Manhattan Rents Up 23% From Last Year: What's Happening To The Big Apple?

Living in Manhattan has gotten a damn sight more expensive, with the median rent on apartments rising by the largest annual percentage increase in a decade.

What Happened: According to a new report published by the brokerage Douglas Elliman Real Estate and the Miller Samuel Inc. appraisal group, the net effective spiked by 23% year-over-year to $3,369, the highest annual increase in the 10 years that the companies have been tracking this data. However, the median was also 3.8% below the pre-COVID-19 pandemic level in November 2019.

The median prices for rentals within the top 10% of the market was up by 22.5% from one year earlier while mid-tier prices saw a 15.9% uptick and entry tier prices rose by 10%.

The appeal of a Manhattan apartment building with a doorman was mixed, with 50.9% of the rentals occurring in properties with a doorman and 49.1% in properties where tenants were expected to open the front door on their own.

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Why It Happened: The market share for two-year leases in Manhattan was 53.7%, a substantial rise from the 16.7% record low recorded in January. This increase is attributed to more tenants seeking to secure longer leases ahead of greater rent hikes as more people seek to return to the city after being in self-imposed suburban exile during the coronavirus pandemic.

“They just want to get back into the city — they’ve been away long enough,” said Hal Gavzie, executive manager of leasing for Douglas Elliman, in a Bloomberg interview. “There’s a kind of fatigue with being out of Manhattan, and missing it.”

Last month, Douglas Elliman announced it was spinning off from parent company Vector Group VGR to become a stand-alone, publicly-traded company with an NYSE listing under the ticker "DOUG."

Photo: Jo Wiggijo / Pixabay