The Manhattan rental market is down and there are 15,000 vacant apartments

The Manhattan rental market is down and there are 15,000 vacant apartments

A person enters a building with rental apartments on August 19, 2020 in New York City. Leaving New York has spurred the city to a large number of retailers and apartments after the corona virus outbreak.

Eduardo Munoz Alvarez | VIEW Magazine | Corbis News | Getty Images

The number of vacant rental apartments in Manhattan has almost tripled over the past year as more New Yorkers have left the city and prices have dropped.

There were more than 15,000 vacant rental apartments in Manhattan in August, up from 5,600 a year ago, according to Douglas Eliman and Miller Samuel. The list of empty units is the largest ever recorded since data collection began 14 years ago, the report said.

Analysts say the rental market is the best barometer of overall strength in Manhattan’s real estate market because the market is acting faster to demand change than rents 75% of the apartments and sales market.

Experts say he moved from the city to the suburbs at this time Covit-19 Crisis Manhattan is largely fueled by tenants leaving the city.

“The rental market is weakening and weakening,” said Jonathan Miller, CEO of Miller Samuel. “First-time buyers in the outlying areas often come from the Manhattan rental market.”

Hopes of a comeback in the fall or late 2020s are increasingly unlikely. Despite declining rental prices – average rental prices fell by 4% in August – discounts are not yet steep enough to attract new tenants back to the city. The average rental price for two bedrooms in Manhattan is still 4,756 per month.

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This fall is generally a slow period in the Manhattan rental market, especially before an election, Miller said.

Landlords always try to attract tenants with great offers, the largest share of landowners in history offers offers. On average, landlords offered new tenants 1.9 months of free rent in August. The weakest segment of the rental market is the low end for bedrooms and studios, which is the result of the high impact of epidemics on low-income earners.

The average rental price for studios was down 9% to $ 2,574 and one-bedroom apartments were down 5% to $ 3,445 on average.

The big question for the Manhattan economy and beyond is how far the economic ripples spread from the weak rental market. When large landowners, such as REITs and real estate companies, have access to capital, small mom and pop landlords with one or two buildings may have trouble paying their mortgages and property taxes, which would then hit banks and lenders, as well as New York’s tax revenue.

“Where you already see the pressure of landowners is at the lower end of the price spectrum,” Miller said. “You clearly see the weakness at the small end of the rental market.”

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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