Manhattan rental market plunges further in August, leaving the segment with the largest inventory of empty units in 14 years.
The once-thriving rental market of Manhattan is now at its lowest as the number of empty rental apartments across the borough continues to soar. And providing the current situation today, analysts said a bounce back is not likely to happen in the fall and even at the of the year.
Pandemic prompts 15, 000 empty rental apartments
Based on a report provided by real estate appraisal firms Douglas Elliman and Miller Samuel, there were 15, 000 empty rental apartments in Manhattan last month and is 14.5% higher compared to July.
The number has significantly soared as well—nearly three times or 166.2% higher—from 5, 600 empty units listed last year. The trend is also the highest number recorded since the first data collection began, which was dated 14 years ago.
The CEO of Miller Samuel, Jonathan Miller, also stressed that given the situation, the rental market in Manhattan is getting weaker.
“The rental market is weak and getting weaker. The first-time buyers in outlying areas are largely coming from the Manhattan rental market,” Miller said, per CNBC.
Experts said the record-high number of empty rental apartments is mostly due to renters fleeing the borough to the suburb as the coronavirus continues to pose threat.
And despite slightly lower rental prices, analysts believe a rebound is unlikely to happen in the fall or even the end of 2020. Most likely because the price for a two-bedroom unit is still US$4,756, and is not low enough to attract renters back to the borough again.
Rents are down, up in some areas
To entice potential tenants, landlords offer larger-than-ever discounts recorded in history. Some landlords on average, for instance, are offering 1.9 months of free rent to new renters.
Average prices for studios fell an estimated 9% to $2, 574 while prices for an ordinary single bedroom unit drop by five percent to $3, 445.
On the flip side, rental prices in some areas across the city —particularly those who have the highest COVID-19 infection rates—had surprisingly climbed as much as 0.3% between February to July. Some of the areas include Corona, Jackson Heights, and East Elmhurst.
But for areas with low infection rates such as Greenwich Village, Battery Park City, and Tribeca, rents are down by 1.9% during the same period.
A report from StreetEasy also shows that rental prices in some parts of the city where low-income households reside have slightly increased.
The situation appears confusing. But as how Barika Williams of ANHD describes it, “there is a Manhattan-centric narrative and a ‘rest-of-the-boroughs’ narrative.”
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