Manhattan Rents Decline Sharply As Vacancy, Inventory More Than Double
New York apartments cost far less to rent than they did this time last year, as the economic impact of the pandemic continues to bear down on the city.
Manhattan’s median net effective rent, which takes into account incentives and concessions, hit $3,167 in July, according to Douglas Elliman and Miller Samuel Real Estate’s monthly report. That figure represents a more than 10% drop from July 2019.
Face rents, which is what the apartment is advertised for and doesn't include landlord-provided freebies, dropped too: The median price went down by 6% from July last year to hit $3,320. Nearly 47% of new leases signed in Manhattan included some form of concession in July, per the report, which is the highest percentage in more than two years.
The number of new leases fell 23% from the year before. Meanwhile, listing inventory soared by 121%, likely as more apartments were listed after the stay-at-home measures were lifted and brokers could start tours again. The vacancy rate crept up from last month to reach over 4%, the highest level recorded in Miller Samuel's 14 years of compiling rental reports.
Brooklyn’s median net effective rent held firm on last year’s July number, dropping just 0.5% to reach $2,902. Of new leases signed in the month, 38% of them featured some form of concession. When broken down by property types, there were some larger drops. Studio median price decreased by 12%, for example, to hit $2,300. Listing inventory in the borough increased by 84%.
In Queens, median net effective rents also took a hit, falling 15% to $2,424. A total of 36% of new leases were signed with concessions, and listing inventory jumped 70%.
There have been some concerns there will be a mass exodus from New York City as a result of the virus, exacerbating an already declining population. Rents have been dropping since March, and real estate players expect the rents will continue to drop well into next year, Bisnow previously reported.