- Rent for studio in Manhattan down -21.6% when considering concessions, according to Miller Samuel Appraisers
- Rent for one-bedroom -19.1% and rent for two-bedroom -12.5% when factoring in concessions
- Leasing activity increased +33% in October
It hasn’t been this good for Manhattan renters since 2008 and the financial crisis. And, the second shoe, an almost inevitable second lockdown due to surging COVID cases and infections, hasn’t even dropped yet.
Take a look at these year-over-year rent decreases (including concessions) in October 2020:
- Studio rent -21.6%
- One-bedroom rent -19.1%
- Two-bedroom rent -12.5%
An eye-popping 60.4% of landlords gave concessions (rent drops, free month’s rent, etc.) in October 2020 compared with the 36.9% of landlords who gave concessions to renters in October 2019. (Clearly, some rent is better than no rent.)
Despite renters paying attention to these rent drops and acting on “deals” that translated into rental activity increasing some +33% in October, the vacancy rate in Manhattan rose nearly a half of percent from September to October with there being 16,145 empty units, an increase of +218.4% over last year at this time.
Two waves of renters have left the Manhattan rental market since the pandemic outbreak. The first group, wealthier and quicker to leave in the early spring, landed in the region’s outer cities and in ultra-lux travel destinations. Many simply kept their city digs and bought “second primary residences.” The second wave of Manhattan-ites migrated to Brooklyn to take advantage of more affordable home prices. In the wake of these two waves, the Manhattan sales market remained pretty much as it was pre-pandemic while rental vacancies began mounting.
It appears these migration waves have slowed down for the time being BUT, if the city experiences another second forced lockdown, anticipate more rental vacancies and more declines in rent prices. More and more vacancies = lower and lower rents.
Thanks to Curbed.