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Manhattan Renter Bidding Wars Hit Record High in Heated Market

(Miller Samuel Inc. and Douglas E)

(Bloomberg) -- Manhattan’s apartment market reached new levels of competitiveness in June.

A record-high 24% of leases were signed after bidding wars last month, according to brokerage Douglas Elliman Real Estate and appraiser Miller Samuel Inc. The firms started tracking the metric in 2021, when the rental market began heating up after the pandemic lockdown lifted.

There were other signs apartment hunters were under intense pressure in June. Units were listed for an average of just 24 days before getting scooped up, an all-time low. And renters paid a record-high premium of 1.4% above listing prices on average, a data point that often reflects a discount.   

“It’s a very competitive market,” said Jonathan Miller, president of Miller Samuel. 

Some listing agents across the city have fallen into the practice of underpricing apartments and asking potential tenants to make their best offer. Renters at times bid more than the asking price unprompted, determined to avoid arduous searches.

Even so, rents held fairly steady. The median on new Manhattan leases signed last month was $4,300, unchanged from a year earlier and $50 more than in May. An ample supply of available units — the third-largest amount for June in data going back to 2002 — helped keep prices in check, according to Miller. 

A substantial amount of “churn” has defined the market’s dynamic over the past few months, Miller said. Renters are opting to move rather than accept price hikes their landlords are demanding, which in turn adds their apartments to the available inventory. 

For now, landlords looking to keep units from sitting empty are holding their rents in line with the already high levels they’ve reached, instead of trying to push them up even more. Prices and demand typically peak in July and August, and Miller expects that will be the case again this year.

“It’s very possible we’ll see prices rise higher and maybe even reach record prices,” he said.

The current all-time rent record for Manhattan, recorded during July and August of 2023, is $4,400.

Prices also were near but just short of record highs in Brooklyn and Queens last month. The median on new leases was $3,695 in Brooklyn and $3,250 in the section of Queens that includes Long Island City and Astoria.

Inventory in both boroughs was at the second-highest level ever for the month of June, and the number of new leases signed fell just short of all-time highs.

©2024 Bloomberg L.P.

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