Signed an advertising apartment rental in the Upper East Side of New York.
Adam Jeffrey | CNBC
Manhattan real estate may be turning, as new rents have increased for the first time in more than a year, and sales activity has started to climb after the collapse of Covid.
The sharp drop in rental prices seems to be attracting new, younger tenants to return to the city, even if office workers and wealthy New Yorkers remain in the suburbs and more rural resort towns. According to a report by Douglas Elliman and Miller Samuel, new leases in Manhattan increased by 33% in October, making it the best October in 1
The average rent for apartments including discounts, or the median net effective rent, dropped by 19% from the same period last year to US$2,868, a record high. Small apartments that cater to young tenants saw the biggest decline. The price of a studio apartment fell by 21%, and the price of a one-bedroom apartment fell by 19%.
Miller Samuel (Miller Samuel) CEO Jonathan Miller (Jonathan Miller) said: “I think we are at a turning point where consumers are starting to return to the city.” “Sellers are slowly re-adjusting their value, and Lower prices are beginning to attract more people.”
Manhattan real estate still faces major challenges. There were 16,145 apartments for rent in October, a record high. The vacancy rate usually hovers around 2% and is now over 6%. All these vacant apartments mean that the landlord will have to continue to reduce rents and provide incentives for people to return to the city.
The report said that, on average, landlords offered free rent for more than two months, and more than 60% of new leases in October had some form of incentives or discounts. The average residence time of apartments in the market was 33 days, compared with 26 days a year ago.
However, even after the bleak spring and summer, the Manhattan sales market began to fluctuate. The agent said that the election and the latest news about vaccines triggered a surge in buyers’ displays, inquiries and interest. Garrett Derderian, director of market intelligence at the brokerage firm Serhant, said that sales contracts from November 1 to November 10 increased by 21%.
Although the price decline in the sales market is not as large as the rental market, the broker said that even a discount of 5% to 10% of the sales price is enough to attract buyers who have been waiting for a better entry point into Manhattan real estate for years . .
Derderian said: “The market may have reached a turning point now, the uncertainty surrounding the presidential election has passed, and a vaccine may emerge.” “Many buyers have been on the sidelines because of falling prices and increased negotiations, they seem to be ready to enter the market, and Many buyers already know that once a vaccine is discovered, the market will change again.”
Manhattan may still face a severe winter, more cases of the virus, and the company is more willing to place most of its employees in remote areas. New York City and New York State are facing high unemployment rates and billions of dollars in budget loopholes that must be caused by tax increases, service cuts, or a combination of both, all of which may make the city attractive to buyers reduce.
Moreover, the average rental price of a one-bedroom apartment is still more than $3,200, more than twice the national average, so Manhattan is still unaffordable for many young tenants. However, experts say that October’s gains in the largest real estate market in the United States may begin a long and slow recovery.
Miller said: “To make New York come back, there will be many things to do.” “This will be a multi-year process.”