Key Highlights
- Number of apartments for rent in Manhattan tripled in month of September
- Manhattan’s vacancy rate, “normally” between 2%-3%, now just under 6%
- Median net effective rents (that include concessions) dropped -11% to $3,036
According to a newly released study by Douglas Elliman and Miller Samuels Appraisers, available rental apartments in Manhattan during the month of September tripled to nearly 16,000. The specific number of apartments standing empty in Manhattan, 15,963, translates into a vacancy rate of just under 6% whereas normally, the vacancy rate in Manhattan stands between 2% – 3%.
Less demand also translated into declining rental prices. This latest report indicated that median net effective rents that include concessions dropped -11% to $3,036. The average rate for a one-bedroom unit in September was $3,307 while the average rate for a two-bedroom unit was $4,817. Rental prices for studio apartments fell by -14%.
Manhattan is home to the largest rental market in the country. Two-thirds of all Manhattan apartments are, in fact, rentals. As monthly rent prices fall and inventory rises, a potential cascading effect could well affect smaller, less capitalized landlords as well as mortgage lenders and banks. Such a cascade would also impact property tax revenue, the largest source of revenue for New York City, as well.
Steven James, president and CEO of Douglas Elliman’s New York City brokerage, said, “The consumer knows the landlords are on the ropes…” meaning that potential renters could negotiate even lower costs as apartments stand empty. “The chain reaction is going to be difficult, especially for newer landlords that haven’t been through something like this before.”
Thanks to CNBC.
