The average monthly rent in Manhattan, New York, has exceeded $5,000 for the first time in history, according to the latest market report from real estate firm Douglas Elliman and Miller Samuel.
According to the report, the average monthly rent in Manhattan was $5,058 in June this year—a 1.7% increase from May’s $4,975 and a 29% increase from last June’s $3,922 average monthly rent! Manhattan had 6,433 rental listings in June, an 11.4% increase from 5,776 in May. So what are the reasons for such an unreasonable rise in rents?
First, the reopening of schools and companies requires students to return to campuses and employees to return to offices. Online classes and telecommuting models during the pandemic no longer apply, so people are flooding back into New York City.
Douglas Elliman also added: “As mortgage rates rise, people are more inclined to rent rather than buy, adding more pressure to an already tight rental market, and even New York City has set off a scramble for scarce rental housing. Source’s “bidding war” – the highest bidder wins.
In addition, the most important reason is: the continuous record high inflation rate! U.S. inflation now tops 9 percent for the first time since 1981, fueling fears of a recession in the world’s largest economy.
Jumping out of New York City, let’s take a look at the overall situation in the United States-in the US Consumer Price Index (CPI) data in June, which continued to hit a new 40-year high, in addition to energy, rent also “contributed”.
According to the Consumer Price Report released by the U.S. Department of Labor yesterday (July 13), rent prices surged at the fastest pace since 1986 in June! Previous analysis has pointed out that rent inflation is likely to continue to rise this summer before peaking at around 6.5% in the next few months.
So now the reality is: Not only are young people struggling with the high cost of living such as high prices, oil and rent, but even middle-aged people in their 40s and 50s are starting to be forced to move back to their extended families to live with their parents ! Such numbers have reached a record high!
Economist Shreya Nanda said: “The Covid-19 pandemic has taken a huge toll on the financial well-being of vulnerable people of all ages… Coupled with a dysfunctional housing market and wages that have not kept pace with the cost of living, All of this explains the question “Why are so many people forced to move back into extended families to live with their parents?”
Between 1971 and 2021, the percentage of Americans living in multigenerational households more than doubled to 18 percent, according to a recent survey by the Pew Research Center. More than half of adult children who live with their parents say it helps them ease financial stress; 30% say they don’t have to pay rent or mortgages.
Meanwhile, a recent survey by U.S. personal finance firm Credit Karma found that 29 percent of 18- to 25-year-olds live at home with a parent or relative and see it as a long-term housing solution.
Let’s look at New York City again. The “bidding war” in the rental market has made tenants angry but helpless.
According to a report by Douglas Elliman, 18% of New York City’s rental properties were caught in a “bidding war” in May — whether it was the highest-end luxury condo or the average small condo in a remote area.
The current state of the housing rental market in New York City is: sparse listings, high demand; open house slogans are a small scene, and many potential renters seem willing to participate in the “bid war” – paying more than others For more cost, get your desired property! “Bidding wars” for market-priced apartments are legal in New York. But broker fees are also hard to regulate amid this frenzied “bidding war.”
In New York City, the broker’s fee for a standard home rental is 15% of the annual rent, but according to Keyan Sanai, a salesperson for Douglas Elliman, there’s nothing stopping brokers from charging higher fees, and he’s even heard of some People charge a commission of 18% or 20% of the annual rent!
