The New York City rental market is doing well.
According to the most recent rental report from Douglas Elliman and Miller Samuel, the net effective median rent for Manhattan rose 16.7% in November. That is the second-straight month of record rates.
Scott Durkin, CEO of Douglas Elliman, said Thursday on CNBC that they were shocked and had been too busy to think about it.
The report found that records were broken in the month of November. The market share of concessions fell for the fourth month in a row, showing that landlords are no longer required to offer bonuses in order to get tenants. According to the report, Manhattan's vacancies hit another all-time low.
New lease signings in Brooklyn and Queens rose to their highest levels in more than a decade. Brooklyn has seen a rise in new lease signings over the past 15 months.
The net effective median rent for the city as a whole increased by 22.8% over the course of the year. It is the highest increase in more than a decade, but it is still below the levels of 2019.
The rental market is strong because we have a severe inventory shortage, according to Durkin. There was a shortage of inventory that pushed up the need for rentals.
The report shows that higher-end buildings have seen their rents increase faster than the lower end of the market.
Rents at the top half of the market increased in November compared with the lower half, according to Douglas Elliman and Miller Samuel. The market share of rentals above $15,000 in Manhattan rose to its highest in a decade.
In many cases, the luxury rentals have increased almost 30%, and some people are taking these sight unseen.
Jonathan Miller is the president and CEO of Miller Samuel.
Miller said in a phone interview with CNBC that the market is the most divided he has ever seen. The economic damage caused by the Pandemic was more severe for lower-income workers. The strength of the upper half is reflected in the strength of the lower half.
There are apartments for rent on the Upper East Side.
In Manhattan, the gap between rents is widening for doorman buildings and non-doorman buildings. The report shows that the median rent for doorman buildings increased by 27% compared with last year. Rent for non-doorman buildings went up by an average of 9% over the course of the year, but is still below the rate seen two years ago.
As you move higher in price, we are seeing an increase in leasing activity and pricing. That is the inverse of pre-pandemic. It was tight at the top as you moved down. We are seeing the opposite of that.
Despite the record increases, Durkin doesn't worry about the market becoming inaccessible. New York isn't showing any abnormal trends.
New York is still cheaper to live in than Los Angeles and San Francisco. He said there was no effect on what was happening in New York.
Miller said that the city is not back to normal in terms of population density. He said that in Manhattan, office towers are not always full. Over the next few years, that has to be wrestled with.
