Manhattan Rental Market Implodes: Median Rent Plunges Most Ever As Vacancies Hit Record High

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by Tyler Durden
Thursday, Jul 09, 2020 - 10:20 PM

It's nost just Manhattan’s housing market that is getting crushed in recent weeks: the city's rental market is also starting to show the damage from a pandemic-fueled exodus. According to Douglas Elliman Real Estate and appraiser Miller Samuel, the borough’s apartment-vacancy rate in June rose to the highest on record. Available listings surged 85% from a year earlier to 10,789,  an all-time high for a single month.

Predictably, all that excess inventory has put a dent in pricing with the median rent tumbling 6.6% to $3,242, the first decline in 18 months and the biggest in data going back to October 2011, according to Jonathan Miller, president of Miller Samuel.

“It does give context to the scale of the movement out of Manhattan during the crisis,” Miller said in an interview with Bloomberg, which notes that "many New Yorkers have lost their taste for dense city living while the coronavirus raged, shuttering office buildings and giving people few reasons to stick around."

The delayed response is because apartments vacated during the three-month lockdown were heaped onto the market at the end of June, when the state lifted the ban on in-person real estate showings.

New lease signings jumped 45% last month from May, with 3,171 apartments finding takers, Miller Samuel and Douglas Elliman said. To get those tenants, landlords had to offer average rent discounts of 2%, more than double what they were giving last year. They also piled on sweeteners, such as free months and payment of broker fees, in 45% of deals.

Even with all that, the vacancy rate still climbed to 3.67%, a record in data going back to August 2006. The rate had never before topped 3%, according to Miller.

“We’re in for a summer season that is going to be all about supply,” he said.