Rents in Manhattan rose at the highest rate in more than a decade in October, with increases especially impacting the upper end of the market.
Over the past 18 months, as the pandemic wreaked havoc on the Manhattan rental market, landlords offered steep discounts on properties. Taking those cuts into account, the median rental price for all apartments in Manhattan rose to $3,382 in October, up 18% from a year earlier, according to a report from brokerage firm Douglas Elliman and appraisal firm Miller Samuel.
“Prices are not quite back, but very close to being back to where they were pre-pandemic,” said Jonathan Miller, president and CEO of Miller Samuel.
The median monthly rent for a one-bedroom apartment was $3,400 in October, up 11% from last year, while a two-bedroom was $5,158, up 20% from a year ago, according to the report.
“The upward trajectory began in early spring with vaccine adoption as the city started to see inbound migration with institutions and companies reopening,” said Miller.
In the upper end of the market, prices for some categories of apartments are already above pre-pandemic levels, according to the report.
“The higher end of the market is rebounding more quickly and more rapidly,” Miller said.
When looking at rent increases for “doorman” properties, which skew higher-end and more expensive, versus “non-doorman” buildings, there is a significant gap.
The median rent for apartments in doorman buildings, inclusive of landlord discounts, was $4,263, up 25% from last year, Miller said. Prices are even 8% above their pre-pandemic levels from two years ago.
But the median rent for apartments in non-doorman buildings, inclusive of discounts, was $2,560, only up 7% year-over-year — and that was the first annual increase in 18 months, said Miller. Rents in these buildings are still down 11% from October 2019.
And rents are rising even more quickly for expensive loft apartments in Manhattan. The median rent for lofts has more than doubled since last year, according to the report, with the median rent of $5,000 last year, rising to $10,600 a month in October.
Miller said one of the main reasons for the polarization in performance between high-end rental buildings and lower-end ones is that the economic damage caused by the pandemic was much more punishing for lower-wage workers than for workers in the middle and upper income tiers.
Throughout the Manhattan market the newer, higher-end, properties are seeing steeper price increases as demand returns, said Miller. And it’s a trend that is expected to continue, he said.
“There has been a release of pent-up demand that came with a greater perception of safety and activity that is drawing inbound migration from all over the country,” he said. “Now with the relaxation of the Covid travel ban, we expect an uptick of international demand in the coming months. The next leg up will be early next year when corporate America comes back and people return to work in large numbers.”
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