Manhattan is experiencing a record-high vacancy rate along with a record-high rental inventory, according to the latest Douglas Elliman rental report from appraisal firm Miller Samuel.
Available rentals hit a new high in the borough's housing market, surpassing July's figure of 13,000 that Business Insider previously reported. August's figure of 15,025 is 14.5% higher than July and 166.2% higher than the 5,645 rental inventory from a year earlier. The report notes that another month of a drop in new lease signings contributed to this large figure.
These are record figures for the 14 years since the firm first started tracking this data. The firm also found there is a record share of landlord concessions, or incentives to sign a lease, in Manhattan over the decade for which the firm has tracked this data, at 54.2%.
As Business Insider previously reported, incentives may include some period of free rent, such as the typical 1.9 months of free rent in Manhattan from the latest report.
Manhattan's vacancy rate of 5.1% marks the fourth-straight record month and the first time ever crossing 5%.
Based on Manhattan's rental inventory data provided by Miller Samuel, Business Insider calculated the percent changes from one year to another since the end of 2011. The following chart shows that the year-over-year difference has grown much larger in the months during the pandemic than earlier years.
Brooklyn also has a high number of empty rentals compared to last year. The August report shows that the borough's nearly 4,000 rentals increased by 6.9% from July and 130.5% from last August. Northwest Queens had 642 available rentals in August but did not see as large of a year-over-year change in its rental inventory. The borough saw a year-over-year change of 78.3% and a decrease of 0.9% from last month.
Jonathan Miller, president and CEO of Miller Samuel, told Bloomberg in an interview that "Until we see a stabilization in outbound migration or some impetus to bring people back, we're looking at more softening rents to come."
Miller told Business Insider that some Manhattan residents left back in March and April and right now there's "not an incentive to return" due to reasons like uncertainty whether schools will remain open and the ability to telework.
People in New York City have been leaving to nearby suburbs amid the pandemic, according to reporting from The New York Times. This left a large number of vacant apartments in the city.
Despite the high level of available inventory in Manhattan, Miller said one of the reasons the rental market is soft right now is because "consumers that might have been eventual renters pivoted to home buying," but he is seeing evidence that contract activity in the suburbs is beginning to plateau.
Miller said that it is "certainly possible" to see another record high in rental listings as demand in the city is low right now.
"What is going to change [the lack of demand] I think is a longer issue," Miller told Business Insider. "And one of the milestones is going to be when there's a vaccine, and until that it's just a lot of uncertainty."
New signed contracts have also climbed after reaching lows in the middle of the pandemic. However, these are still below the level from the previous year.
