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Manhattan apartment rents nearly doubled in December

A man enters a building with a rented apartment on August 19, 2020 in New York City.

Eduardo Munoz Alvarez | Watch Press | Corbis News | Getty Images

Manhattan apartment rents nearly doubled in December, signaling a possible recovery in the struggling city̵

7;s real estate market.

The number of new leases signed in December rose to 5,459, a 94 percent increase over the previous year, according to Douglas Elliman and Miller Samuel.That profit increased the most in nearly a decade and for the third straight month. Set aside the profit from the lease year on year

“It’s the first step in the right direction,” said Jonathan Miller, CEO of the Miller Appraisal and Research firm Samuel. “The metrics are still very weak. But at least it shows that there is a need. “

The reason for the increase in rent is the continued decline in prices. The effective net average rent, or rents people actually pay, plus discounts and incentives – fell 17% in December to $ 2,800 per month. Landlords offer free rent on average two months to lure tenants, with a number of other offers.

Brokers say three groups are driving demand. First of all, city dwellers use the sale to upgrade to larger apartments or newer. The second group includes New Yorkers who left during the first part of the outbreak in March or April. But now it’s back, a third group – couples and families – who sells suburban real estate to get higher prices and is testing the urban waters for the first time, which are getting better value.

Realtors and homeowners say a full recovery in Manhattan real estate should be a long way to go. Even if the price goes down and the rent increases But Manhattan still has a near record number of empty apartments. There were 13,718 apartments in December, two and a half times more than last year’s total, a 5.5 percent vacancy rate, almost three times the former Manhattan average, according to Miller’s data.

Many home and building owners are keeping their apartments empty from the market for fear of a growing oversupply. Miller said, “Shadow inventory” or “managed inventory” means that the number of un-rented empty apartments in Manhattan is likely to exceed 20,000.

“I think we’re in a warm-up,” he said.

Most rent gains have been driven by wealthier tenants as most high-income earners escape the economic impact of the epidemic, while lower-wage workers and service workers. Suffered the most pain Rent of three-bedroom apartments, which rents on average $ 8,000 per month, increased 171 percent in December compared to the previous year, according to the report.

In the meantime, effective rents for the smallest studio apartments were down 19% and saw a much less profitable new lease.

High-end strength, fueled in part by a soaring stock market, has also appeared in the market for apartment sales. While overall apartment sales fell 21 percent in the fourth quarter, sales of apartments costing more than $ 5 million were up 23 percent compared to the same quarter a year ago.

“It reflects a pattern of unemployment,” Miller said. “People with lower incomes are affected harder”

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