The vacancy rate for New York’s rental apartments could soar from a current 3.8 percent to more than 11 percent by the end of 2018, according to a new analysis. The culprit: a surge in new construction.
“It seems inevitable that you are going to see some pain in the market,” Ten-X chief economist Peter Muoio wrote. The firm also predicts rents will fall as more new apartments hit the market, citing a slowdown in job growth that is likely to hurt demand.
Still, Ten-X, an online real estate marketplace, noted that widespread distress is unlikely because debt levels are low, the Wall Street Journal reported.
Real estate data company Reis issued another prediction, claiming the vacancy rate could rise to a more modest 6.1 percent by the end of 2018 and that rents would continue to grow, albeit at a slower pace. Reis’ Barbara Byrne Denham argued that the high price of condos and co-ops would force New Yorkers to stay in the rental market and push up demand.