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The COVID-19 crisis stifled rental activity in Manhattan and Brooklyn during Q2, as vacancy rates reached the highest levels in at least 13 years.
During the month, the downward trend for average rents in both boroughs continued, with Manhattan experiencing the most dramatic rent declines. Incentives remain a key method for building owners to create value in the marketplace, and the monthly vacancy rate spiked to the highest level since we began tracking this statistic in 2007.
COVID-19 and resulting economic issues continue to have a profound effect on the New York City rental market. Now that agents have resumed in-person work, we expect a clearer picture of market conditions to develop in the coming months.
From May to June, rents for Manhattan studio apartments declined 16%. For one-bedroom units, pricing fell 10%. Meanwhile, rents were down 14% and 7% respectively for two- and three-bedroom homes.
Across the board, Manhattan rents also fell year-over-year. The most notable decline was for studios, where rents fell 12% since June 2019. Three-bedroom units experienced the smallest decrease in pricing – rents for this category were down 4% since last year.
In Brooklyn, rents were down 4% month-over-month for studio units, while they fell 3% for one-bedroom homes. Meanwhile, pricing for three-bedroom apartments declined a slight 1%. In contrast, pricing for two-bedrooms rose 2% in the borough.
Year-over-year, Brooklyn rents remained relatively unchanged for studio and one-bedroom homes. However, they declined 2% for two-bedroom and 11% for three-bedroom units.
When examining concessions, 46% of rental transactions brokered by The Corcoran Group offered a free month’s rent and/or payment of the broker fee to entice new tenants in June 2020 – up from 38% in May.
In June, the Manhattan vacancy rate was 2.58% – up from May’s rate of 1.77%. This is highest rate charted since we began tracking this statistic in January 2007. The previous high was in February 2009, when the rate reached 2.46%.
Additional relevant findings of the June 2020 Corcoran rental report are outlined below.
- In June 2020, the average monthly rental price for a Manhattan studio was $2,090. For one-bedroom homes, the average was $2,772. For two-bedrooms, the average rent was $3,865. Finally, the average three-bedroom apartment rented for $5,880.
Brooklyn studio apartments (in the 14 neighborhoods studied) rented for $2,512 per month on average. For Brooklyn one-bedrooms, the average rent was $3,075 – while rents for two- and three-bedrooms clocked in at $3,973 and $4,690 respectively.
- The most expensive Manhattan neighborhood for renters in June was Chelsea with a median rent of $4,000. Murray Hill was the second-priciest area – with a median rent of $3,938. Please note, due to limited activity, SoHo/TriBeCa was not included in this month’s analysis.
For Brooklyn, DUMBO was the most expensive neighborhood in June with a median rent of $4,290 – followed by Brooklyn Heights, where the median rent was $3,700 per month.
- With a vacancy rate of 1.78%, the Financial District/Battery Park City was the Manhattan neighborhood with the least inventory in June 2020, followed by Murray Hill at 2.01%. On the other end of the spectrum, the vacancy rate was highest in the East Village (at 5.03%) and Chelsea (at 3.41%).