Median rents in Manhattan, Brooklyn and northwest Queens rose by double-digit percentages in January from a year earlier as Queens climbed to a record and Manhattan and Brooklyn approached their highs of the summer.
While frenzied markets dominated by bidding wars have largely calmed, don’t expect significant declines anytime soon, according to Jonathan Miller, president of Miller Samuel Inc. Indeed, median rents in Manhattan and Brooklyn are flirting with all-time highs.
“Since peaking in July, the market is placing median prices a little bit below the peak, but it’s really staying in a narrow band,” Miller said. “I describe this market as moving sideways.”
Manhattan median rents rose to $4,097, 15.4% higher than in January, 2022 and the third-highest on record, according to a report by Miller Samuel and brokerage Douglas Elliman Real Estate. Manhattan rents gained just 1.2% from December, the slowest month-on-month gain among the three boroughs, In Brooklyn, the median rose to $3,499, a gain of 25% from January 2022 and 6% from December. The median rent in Queens rose to $3,369, up 14.2% from a year earlier and 19.9% from December.
Manhattan median rents were the third-highest on record, rising 15.4% from January 2022.
Queens set a new record after all markets peaked in the summertime, with a nearly 20% month-over-month rise.
Brooklyn median rent was just $1 short of breaking its summertime record.
Luxury rents rise in Manhattan and Brooklyn
Bidding wars, in which potential tenants make offers above asking rent, fell in January, accounting for 12.3% of all leases signed that month. That compares with 16.9% a year earlier.
Miller noted that bidding wars for luxury apartments, defined as the top 10% of the market, were up in January as median rental prices rose.
Median rent for luxury apartments in Manhattan rose 12.8% from a year earlier, to $11,000, and were unchanged from the previous month.
“The median rental price of $11,000 is the third highest in history” in the luxury segment, “so luxury bidding wars are rising,” Miller said. “What it’s suggesting is that we’re seeing a more sustainable strength at the upper end of the market.”
Median rents in the Brooklyn luxury market rose 40.2% from a year earlier, to $7,959, and 14% from December. In Queens, median luxury rents fell 3.1% from a year earlier, to $5,595, a decline of 12.9% from December.
Queens setting new records
In northwest Queens, the median rent rose 14.2% since January of 2022, coming out to $3,369 a month. It also had a large monthly spike, rising 19.9% from December.
The northwest Queens market was the only one of three New York City markets that broke records set over the summer in July, according to Miller.
“They saw substantial month-over-month increases and are all well above pre-pandemic numbers,” Miller said. “It does show you that the opposite of rising rents is not falling rents.”
Brooklyn median rent just $1 short of a record
The median rent for apartments in Brooklyn rose 25% year-on-year, according to the Elliman report, coming out to $3,499. It was just $1 short of breaking records for the highest median rent ever recorded, Miller said. That record was set in August, and the Brooklyn market tends to trend about one month behind Manhattan, he added.
“In the summer, there was almost a relief that prices stopped rising,” Miller said. “Essentially that continues to be true except for the fact that they’re remaining elevated. We’re not seeing any meaningful improvement in affordability.”
Median rents showed a large jump month-over-month from December, rising 6%.
Bidding wars remained prevalent in the Brooklyn market, where one in five new leases overall resulted from a bidding war and ending with rates higher than what the landlord was originally asking for.
Miller said the growth seen in all three markets across 2021 was abnormal. Now, he said, the market is beginning to normalize.
“It was a rocket ship, it was straight up,” Miller said. “Now we’re coming out of that era. Activity is lower, but it’s still about the same or a little bit higher than pre-pandemic.”