There’s a great line in the classic movie “When Harry Met Sally” when Billy Crystal’s character Harry reveals that his secret to finding an apartment in New York City is to scour the death notices in The New York Times. Based on new data about NYC apartments, that strategy may still be a logical solution to finding a place to live. And while the city’s vacancies are more scarce than ever, it’s now topped itself after being named the most expensive in the U.S. at the end of 2022.
According to a report from real estate sales giant Douglas Elliman and appraising company Miller Samuel, the median price for an NYC rental jumped 15% to $4,097 in January compared to December’s numbers. If you’re keeping score by borough, the average rent in Manhattan was $5,142, an increase of 13% over January 2022 — the highest ever.
That follows a report from Moody’s Analytics in December, showing New York as the most rent-burdened metro area in the U.S. Moody’s research division reported that a household bringing in the median income in the city needs to pay nearly 69% of earnings to rent the averaged-priced apartment there.
Bolstered by a strong NYC job market and the end of pandemic-inspired remote workers, employees moving back to the city are driving up prices.
“We’re not seeing rents fall in any meaningful way,” Miller Samuel CEO Jonathan Miller told CNBC. “They’re really just moving sideways.”
Leases also increased by 8% from December to January, while the inventory is declining. The NYC apartment vacancy rate was 2.5% in January, less than the typical 3% rate, according to Miller.
In turn, high-end apartments are popping up in city boroughs that previously were not considered desirable locations. “You look at a place like the South Bronx, where no one wanted to go, and now luxury condos are dotting the place,” Percent President Prath Reddy told Benzinga. “They’ve even started calling it “SoBro,” which I can’t even say around my wife, who grew up there.”
In turn, multifamily investment in NYC hit new highs in 2022 but may be starting to slow, according to a report from Ariel Property Advisors. Ariel said the multifamily sector accumulated $16 billion in total dollar volume in 2022, the highest since 2016, representing 42% of the city’s $38.4 billion in investment activity.
According to Ariel, the transaction volume was consistent across Manhattan, Brooklyn, the Bronx and Queens. Manhattan alone logged $7.21 billion in deals in 2022, representing a 154% increase from 2021 with 137 multifamily transactions.
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