Demand plunged for New York City rentals in June, and the news was especially grim in Manhattan, reflecting the stranglehold the shutdown order had on viewings.
There were several new records set for Manhattan rentals last month, underscoring the impact of the lockdown, including the highest vacancy rate in nearly 14 years of tracking this metric, the fewest lease signings for June in 10 years, and an 84.7 percent jump in new listings, according to The Elliman report for Manhattan, Brooklyn, and Queens rental markets.
Manhattan median rent fell 4.8 percent to $3,378, wiping out all gains seen in 2019 and 2020, the report says.
New York’s shutdown order, which prevented brokers from showing listings in person, was lifted just before the last week of the month. That was not enough time to counter market conditions for the month, says Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report.
“The report is showing what a housing market looks like when a market is essentially closed down for months,” Miller says. “Only by the last week of June did the market open up and as a result listing inventory surged. Pent-up demand is expected to release later in July or early August,” he says.
Manhattan’s vacancy rate has been trending up before June’s record jump, which hit 3.67 percent, up from 1.61 percent a year ago.
“Last month’s 2.88 percent vacancy rate was the prior all-time record,” Miller says. “So the jump was the first time 3 percent was exceeded, yet the record went so much farther to 3.67 percent.”
The high vacancy rate is another symptom of the shutdown—it’s difficult to fill a vacant apartment if you can’t view it in person.
But we may be seeing the ceiling for the vacancy rate. “I suspect we are getting near the top since the restrictions on physical showings has been lifted,’ Miller says.
Gap between Manhattan and Brooklyn median rent narrows
Renters who were willing to bet on NYC and Manhattan in particular, found some advantages. The percentage of Manhattan leases with a rent concession was up, and the number of free months grew as well.
And the pressure on the Manhattan rental market brought the median rent there closer to Brooklyn’s.
With Manhattan’s decline in median rent by 4.8 percent to $3,378—and Brooklyn’s 1.7 percent increase in median rent to $3,050—the $328 spread between the two borough’s is the narrowest margin since $287 in November 2014, Miller says.
In Brooklyn, the number of new leases declined annually for the ninth straight month, falling 9.1 percent, and listing inventory jumped 57.1 percent.
Queens saw new leases decline annually for the 11th straight month, falling 34.7 percent. Median rent fell by 5.7 percent to $2,700, dropping for all apartment sizes as well.
Other market reports
A report by UrbanDigs noted a deluge of new Manhattan rental listings in the June market—reaching levels seen during a typical busy summer season. However, leasing activity remains far below normal. The high number of rentals “suggests landlords may have to reduce rent or increase concessions as summer goes by,” the report says.
MNS released June 2020 rental market reports for Manhattan, Brooklyn, Queens, and the Bronx, which compares apartments by size, doorman vs. non-doorman buildings, and neighborhood trends. In June, non-doorman units reflected 52.2 percent of rental market activity.
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