[URBAN NOTE] "Manhattan Studios Set Rent Record as Tenants Go Small"

[rfmcdonald]

Bloombergh's Oshrat Carmiel leaves me wondering how anyone who isn't upper-class can possibly afford to live in Manhattan these days.

Manhattan’s smallest apartments are fueling big gains in rents.

The median rent in the borough jumped 8.9 percent last month to $3,375, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Costs for studio apartments climbed 10 percent to a median $2,351, while rents for one-bedrooms rose 9.4 percent to $3,400, both the highest in more than seven years of record-keeping.

New York’s smaller apartments are luring new tenants entering an improving job market in the city, as well as those who can’t afford bigger homes. Would-be buyers who have been shut out of owning because of high prices and tight credit are also lingering as renters.

“The studio and one-bedroom market is the more common jumping-off point for first-time buyers,” said Jonathan Miller, president of Miller Samuel and a Bloomberg View contributor. Rents are rising “because of the logjam that has been created by people who have either been priced out of the purchase market or don’t qualify for a mortgage.”

Manhattan apartment prices jumped to the highest since their 2008 peak in the fourth quarter as buyers competed for a limited supply of homes. Demand was greatest for one-bedroom apartments, which accounted for 38 percent of all sales last quarter, Miller said.