(Photo via Getty Images)
Sept. 27, 2023 By Ethan Marshall
According to a report from StreetEasy, Manhattan is experiencing the largest increase in rental inventory among all the boroughs in New York City. Five of the 10 neighborhoods across the city going through the fastest growth are in Manhattan. Additionally, Long Island City made the list as the lone Queens neighborhood, ranking eighth.
With inventory shortage being most severe in the borough of Queens, there is a lot of competition for rentals on the market. The median asking rent of $4,259 presented a 3.9% year-over-year increase, almost reaching the record high for the neighborhood of $4,259 in May 2023. Many rental units in Long Island City are located within modern buildings with sought-after amenities. Amenity-rich rentals account for 41% of the neighborhood’s inventory.
The Manhattan neighborhoods with the fastest growth are Battery Park City, SoHo, Hamilton Heights, Gramercy Park, East Village and East Harlem. Battery Park City experienced the second-largest inventory growth overall compared to last year, at 78%. SoHo placed third at 56%, Hamilton Heights fourth at 44%, Gramercy Park fifth at 42%, East Village sixth at 40% and East Harlem ninth at 31%.
Year-over-year in August, the rental inventory in Manhattan rose 22.1%, to 20,850 units. This was the largest increase among all the boroughs. According to StreetEasy’s report, high-asking rents make it more enticing for landlords and homeowners to list vacant units. This results in more rentals being pulled into the market, thus contributing to rising inventory.
As the inventory continues to rise in Manhattan, rent growth is slowing down. The median asking rent in Manhattan was $4,300 in August 2023, declining slightly from $4,332 the previous month. While the annual growth is 4.2% higher than a year ago, it was also eight times slower than the 33.1% increase experienced then, when intense competition contributed to sharp rent increases.
The average rental listing in Manhattan received 26.2% more inquiries last August compared to the same month in 2019. Despite the fact there were 2.6% fewer listings than August 2019, total inquiries from renters rose 2.7%.
StreetEasy credits modern high rises offering coveted amenities, including in-unit laundry, a dishwasher, an elevator and a doorman, as a key source for rising rental inventory in Manhattan. The number of amenity-rich rentals rose 28.1% year-over-year in August to 3,481 units, making up 16.7% of the borough’s total rental inventory. This presents a 15.9% increase from August 2022 and 11.9% from August 2019.
Since these amenity-rich units are at a premium, the median asking rent is higher. At $6,630 in August, the median asking rent in Manhattan for these units was 54.2% more than all rentals within the borough. In Battery Park City, 22.5% of its listings was an amenity-rich rental.
According to StreetEasy economist Kenny Lee, inventory will likely continue to climb throughout the remainder of this year and into 2024, putting the brakes on the sharp rent growth seen over the last couple of years.
Mott Haven of the Bronx placed at the top of the list in year-over-year inventory growth, increasing 110%. Downtown Brooklyn ranked seventh at 36%. Another Brooklyn neighborhood, Prospect Heights, ranked 10th at 26%. Long Island City was the lone Queens neighborhood to make the top 10, ranking eighth at 31%.
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