Manhattan apartment rents fell as much as 5.9 percent in March from a year earlier as a record jump in unemployment damped demand, Citi-Habitats Inc. said.
Average rents declined for apartments of all sizes and the vacancy rate topped 2 percent for the fifth straight month, the New York-based property broker said today in an e-mailed statement.
Demand slumped after New York City’s unemployment rate climbed to 8.1 percent in February, the highest level since October 2003 and the biggest month-to-month increase on record. City Comptroller William Thompson predicted in March that New York City would lose 250,000 jobs before the recession ends.
“There are people who are unemployed, and people not willing to spend the type of money they were willing to spend before and they need to make tough decisions,” said Gary Malin, president of Citi-Habitats.
Rents for studio apartments dropped 2.1 percent to an average of $1,812, while those for one-bedroom units fell 5.9 percent to $2,595. The cost of renting two-bedroom homes declined 2.2 percent to $3,631 and three-bedrooms fell 1.6 percent to an average of $4,670.
The average declines for March don’t reflect concessions offered by landlords, such as a free month’s rent, that lower the overall cost to tenants, Malin said.
“There is a greater degree of price decline than those numbers show,” he said.