April was a volatile month, marked by sharp stock market swings and constant tariff news, creating an atmosphere of uncertainty. This led to a slowdown in purchases for many buyers. Many paused their searches, but we are starting to see activity pick up again.
Despite the uncertainty, sale prices for April held firm and rose 4.69% year-over-year.
For the last three years, low inventory and rising rents were the direct result of rising interest rates. As the mortgage rates increased, higher borrowing costs pushed many would-be buyers to postpone their plans and kept sellers with historically low rates from moving/upgrading. This led to rising demand in the rental market and drove rental prices steadily upward. As we approach the peak rental season, we are seeing multiple bids on most rentals.
On June 11th, a new rental law will be in effect, which might drive up rental prices even further. The FARE ACT requires landlords to pay their broker’s commission. Landlords can no longer pass their broker’s commission payment to the tenant, which is the norm in strong rental markets like the one we are currently experiencing. As the commission shifts to landlords, they will likely bake this fee into the rental price. Tenants who hire a broker to represent them will still cover that agent’s fee.
Overall market rent increased in April by 4.5% compared to a year ago. In Manhattan, the trend was even more pronounced: rents rose to a median price of $4,800 based on executed leases, a 5% increase from this time last year, pushing the cumulative increase in residential rents to nearly 25% since pre-COVID levels.
Best Wishes,
Boris Fabrikant, Esq. and Collin Bond, Esq.
