December apartment vacancy rates continued to climb, despite landlord efforts to tempt end-of-year renters.
According to Citi Habitats’ year-end market report, the Manhattan vacancy rate rose to the highest level in nine months in December.
While the numbers are impacted by the traditional holiday season slump, the brokerage said the rise in vacancy is also due to continued price-sensitivity by apartment seekers.
Manhattan rents fell one percent from November to December 2018. In Brooklyn, rents for studios also fell one percent while the drop was slightly less for one-bedroom homes. Pricing for three-bedrooms was down two percent in Brooklyn, while rents rose percent for two-bedroom apartments.
“In December, many property owners in both Manhattan and Brooklyn lowered rents slightly – in an attempt to spur activity during the traditionally slow holiday season,” said Citi Habitats president Gary Malin.
“Despite these adjustments, the vacancy rate continued to climb, illustrating the ongoing disconnect between the rents that landlords want to achieve and the pricing tenants are willing to pay.”
However, Malin believes there are great values in today’s market for apartment seekers — if they are willing to explore new neighborhoods and building types. Now more than ever, it pays to keep an open mind,” he added.
Overall, rents continue to trend downwards, but are still higher than last year. Rents for all apartment sizes in Manhattan decreased during Q4 2018 when compared to Q3, but they rose across the board in Brooklyn during the same period.
The Manhattan vacancy rate climbed to 1.53 percent during Q4 – from 1.35 percent in Q3. However, it is lower than Q4 2017’s rate of 2.16 percent.
Despite the recent increase in inventory, the market is still tighter than last year.
During Q4 as a whole, 30 percent of tenants received a landlord inventive, up from 27 percent last quarter.
In contrast, their use declined when compared to Q4 2017 – when a full 43 percent of new leases included a concession.