 2022 with no sign of a return to those halcyon days.
Douglas Elliman’s March 2023 rental market report revealed the median rent for an apartment to be $4,175, with the average rent at $5,115 — down 1.4 percent from February and up 10.3 percent from this time last year. Median rents on the West Side sit at $4,295 — up 9 percent from last month and a 13.2 percent rise from last March. Last July, average Manhattan rents hit at an all-time high at $5,058, an uncomfortable milestone that has yet to significantly recede nearly a year later.
In addition to price gains, new lease signings surged in 2023, the report reveals. Non-door staffed buildings experienced larger rent increases than door-staffed residences, and lease signings at new developments rose at triple the annual rate. The relatively new phenomenon of rental bidding wars — “a proxy for rents above the landlord’s asking price”, also rose to 16 percent, with competitive renters paying a premium of 9.3 percent above asking price to snag popular pads.
Perhaps most concerning is the higher required income to afford an apartment. A new market report from Streeteasy notes that NYC renters hoping to to keep housing costs “within the recommended range” — below 30 percent of their overall household income — must earn close to $134,000 in annual income to do so, a financial requirement that’s nearly double the city’s median household income of $70,663. Even for those who do make enough to keep rental costs under 30 percent, the specter of inflation — currently up 4.6 percent in the Tri-State area from 2022 — can put a squeeze on available funds.
There is a sliver of hope, however, in the city’s vacancy statistics. According to Streeteasy’s report, stalling home sales have motivated some buyers to rent out their properties — creating more rental vacancies from 2022. Streeteasy says newly listed rental properties rose 5.5 percent from March 2022 to 2023, “the third month in a row of annual growth after 18 consecutive months of annual declines” as homes for sale dropped 21 percent from the previous year in the tenth consecutive month of decline. On the West Side, vacancy was 2.48 percent at the end of March, as compared with 2.02 percent in February and 1.89 in March 2022. Streeteasy predicts that Manhattan’s rental inventory will continue to rise throughout 2023, adding that “renters who can afford to stay in the borough will likely see an increase in bargaining power and tapering of yearly rent growth.”
But despite a promising increase in available housing, the question of affordability in the borough — and Hell’s Kitchen — remains. The cheapest one-bedroom listing in the neighborhood currently sits at $2,500 — requiring a household income of $100,000 to maintain a 30 percent cap on housing spend.
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