Manhattan Rents Grow at Their Fastest Pace in Seven Years

If you live in New York City or are thinking of living in New York city then you might want to second guess your choices.   While housing in the nation is on shaky ground right now, there are two cities in America that are having no issues raising rents to the point where spaces the size of closets are going for more than $2,000 a month.  One city is San Francisco where you are hearing stories every single day of people living in cars because rents are so high.   The other city is all the way across the country on the east coast.  A little place by the name of Manhattan.

If it feels like your landlord is raising your rates a little too much lately it’s because he’s been doing so steadily for the last seven years.   It’s no surprise that rents in NYC are sky high.  It’s one of the most sought after regions in the world.  But when you’re talking median rents of $3,339 you better be prepared to whip out your wallet.

In fact the latest survey by New York Zillow affiliate StreetEasy speaks volumes about the city that never sleeps.  A recent press release gives us some shocking details into the actual numbers.

The entire press release is below:

Key facts for Q3 2015:

• The Manhattan median rent increased 9.5 percent year-over-year to a record high $3,339, the fastest pace rents increased since StreetEasy began collecting rent data in 2008.
• Median asking rent for 1-bedroom units in Manhattan increased 10.7 percent to $3,271, fueling Manhattan’s overall rent growth in the third quarter.
• According to the StreetEasy Price Indices, Manhattan and Brooklyn resale prices continue to reach new highs, increasing 6.3 percent and 9 percent year-over-year, respectively.
• Introduced to the report this quarter, StreetEasy’s luxury price tier found that one in five homes for sale in Brooklyn and Manhattan are considered luxury.

The cost of renting in Manhattan soared to an all-time high in the third quarter, growing at the fastest pace in years. Manhattan median asking rents jumped 9.5 percent year-over-year in September to $3,339. This is a record high for Manhattan rents and the largest annual increase since StreetEasy began collecting data in 2008, according to the Q3 2015 StreetEasy® Market Reports for Manhattan and Brooklynⁱ.

Manhattan’s rapid rent growth was fueled by a steep increase in asking rent for 1-bedroom units, which grew 10.7 percent year-over-year to $3,271 in September. Asking rents among studios and 2-bedrooms increased 6.5 percent and 9.7 percent, respectively, while rents for units with 3-bedrooms or more declined 3.6 percent. Rents also climbed in Brooklyn, though at a much more modest pace. The monthly median asking rent grew 1.5 percent from last year to $2,600 in September.

“Renting in Manhattan is more expensive than it’s ever been, a fact that weighs heavily on the city’s long-term housing affordability,” said StreetEasy data scientist Alan Lightfeldt. “In the face of overcrowding, high rents, and growing competition in Manhattan and parts of Brooklyn, more New Yorkers will have to turn their attention to South and East Brooklyn, and above 110^th Street in Manhattan to lower their rent burden.”

The New York sales market was equally as competitive in the third quarter with the median resale price of all Manhattan and Brooklyn homes rising to another record high. Manhattan resale prices of all home types rose 6.3 percent from last year to a record $982,958, as tracked by the Manhattan Price Indexⁱⁱ. The Brooklyn Price Index also reached an all-time high in September, increasing 9 percent year-over-year to $545,139. Last year, prices in Manhattan and Brooklyn grew by 8.5 percent and 9.5 percent, respectively.

As resale prices continue to rise, more for-sale homes in the Manhattan and Brooklyn markets are priced within the luxury category. Introduced for the first time this quarter, StreetEasy’s luxury price tierⁱⁱⁱ found that 21.9 percent of all homes available in Manhattan throughout the quarter were priced in the luxury category, which was above $3.59 million in the third quarter. The price of luxury in Brooklyn rose to $1.39 million, accounting for 20 percent of homes available throughout the quarter.

Looking ahead, resale prices in Manhattan are expected to increase by 0.7 percent to $989,770 over the next month, according to the StreetEasy Manhattan Price Forecast. In Brooklyn, prices are expected to increase 1.9 percent to $555,250 over the next month, according to the StreetEasy Brooklyn Price Forecast^iv.  

The complete StreetEasy Market Reports with additional analysis and neighborhood data for Manhattan and Brooklyn can be viewed at streeteasy.com/blog/market-reports.