It may still feel like the worst of times for New York City’s rental market — but months of decline in new activity is finally leveling off.
Manhattan’s vacancy rate reached 3.67 percent in June, marking a 14-year high in Douglas Elliman and Miller Samuel’s monthly rental report. May had set a new record, with the rate hitting 2.88 percent. Listing inventory also reached record levels last month, with an 84.7 percent year-over-year jump to 10,789.
However, the plunge in new leases witnessed in April and May — when declines largely exceeded 60 percent — began to level off. Activity in Manhattan and Queens was down 36 percent and 35 percent in June from a year ago, respectively. Brooklyn only saw a 9 percent drop.
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“Nobody thinks we’re going to suddenly restore to where we were before the pandemic,” said Jonathan Miller, author of the report. “But the idea that in September only five people will be living in Manhattan is a false narrative.”
“The situation is now less perilous,” he added.
Additionally, the exodus of people from the city likely slowed as the pandemic continued to recede locally — and those with means to leave already had.
The five boroughs entered phase 2 of reopening on June 22, allowing brokers to resume in-person showings. But that did not provide “enough time to have a material influence on market conditions for the month,” according to the report. New York City entered phase 3 on Monday.
How much the rental market picks up through the end of the summer will reveal whether new social distancing measures prove a burden to closing transactions, and the extent of economic harm done by the virus, which put downward pressure on pricing.
The median rental price in Manhattan decreased 6.6 percent to $3,242 in June from last year. In Queens, the median rental price was $2,560, down 8.2 percent year over year, and Brooklyn saw a slight increase in prices to $3,050, up 1.7 percent.
At least through the months of June, when showings remained mostly virtual, landlords were more willing to cut deals to secure renters.
In Manhattan and Brooklyn, the size of concessions rose to 1.5 months from 1.3 and 1.2 months a year earlier, respectively. In Queens, it rose to 1.7 months, up from 1.2 from a year ago.
Contact Orion Jones at orion.jones@therealdeal.com