The price of an apartment has gone up dramatically, according to a recent report from the National Association of Realtors.
The median price of a two-bedroom in Manhattan jumped by $7,955 from May to July to $1,742,947, while the median price for a three-bedroom jumped by nearly $4,000 from May 1 to June 1 to $2,715,566.
The price increase also was greater for people renting from apartments that have been converted into condos.
The NAR’s survey of 7,500 rental listings from April through July found that while the number of apartments converted into condominiums in Manhattan has increased from May 2015 to July 2015, the number that have stayed the same increased from June 2015 to June 2016 by 6.6%.
NAR President and CEO Michael C. Rothstein told Bloomberg that the median apartment rent in Manhattan had increased by 7.4% between May 2015 and July 2015.
The city’s median apartment price rose by almost 8% between the same two years.
The average monthly rent in the city jumped by more than 7% during that time period.
“The rent increases have been particularly significant in the last three months of the year, with the median monthly rent increasing by almost 7% in June, 7.5% in July and 7.6% in August,” Rothstein said.
Rothsell said it was not surprising that the number and size of apartments that were converted into condo units has risen in the past two years, given the rapid expansion of the condo market in Manhattan.
He said the city’s apartment rental market has become even more crowded.
“Rent in Manhattan, and apartments in particular, is becoming even more expensive, so the rental market is going to have to get even more congested if we’re to continue to have the same rents we have today,” Rothsell told Bloomberg.
He added that this has a ripple effect on the economy, which has led to job losses in areas that traditionally rely on businesses that employ people from the suburbs.
The condo market, Rothsell noted, is “so big and so expensive that if you’ve got a job and you have a place to live, it’s a great opportunity to make a lot of money.
If you’ve never had a place of your own, it doesn’t make sense to go into it.”
A number of factors are contributing to the condo boom, including the fact that condos have become more attractive to prospective home buyers, according a report from Citi.
In an analysis of the data from the Greater New York Area, the firm found that the percentage of new condos and apartment buildings in Manhattan rose from April 2015 to March 2016, and the percentage went up by more 10.3% during the same period.
The data also showed that the price of condos went up even more quickly than the price increased for apartments.
According to Citi, the average condo rent in May increased by 4.3%, while the average apartment rent increased by nearly 10% from May 2016 to June 2017.
A spokesperson for the Realtor Association of New York said the condo price increase was driven by demand, not supply.
“As more new condos are added, the supply of units will outpace demand,” the association’s spokesperson, David Saperstein, said.
“While it is true that many people are finding more space, many also are experiencing displacement due to displacement caused by higher rent.”
Citigroup analyst Matthew Healey told Bloomberg’s Matt Gurney that the condo rental market in New York City is “overwhelmingly driven by supply.”
Healey said the growth in demand for apartments has been “quite dramatic,” and he said that this demand was also fueled by new construction, such as the construction of apartments for the wealthy and the construction and renovation of luxury apartment buildings.
“It’s a very different market from the one we saw a few years ago, when people were still renting apartments in large apartment complexes,” Healey noted.
While the number has increased, the increase in the number renting from existing apartments has not.
“In New York, a lot more people are choosing to rent from their apartments, but the number being rented from existing apartment units is actually declining,” Healy said.
Bloomberg’s Matt Graetz contributed to this report.