The residential vacancy rate in Manhattan rose to a three-year high in August as rents continued to escalate, according to Citi Habitats, the city's largest rental brokerage.
The vacancy rate rose to 1.19 percent in August from 1 percent in the previous year in buildings tracked by Citi Habitats. Meanwhile, the average apartment rent rose to $3,461 in August, higher than the 2007 peak of $3,394.
Gary Malin, president of Citi Habitats, told Bloomberg that high rents were causing more renters to avoid the Manhattan market. New Yorkers can find lower rents in outer boroughs like Queens and Brooklyn. Fewer tenants could lead to some landlord concessions like lower rents or payment of a broker's fee, said Malin. August is seasonally the most active month for rentals as returning students sign leases, while the winter months are slower, which could motivate more landlords to act.
Rents for studios gained 1 percent from the prior month to an average of $2,092. One-bedroom rents fell 1 percent to $2,785, while two-bedrooms increased 1 percent to $4,032, and three-bedrooms were flat at $5,320, according to Citi Habitats. The Upper East Side had the highest vacancy rate of 1.38 percent, while the Gramercy neighborhood had the lowest rate at 0.76 percent.
Slightly lower demand in the rental market has not had a significant impact on the sales market, according to data from appraisal firm Miller Samuel Inc. and brokerage Prudential Douglas Elliman Real Estate. There were 2,647 Manhattan co-ops and condos sold in the second quarter, a figure that was flat compared to the same in the prior year. The median sales price was down 2.5 percent to $829,000 as more entry-level, lower-priced units were sold.
Strict mortgage lending standards and unease about the economy has dampened the for-sale market, as buyers remain wary of long-term commitments. But low interest rates and continued high rents could motivate more people to buy.