Record-High Vacancies and Rent Rates Suggest Lenient Leases in Winter

Written by NY Press on . Posted in Breaking News.

By Naomi Cohen

Photo by Matt Hintsa

As Manhattan apartment rents are reaching an all-time high, landlords are signing fewer leases in a usually busy month. With vacancy rates averaging 1.19% in August—the widest rate since 2009—a breaking point may be approaching this winter, according to Gary Malin, president of City Habitats, the real estate company that published the report.

The trend can be linked to tougher mortgage-lending standards and weak consumer confidence, Jonathan Miller, president of appraisal firm Miller Samuel Inc., told Bloomberg. High unemployment rates have also been hindering New Yorkers’ ability to buy, so demand for leases has been increasing. Though depreciation is very likely, Malin said he still foresees expansions in rental growth over the year.

Manhattan is America’s most expensive city, according to the Council for Community and Economic Research, and Brooklyn is number two. In August 2012, a Manhattan apartment went for an average of $3,461—that’s 2 percent higher than the peak in 2007 and the highest rate since Citi Habitats’ first report in 2002. Rental growth has been gradual, though, with August rates $2 higher than in July. According to the council, cost of living is 133.5 percent higher in Manhattan than the national average, with about 29 percent of income paying for rent.

The steady climb in prices, though, is contributing to the best conditions in months for scouting apartments. Marlin told the Daily News that “incentives will likely creep back.” Since the winter months are tougher for rentals, landlords may be more lenient.

Vacancy rates are highest in the Upper East Side at 1.6 percent, followed by the Upper West Side at 1.58 percent, and rates are lowest in the Gramercy area at 0.76 percent. Manhattan’s average for the month last year was 1 percent and 1.1 percent the year before.

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