Manhattan rents drop, vacancy rate increases in 2009: annual report
Citi Habitats today released its annual “Black and White” report, analyzing the Manhattan rental market for 2009.
The report, which is based on Citi Habitats’ rental transactions, found that average rents in 2009 were roughly 7 percent less than in 2008, while the vacancy rate peaked in February at 2.46 percent and had declined to 1.84 percent by December. The overall average vacancy rate for 2009 was 1.93 percent, up from 2008’s 1.42 percent, according to the report.
Studios in Manhattan rented for an average of $1,757 in 2009, down 6.7 percent from $1,834 in 2008, according to the report. One-bedrooms went for $2,406, a drop of 6.7 percent from $2,608 in the previous year. Two-bedrooms averaged $3,411, 7.8 percent less than $3,700 in 2008, and three-bedrooms were $4,560, down 6.9 percent from $4,898.
February was a low point, when the aftershocks of the Lehman Brothers collapse were being keenly felt and “people were the most fearful,” said Gary Malin, president of Citi Habitats.
But with rents decreasing, things started to improve as rental agents kept busy with clients moving into Manhattan who couldn’t previously afford it, or moving to bigger apartments to take advantage of better deals. Citi Habitats ended up renting roughly 12,950 apartments in 2009, the largest number in the company’s history.
“People started to say, ‘Manhattan’s more affordable, there are good deals out there, now I can move to Manhattan,’” Malin said.
Now that the economy appears to be on the mend, however, tenants don’t need to fear sudden and drastic price increases, he said. In part, that’s due to continuing high rates of unemployment.
“There isn’t going to be a sudden 15 percent increase over night,” Malin said. “Landlords know if they did that they would lose their tenants. They are going to have to do it step-by-step.”
The report contains other fun facts, like the average age of a renter in Manhattan (32) and the number of Manhattan renters with pets (5 percent.) Many older Manhattanites buy homes or move to the suburbs, Malin said.
Some 37 percent of Citi Habitats’ renters in 2009 earned an income of $50,000 to $99,999, the report says, while 18 percent make between $100,000 and $149,000. Twelve percent make less than $25,000, another 12 percent make between $25,000 and $49,999, and 12 percent make $150,000 to $249,999. Only 9 percent make over $250,000.