Rents slipping nationally, but Manhattan landlords won’t budge

Median rent in borough still above $4K, down just 1% from July peak

New York City
(Illustration by The Real Deal with Getty)

December marked the fourth straight month in which rents declined nationally, but landlords in Manhattan continued to hold the line.

After peaking at $4,150 in July, the median rent in the borough has bounced between $4,000 and $4,100 ever since, according to reports by appraisal firm Miller Samuel for Douglas Elliman.

Last month kept that groove, with the median rent slipping a little over 1 percent from November to $4,048.

December did mark the fourth month in the last five that rents dipped. But considering the 2 percent uptick from October to November, they’ve decreased only 1.2 percent since July.

“The better descriptor at this point is that rents have continued to move sideways,” said Miller Samuel’s Jonathan Miller, the author of the reports.

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Unlike Manhattan, the national market has seen a consistent slide.

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Rents for new leases dropped 1.6 percent from September to December, according to RealPage data.

Rent cuts are common in the winter when demand dwindles, but Real Page’s Chief Economist Jay Parsons characterized the cumulative drop as “deeper than normal” and predicted further cuts this year.

Parson said Class A apartments in particular could see prices drop as new inventory comes online. The “rental market is shifting in favor of renters,” Parsons’ analysis reads.

The national shift isn’t necessarily a harbinger for New York City. “While it’s possible, I’m not sure that there is a direct connection,” said Miller.

The city’s vacancy rate has ticked up for eight consecutive months, a sign that the rampant demand for new apartments in the first part of last year is softening.

Does that mean renters may soon gain leverage?

“Sort of,” Miller said. “It’s moving in that direction.”

Manhattan’s vacancy rate hit 2.67 percent in December, up nearly a full percentage point from 1.7 percent in December 2021, when the number of units available fell below pre-Covid levels for the first time since the pandemic began. Last month’s rate of 2.67 percent is still below the decade average of 2.74 percent.

“Landlords still have the advantage,” Miller concluded.