Despite rental concessions being offered, Manhattan’s rental market continues to slow down and recently recorded an all-time high vacancy rate since coronavirus hit the U.S.
It appears that the pandemic has emptied most of Manhattan apartments today.
In the latest market report conducted by Douglas Elliman and Miller Samuel, it says that the borough’s June vacancy rate climbed to its highest record in fourteen years.
The vacancy rate increased by 3.67%
As per the report, there are over 10,000 empty apartments listed for rent in Manhattan this month of June. The number also rose by 85% compared to last year’s rate in the same period. Overall, the Manhattan apartments vacancy rate hit a record of 3.67%.
Analysts explained that the phenomenon is due to various factors but was massively prompted by the coronavirus crisis, including city lockdowns. For instance, brokers were banned from conducting in-person apartment showings until late June. Hence, fewer new leases.
“[The state mandate] was removed before the last week of the month, not enough time to have a material influence on market conditions,” the analysts wrote in the report.
A significant number of New Yorkers fled from the country’s before-epicenter as well, which also massively added to the increase in vacant apartments.
On the one hand, the median rental rent plummeted by 6.6% to 3, 242. The drop, based on Miller Samuel and Douglas Elliman’s data, was the highest since October 2011 and the first in 18 months.
“It does give context to the scale of the movement out of Manhattan during the crisis,” Miller said in his interview with Bloomberg.
Landlords slash rent price
Manhattan apartments’ high vacancy rate—as well as high competition between other lessors—has forced landlords to cut rent price and add rent sweeteners.
Last month, new leases climbed as much as 45%, taking more than 3, 100 Manhattan apartments off the listings, per Douglas Elliman and Miller Samuel report. However, almost half of the said new leases came with concessions.
Landlords started to slash their prices down from the typical rent fee for a Manhattan apartment. They offer “larger than ever” concessions as well (usually one and a half free rent), which drag rental price to plummet by eight percent.
But the most affected segment in the rental market, according to the data, are huge, family-sized Manhattan apartments. It appears that families do not want to risk their lives by staying in New York. According to brokers, a lot of families have fled to the suburbs.
Yet, despite the discounts and free rent, a one-bedroom Manhattan apartment will cost renters an average of $3,400.