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Three Cents Worth: Manhattan Rents Not Feeling Peaked

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[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller offers a rental market report epilogue.]

Last week we released our rental study and the consensus was that the rental market was strong, better than the sales market (and expensive). So I thought I'd present the past 20 years and look at some of the peaks. When adjusted for inflation, the perspective of when peak was actually changes quite a bit.

The red line tracks the aggregate rents paid for each quarter going back to the 4th quarter of 1991. Prior to that my rental data gets pretty thin, so that is as far back as I went. Since I only have the net effective rent calcs for the past year, I used face rents (rent paid without considering concessions). If I had historic concession data, I'm suspect it would show a lot more volatility but a reasonably similar trend.
The peak for face rent occurred in 1Q 2009 but 4Q 2006 was close behind. I remember the 2006 period well since there was tremendous concern that mortgage rates would spike in 2007 and sales inventory soared as many buyers became renters that year.

The blue line represents the median face rent adjusted for inflation. Rents would need to be 39.5% higher to reach the inflation adjusted levels of 4Q 2006 and 55.1% higher to reach the 1Q 2001 20-year peak.
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]