Photo: Robert Clark
Manhattan remained the most expensive rental market in the country, despite falling rents in July. A spike in new inventory helped ease the tight supply for the month, and could help bring much needed relief to the borough’s renters in the coming months ahead, according to a new report released today by the listing site RentCafe.
Manhattan rents fell 3.1 percent year-over-year to an average of $4,054 per month in July — one of the largest decreases observed nationwide. This was also a substantial decrease from the average $4,154 rent recorded at the beginning of this year, says RentCafe.
Some 27,000 new units are coming to the NYC metro area by the year’s end, more than any other US metro. And about 7,000 of those units are in Manhattan, and that’s good news for Manhattan renters.
“More apartments mean more choices – and, ultimately, more bargaining leverage for the renter,” says Doug Ressler, a senior analyst for Yardi Matrix.
But it’s going to take more than a quick shot of inventory to fix NYC’s affordability problem.
“Solving the NYC affordability issue is not easy, nor can it happen overnight, but it is fair to say that the recent uptick in apartment construction can only be useful and may help fix things in the long run,” Amalia Otet, a communications specialist at RentCafe, tells BuzzBuzzNews.
Nationally, rents remained flat in July, rising to $1,350 from the previous month — up $1 or 0.1 percent. Rents were up 2.6 percent year-over-year in July nationwide.
Rents also increased nationwide from the previous month across all size types by just $1 in July. Studio, one-bedroom, two-bedroom, and three-bedroom rents were $1,243, $1,213, $1,397 and $1,630, respectively, in July.
The national slowdown in rent growth is also attributed to a huge spike in inventory hitting the market this year. Some 21 percent more new apartments will be on the market this year compared to 2016, which amounts to over 340,000 new units.
However, new inventory on the market isn’t impacting all markets equally. In fact, 64 percent of the new units are limited to the top 20 metro areas, leaving many other markets with low inventory, high demand, and higher rents.
Nearly 85 percent of the country’s 250 biggest cities experienced rent growth in July, according to data from Yardi Matrix. Some 30 cities recorded little to no growth, and only 10 cities saw rent decreases.
Despite record-setting apartment construction levels that eased rents in some markets, many others are still experiencing sky-high rent growth due to an increased demand for apartment living. More affordable than buying a home in many markets, Americans are turning to renting for more flexibility and convenience, says RentCafe.
Millennials especially have turned to renting as they’ve been priced out of many housing markets, but RentCafe says that Baby Boomers are also increasingly ditching homeownership for the renter lifestyle.
Click here to read the entire report.