Corona crisis: rents in Manhattan are falling significantly

The corona crisis is making it increasingly difficult for apartment owners in the US metropolis of New York to find tenants. Although prices in Manhattan fell rapidly during the pandemic, there have recently been as many unlet apartments as there have been in years. The vacancy rate rose in August compared to the previous year from 1.95 to 5.1 percent, as a new market report by real estate broker Douglas Elliman Real Estate showed on Thursday. The number of open advertisements was 15,025 apartments, almost three times as high as a year ago. It is the highest value measured since the series began 14 years ago.

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Analyst Jonathan Miller, who created the study, blames the corona pandemic for the sharp rise. Without the cultural advantages, such as the famous gastronomy or art scene, Manhattan would lose a lot of its appeal, explained the market expert in the New York real estate blog “The Real Deal” with a view to the months-long lockdown. If this factor is absent, the willingness to spend a lot of money on relatively little housing decreases and many people emigrate. According to evaluations of cell phone data, hundreds of thousands left New York City in the wake of the devastating Corona wave in March.

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The consequences of this development are leaving deep marks on the real estate market. The lower demand for apartments has already led to strong price discounts. According to the study, rents in Manhattan were on average 7.7 percent lower last month than a year ago. 54 percent of landlords are willing to make concessions such as taking over brokerage fees or waiving monthly rents in order to get rid of their apartments. Such incentives are almost unthinkable in normal times, at least in more sought-after areas of Manhattan.

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Despite the strong discounts, New York’s most densely populated district remains very expensive in an international comparison and is still anything but a bargain for many people from the metropolitan area. The average monthly rent for a so-called studio – a one-room apartment with a fitted kitchen or kitchenette – fell 8.6 percent in August, but was still $ 2,574. The fact that the pandemic-induced emigration has such a strong impact on the housing market is also due to its fast pace. In contrast to Germany, long-term rental contracts are not common, they are often limited to one year.

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