The consequences of quarantine: in New York, a record few willing to rent a house

The number of free residential space for rent in Manhattan has reached the highest level over the past 14 years. A similar situation is also observed in Brooklyn and Queens. This publication writes TRD New York.

The number of vacant space per Manhattan reached the highest level in the 14-year history of the monthly Douglas Elliman rental report. Last month, rental activity in the area decreased by 62% compared to last year. She was also 54% lower in Brooklyn and 61% lower in Queens.

True, the situation in April was even worse, says report author Jonathan Miller. He believes that the parties are beginning to adapt to the new reality that arose against the backdrop of the pandemic, moving "from a paralyzed regime to a" think about the future "regime.

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There have been more vacant apartments in Manhattan last month than in any other month since Miller began tracking the market in August 2006. The vacancy rate increased from 1,65% over the same period in 2019 to 2,88%. In April, it was 2,42%.

Miller explained the decline in interest in the real estate market: “As people lose their jobs or move from the city to the suburbs, it is more and more difficult to fill these apartments.”

Despite the growing number of vacant premises in Manhattan, rents here have remained unchanged. The rental price in May amounted to $ 3415, practically unchanged from $ 3413 a year earlier. In Brooklyn, rents last month were 3,3% higher than a year ago - $ 2 versus $ 921.

True, last month landlords tried to lure customers: in 42% of Manhattan deals, owners made various concessions. For example, they paid brokerage fees, compared with 34% a year ago. The size of the concessions was equivalent to 1,5 months of free rent, compared to 1,2 in 2019.

В Brooklyn the share of discounted transactions increased to 33% compared to 32,6% in May 2019, an increase of 40 basis points. The size of the concessions rose to the equivalent of 1,4 months of free rent from 1,3. Despite the fact that the income for tenants was small, for the first time in 17 months the number of Brooklyn landlords offering benefits increased.

Queens overcame this trend: the average rental price fell by 5,6% to $ 2745 from $ 2 a year ago, although the number of landlords offering benefits soared to 908% from 65%. The cost of the proposed concession rose to the equivalent of 33 months of free rent from 1,8 months.

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Miller said it was "too early" to talk about a big rent cut, but noted that May rents were lower than in April in all three boroughs, indicating a "step back." According to him, with the decrease in the new lease volume, most of the price discounts or lease payment deferrals in May occurred as part of an extension or in negotiations between landlords and tenants. "The action, so to speak, takes place on the private side," Miller explained, noting that landlords and tenants were "stuck in the same boat, or stuck in the same apartment."

He attributed the drop in rental activity partly to the inability of agents to show apartments, and partly to the sudden onset of a pandemic. “We're mostly on hold, but this will be over pretty quickly,” Miller said.

Agents will be able to start showing apartments in New York as part of the second phase of quarantine lifting. At best, this will happen on June 22, although New York Mayor Bill de Blasio previously stated that he did not expect this until July.