Rising Vacancies in Manhattan
Since the onset of the pandemic in the United States, residents have been leaving New York City in record numbers. Especially considering the harsh lockdowns that were beginning to be put in place and the often severe lack of living space one would be confined in for the duration of the lockdowns, many of those who could, left while they still could.
Even as the lockdowns slowly began to ease as the city finally got a stronger grasp on the COVID-19 pandemic, it appears that those who have left are not returning. In fact, it may appear that more people might be leaving. In October of 2020, vacancies in Manhattan apartments reached a staggering 16,145, an over 6% vacancy rate compared to an average of around 2%. This number represents a slight increase from the month of September, where vacancies sat at 15,923; however, its context is historically much larger. In fact, the 16,145 vacant apartments in Manhattan represents the most vacant apartments in the borough in a whopping 14 years. The number is also representative of the steady increase in vacancies, with July only having 13,117, suggesting that despite attempts to improve the handling of the pandemic, more people are continuing to leave.
However, this trend has obviously not gone unnoticed by landlords and real estate brokers. As the number of empty apartments continues to go up, rent prices have dropped dramatically to perhaps entice more people to return. In fact, the median net effective rent in the city has tumbled down by an impressive 19%. That decline translates to a median net effect rent of $2,868. Another major development is the fact that now on average, landlords are offering more than two months of free rent in new leases, and over 60% of new leases in October included some type of incentive or discount. Landlords are offering on average 2.1 months of free rent over the course of a year-long lease as opposed to 1.2 months a year ago. These incentives seem to finally have broken through for many New Yorkers providing hope despite the rising vacancies.
Signs of Hope in October
While vacancies did in fact continue to rise, there have been some positive signs both in rentals and sales across New York. In October, there was a surge in new rentals in Manhattan for the first time in over a year. Manhattan actually saw a 33% increase in new leases last month, which represents the best October in 12 years.
According to Miller Samuel Real Estate Appraisers & Consultants, “The influx of new lease signings occurred due to increasing affordability since the beginning of the pandemic last spring.” These developments in the real estate market have also been translating to sales as well, where contracts during the first ten days of November rose by 21%.
October 2020 in Manhattan represents a time with the highest number of empty apartments in 14 years. This outcome is certainly a difficult pill to swallow, especially as COVID-19 cases have begun to creep up once again. However, the increases both in new rentals and new sales contracts suggest that the trend is slowly beginning to turn. With vaccine news and the overall recovery of the city as a whole continuing to stoke interest from those who had left, there is an expectation that the real estate market will finally begin to rebound going into the new year.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.