For the first time in six months, the Manhattan vacancy rate has dropped slightly, according to the Corcoran’s latest report on Manhattan and Brooklyn rents. However, rents throughout both Manhattan and Brooklyn’s apartment types increased from December 2019 to January 2020.
In a month’s time, rents for Manhattan studios and two-bed units increased by 3 percent while rents for one-bedroom apartments saw a 1 percent increase. According to the report, Manhattan’s three-bedroom units saw the largest boost with a 4 percent increase.
The average monthly rates for Manhattan in January ranged from $2,635 for a studio to $6,217 for a three-bed unit. Looking at specific neighborhoods and its January rents, the SoHo/TriBeCa submarket secured the highest median rent at $6,250, while Washington Heights was the most affordable at a median rent of $2,020.
Similarly, Brooklyn rents rose across the board from December to January. The borough’s studio and three-bedroom apartments rose 2 percent whereas its one- and two-bedroom units slightly increased 1 percent.
Brooklyn studios saw an average rent of $2,571 in January, while its three-bed units hit $5,438. In January, the trendy DUMBO neighborhood earned the top spot with a median rent of $5,710, while Bushwick was the least expensive with a median rent of $2,600.
As rents rose throughout Manhattan and Brooklyn in January, so did the number of concessions offered. In January, 34 percent of the rental transactions brokered by Corcoran included a concession, whether it was a free month’s rent, payment of the broker fee or both. The percentage was up from December’s 29 percent, but only 1 percent higher than the same time last year.
Though, concessions were far more common in Brooklyn with half of the leases in January offering a concession while Manhattan only saw 28 percent of leases with concessions.
January also saw the first decline in vacancy rate in Manhattan in six months. According to the report, Manhattan’s vacancy rate came in at 1.3 percent, down from December’s 1.4 percent.
Gary Malin, Corcoran’s chief operating officer, told Multi-Housing News that both the rising rents and the vacancy rate decline are likely due to “pent-up demand.”
“The business always has its ebbs and flows so once you get to November-ish, there’s holidays, vacations and trips where peoples’ attention gets diverted to other things so the business naturally slows down,” Malin told MHN. “But once you get to January, you have all that pent up demand.”
Malin told MHN that the numbers are likely to slow down again, as February is historically a sluggish month for the rental market, before picking up during the summer months. He also told MHN that with more demand during the summer months, property owners may likely be more conservative with incentives depending on how the market looks at the time.