An unusually hot summer seems to be cooling off Manhattan’s market for rental apartments. In July, the vacancy rate rose 0.19 percentage points from the previous month, to 1.2%, in an unusual uptick for the normally busy summer season, according to the latest monthly rental report released Thursday by brokerage Citi Habitats.
July marked the second consecutive month to see a rise in vacancies, a two-month run that brought them close to the levels of March, the report noted. In contrast, in July of last year, the vacancy rate stood at 0.86%.
“Normally you don’t see vacancy rates creep up during the summer,” said Gary Malin, president of Citi Habitats. “People are postponing their moves.”
Rising rents may have something to do with that. Average Manhattan rents set yet another record in July, hitting $3,459 a month, up 3% from the same time last year. The average monthly rent for a studio hit $2,078 in July, while average one- and two-bedroom apartments’ rented for $2,812 and $4,001, respectively.
Those kinds of prices are prompting some folks to wait before renting and others to buy rather than rent, Mr. Malin says. Nonetheless, he does not expect landlords to start slashing rents any time soon. In contrast, he notes that rents have been breaking records each month since March.
With the busy rental season coming to a close in August, landlords are taking more risks and “feel more power to keep rents where they are,” said Mr. Malin, adding that he is still hearing from his agents that they are still very busy.
Some others however disagree when it comes to the outlook.
“There is a spike in vacancy because people simply can’t afford it,” said Gus Waite, a local rental broker and cofounder of RentingNewYork.tv, a video website about renting apartments in the city. He predicts that rents will flatten out and come down in the fall.