(Bloomberg) -- Manhattan renters are seeking out smaller apartments in an effort to avoid paying ever-larger rent bills.
The average size of an apartment leased in July was 945 square feet (88 square meters), 9.5% less than the same month a year earlier, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The square footage has declined on an annual basis in each of the past 11 months. At the same time, the price per square foot rose slightly, by 0.3%, to $85.03.
New Yorkers are sacrificing space to cope with leasing costs that climbed to their highest point on record last summer and have stuck close to that level since. The median price on new leases signed last month was $4,300, the same as it was in June and just 2.3% below the all-time high reached in July 2023, the firms said.
Renters are “downsizing,” said Jonathan Miller, president of Miller Samuel. “It’s this search for affordability.”
The shift to smaller homes has come at a time when moving trucks have been especially busy in Manhattan. New lease signings totaled 7,712 last month, a record for July and 54% more than a year earlier. So many deals were possible because inventory rose 44% to 10,634 available units.
Miller sees the numbers as evidence that renters are “trying their luck elsewhere” after rejecting expensive renewal increases at their current apartments.
August is typically the costliest month for New York leases, but prices may have already gone as high as they can, according to Miller. They may even decline slightly if demand slips as lower mortgage rates persuade more renters to become homebuyers, he said.
“The lower mortgage rates fall, the more pressure is released from rental market prices,” Miller said.
As in Manhattan, rents in Brooklyn and northwest Queens also fell from their July 2023 levels. Brooklyn’s median was down 8.9% to $3,600. In the part of Queens that includes Astoria and Long Island City, the median was $3,450, a 5.2% drop from a year ago.
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