The vacancy rate for Manhattan rentals reached 1.2 percent in July, the highest level since March’s 1.25 percent, according to a report released today by real estate firm Citi Habitats. This is the second consecutive month in which rental inventory increased, which is unusual for the traditionally busy summer moving season; in June, the vacancy rate was 1.01 percent. By comparison, in July 2011, the vacancy rate was 0.86 percent.
Unfortunately for apartment hunters, July rental prices also creeped up, according to the report. The average rent for a Manhattan apartment was $3,459, about a 3-percent increase from July the previous year and 0.5-percent increase from June’s average of $3,443 a month.
Citi Habitats president Gary Malin said that the upward trending in vacancies could be explained by New Yorkers choosing to buy or price-conscious young renters delaying moving into the city. “Many college students, who in the past may have opted to move to Manhattan early to spend summer in the city, are now finding that prospect cost-prohibitive,” Malin said in a statement. “While still relatively low, this uptick in vacancy during the peak summer season may be a sign that rents have approached their tipping point.”
The vacancy rate in the borough will most likely drop in August due to pent-up demand, pushing renters to cheaper housing in Brooklyn and Queens, Malin told The Wall Street Journal.
The boosted demand for space in the other boroughs will spur new development there, which is “better for everyone in the long run,” Mr. Malin said to The Wall Street Journal. “But the truth is, we need more housing.”