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A view of clouds over Manhattan skyline in New York, United States on August 08, 2023. (Photo by Fatih Aktas\/Anadolu Agency via Getty Images)<\/p>\n
Anadolu Agency | Anadolu Agency | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Manhattan rents fell for the first time in over two years, as the supply of empty apartments grew and renters held out for price cuts, according to a report released Thursday.<\/p>\n
The median rent in Manhattan fell 2% in November, to $4,000 from $4,095, according to a report from Douglas Elliman<\/a> and Miller Samuel<\/a>. The drop, while slight, marks the first year-over-year decline in median prices in 27 months, according to the report.<\/p>\n “Prices hit an affordability threshold and this is the reaction,” said Jonathan Miller, CEO of Miller Samuel.<\/p>\n The decline in Manhattan rents has important implications for the housing market<\/a> and overall inflation<\/a>, since Manhattan is the nation’s largest rental market. Renters and economists have been predicting a decline in Manhattan rents for over a year, but tight supply and strong demand pushed rents to record highs over the summer, holding steady in the early fall.<\/p>\n Now, brokers say demand<\/a> is fading fast.<\/p>\n “The decline has been sudden,” said Keyan Sanai, the top rental broker for Douglas Elliman in New York. “You can feel it.”<\/p>\n Sanai said many landlords are quietly offering concessions, like a month of free rent, rather than cut listing prices. He had a recent one bedroom listing in midtown that was asking $4,700 a month. After negotiating, the renter won concessions that brought the effective rent down to $3,900 a month.<\/p>\n The number of apartments offering concessions increased to 14% in November from 12% in October, according to Miller Samuel and Douglas Elliman.<\/p>\n Sanai said the number of renters looking for apartments has also cooled quickly. In September, his inbox was filled with renter requests for a listing in a luxury building where units went for $7,500 a month. In October, a similar unit came on the market “and nobody was reaching out. The velocity declined rapidly.”<\/p>\n Of course, Manhattan rents are still the highest in the country and are still 11% higher than before the pandemic. The average rent in Manhattan is still $5,150 a month, despite also falling 2% over last year.<\/p>\n Inventory also remains historically tight, just under the normal 3% level, according to Miller Samuel and Douglas Elliman.<\/p>\n Yet brokers say renters looking for apartments may see prices continue to fall into early next year. They say job cuts<\/a> in the financial and tech industries in Manhattan will limit demand from young new employees in Manhattan. Falling mortgage rates<\/a> will also start to make the sales market more attractive, turning more renters into buyers.<\/p>\n “For landlords I think it could be a dark winter, then things will probably get brighter in the Spring,” Sanai said. “My advice to renters is to take advantage of the deals.”<\/p>\n<\/div>\n<\/div>\n