By: Hellen Zaboulani
Manhattan was the bustling city known for its lack of housing. The COVID-19 pandemic is working overtime to change this dynamic.
As reported by CNBC, the number of empty apartments for rent in Manhattan jumped to their highest level in recent history, hitting over 13,000, as residents bolt the Big Apple for the suburbs. Landlords are now scrambling to land new tenants.
The number of apartments for rent, or listing inventory, more than doubled since last year, setting a record for the 14 years since data has been collected, as per a report by Douglas Elliman and Miller Samuel. The number of apartments listed available for rent hit 13,117, while the number of new leases inked declined by 23 percent. July alone saw a 10 percent drop in rental rates, which was the steepest in nearly a decade.
Landlords are currently offering perks including an average of 1.7 months of free rent in an effort to attract tenants, which is also a recent high, as per the report. New renters are also being offered gift cards to Home Depot and other retailers, initial cleaning services, and no broker fees, brokers say. When the pandemic first hit, hundreds of thousands of residents left the city. Landlords and brokers were not alarmed at first, as they expected people would start coming back in July and August, as the lockdown eased. Normally, July and August are the busiest rental months in the year, as families prepare for school. This July’s record weakness, coupled with what brokers say is already a sluggish August, are now leading Manhattan’s real estate experts to worry that the economic woes may likely be prolonged into the fall or beyond.
“The outbound migration is higher than the inbound migration right now,” said Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.
This all comes despite the fact that the effective median rent, which is the average rent with concessions, already dropped 10 percent since last year, as per Miller. All parts of the market, high end to low end, fell. All Manhattan neighborhoods experienced a deep decline in new leases. The hardest hit was the Upper East Side, which had a 39 percent drop in new leases. “This could be a difficult couple of years for landlords,” Miller said.