Manhattan's rental apartments and housing markets are undergoing significant changes in 2024.
After a year marked by fierce competition and escalating rents due to inventory shortages, the landscape has calmed down, relieving renters.
With an increase in available rental properties, the rapid growth of rent prices is expected to slow. However, a sharp decline is unlikely due to the still-limited inventory compared to pre-pandemic levels.
Surprisingly, Manhattan, often the most expensive borough, will see the most notable easing in rental prices as landlords compete more aggressively to attract tenants.
For home buyers, Manhattan remains a challenging yet intriguing market in terms of housing prices. Despite high mortgage rates, the median home prices have reached their highest levels since 2017.
Sellers must adopt competitive pricing strategies due to a limited pool of prospective buyers.
However, this environment could create opportunities, especially in new developments, as buyers seek move-in-ready homes amid low resale inventory and high renovation costs. The expected dip in asking prices below the $1 million mark in 2024 could make Manhattan real estate more accessible for those looking to invest in housing stock.
Here's more to help you decide if it's time to buy or rent in Manhattan in 2024.
Current Trends and Statistics
Rental Market: Median asking rents increased by 9.3% this year, which is less than the 28% jump in 2022. Higher rents are pushing more properties onto the rental market, with listings up by 8.8% this year after a significant drop last year. This trend is expected to continue into 2024, making it harder for landlords to raise rents significantly above market rates.
Home Sales: In May 2024, the median home price in Manhattan was $1.3 million, with homes selling faster than last year (72 days on the market compared to 94). However, the number of homes sold decreased from 918 last year to 760 this year.
Migration Trends: From March to May 2024, 31% of Manhattan homebuyers searched for homes outside of Manhattan, while 69% looked to stay within the metropolitan area.
Signs of Market Easing
Manhattan's apartment rents are showing signs of easing. In September, the median rent slipped 1.1% to $4,350, down from a record high of $4,400 in August. The vacancy rate also increased to 3.07%, the highest in over three years, indicating that renters are starting to push back against high monthly rents. Landlord concessions, like offering free rent, have also risen slightly.
New Lease Activity
The number of new leases signed by apartment hunters in Manhattan dropped by 12.3% in September. Luxury rental markets and new apartment developments saw declines in both lease numbers and rental prices. Downtown Manhattan experienced the most significant drops, with the median rent falling 2.1% to $4,795 and new leases down by 14%.
Inventory Surge
Manhattan's listing inventory surged by 61.2% in September. This trend and strong demand were also observed in Brooklyn and Northwest Queens, where rental price growth has slowed due to increased inventory.
National Trends
Nationwide, the multifamily vacancy rate rose slightly to 6.8% over the past 90 days, driven by an increase in new units entering the market.
The rise in inventory is a significant development for renters. With more properties available, renters have greater leverage in negotiations. The elevated average rent in Manhattan, which hit an all-time high of $4,400 in August, has shown signs of easing, with September seeing a slight decrease to $4,350. This shift is partly due to the increase in vacancy rates, now at 3.07%, the highest since early in the pandemic.
Landlords are more inclined to offer apartment seekers concessions, such as one month of free rent, to attract tenants to a luxury apartment. This trend is a marked change from the previous year, where residential rent increases rose sharply, limiting tenant options. As inventory continues to rise, it will be more challenging for landlords to raise rents significantly above market rents and rates. Renters will benefit from having more listings and unit type to consider when deciding whether to renew their current lease or move to a new place.
Prospective Buyers
For those looking to buy, Manhattan; 's housing supply remains a competitive market. Despite high mortgage rates, the median home price has stayed robust, hitting $1.3 million in May 2024. However, the market is not without its challenges. The number of homes sold has decreased from 918 in the previous year to 760, indicating that the pool of buyers and potential buyers is cautious, likely due to the elevated mortgage rates.
Prospective buyers should note that sellers are becoming more flexible with pricing. As mortgage rates remain high, asking prices are expected to dip below $1 million in 2024. This trend could present opportunities for buyers, particularly those looking at new developments and in popular neighborhoods. These new, amenity-rich condos are becoming increasingly attractive due to low resale listing inventory and high renovation costs within the real estate industry.
Inventory and Market Dynamics
The increase in rental inventory is a critical factor shaping the market, according to rental reports. In 2023, rental listings jumped by 8.8%, a significant recovery from the 36.4% drop the previous year. This increase is expected to continue into 2024, driven by high rents and mortgage rates encouraging more owners to rent out their properties. With more options available, renters will find it easier to negotiate better deals.
Migration and Relocation Trends
Migration patterns also play a role in the housing market. From March to May 2024, 31% of Manhattan homebuyers searched for homes outside the borough, while 69% preferred to stay within the metropolitan area. This trend highlights a desire for more affordable living options or different neighborhood dynamics, reflecting the broader shifts in housing preferences post-pandemic.
Nationwide Trends
The trends observed in Manhattan are mirrored on a national scale. The multifamily vacancy rate has risen to 6.8%, influenced by an influx of new units entering the market. This increase in supply is creating a more balanced market, making it easier for renters to find suitable housing options.
Market Rates and Future Projections
Looking ahead, the housing market in Manhattan is expected to stabilize further. Renters can anticipate a continued increase in inventory, providing more choices and potentially better deals. For buyers, the dip in asking prices, especially in new developments, presents an opportunity to invest in move-in-ready homes without the added burden of high renovation costs.
Conclusion
Both renters and prospective buyers in Manhattan will benefit from staying informed about these trends. The easing rental market offers relief to renters, while the competitive pricing in the housing market presents opportunities for buyers. As inventory rises and market rates stabilize, Manhattan's housing market in 2024 is poised for a more balanced and accessible future.
Overall, the increased inventory across Manhattan's rental and housing markets signifies a shift toward a more balanced environment for both renters and buyers. Renters will benefit from greater negotiating power and more options, while buyers can look forward to more competitively priced properties. As these trends unfold, staying informed about market rates and dynamics will be crucial for making the best housing decisions in 2024.
Looking to Buy or Rent in Manhattan?
If you're looking to relocate or visit Manhattan or New York in general, be sure to hire professional Realtors like Taleene and Ritchie Krug Jr. who can find you exactly what you're looking for in terms of the best home, apartment, house, condo, or townhome.
Lifelong residents of Long Island, are part of a team with more than 40 years of combined real estate experience. They have a deep understanding of how real estate has evolved through the years which results in a team with unique dynamics and expert negotiating skills being put to work on your behalf. With 20 offices spanning Brooklyn Queens & Long Island, nobody is better equipped to handle your real estate needs.
Comments