Manhattan’s Real Estate Market Suffers Amid the Pandemic

“For rent” sign in Kips Bay, New York / Photo by Lylia Saurel

By Lylia Saurel | Nov. 19, 2020

Seven months after coronavirus cases peaked in New York City, Manhattan’s real estate rental and sales market continues to suffer due to the thousands of residents who have left the borough.

Jonathan Miller, market analyst and CEO of the real estate company Miller Samuel Inc., said one of the reasons residents first left was because they lacked access to things that make the city attractive, such as cultural activities and the transit system. “They no longer offset the smaller living space and the higher rent,” he said.

A report prepared by Miller Samuel Inc. for real estate company, Douglas Elliman, found that the vacancy rate in Manhattan reached 5.75 percent in September, a record for the fifth consecutive month. Miller said there were nearly 16,000 apartments for rent in Manhattan. “That’s about triple over last year’s levels,” he said.

The median rental price dropped in Manhattan as well to $3,036 by the end of September compared to  $3,411 in the same month of last year. In October, it slipped to $2,350 in Upper Manhattan, according to a StreetEasy report.

Yet cheaper rent wasn’t enough to keep Megan Tong, 33, and her partner in Manhattan. The couple lived in Hamilton Heights for two years and they had talked about leaving the city for a while. “The pandemic was kind of a catalyst for us,” Tong said.

They first searched for a home in the Hudson area, ultimately closing the deal on an 18-acre property in northern Westchester County — within commuting distance from the city.

As a software engineer, Tong had no problem adjusting to working remotely. “When my company made an announcement that work from home was going to be permanent, that’s when we decided to go for it and buy a full time house instead of a weekend house,” she said.

Westchester County, which saw a 56 percent increase in new contracts compared to last year, offers larger spaces and proximity to nature, important qualities for the couple. “Every weekend when we lived in New York we would leave to go hiking and ride horses, and now we want that to be our normal life and the city is the weekend thing that we do for fun,” Tong said.

The increase in vacancies in Manhattan means better deals for those who decided to stay.

Anthony Paquin, 29, vice president of sales for a healthcare supply company, and his girlfriend were first offered a 10 percent deduction of their rent, but they decided instead to move out of their one-bedroom apartment in Kips Bay to a bigger one-bedroom in the same neighborhood. “We can be more selective in the requirements of the amenities that we want, whether it’s a small thing like a dishwasher or a rooftop, outdoor space and a gym. We aren’t at the mercy of the market,” he said.

Their new place, Paquin said, “is roughly 10 percent more expensive. In pre-COVID times it would be closer to 75 percent.”

While Manhattan might no longer be appealing to many, for Paquin, who grew up in Ohio, the pandemic did not make things bad enough to leave. “As long as that perseverance mentality continues in New York City, I don’t want to be anywhere else,” he said.