The 16,000 jobs that Manhattan employers are expected to shed this year will help by the end of 2008 drive the borough’s apartment vacancy rate up to 2.8 percent for larger buildings, according to a report from Marcus & Millichap.
The rate could rise even further in 2009 ("further" being a relative term in Manhattan, which traditionally has the nation’s lowest apartment vacancy rate). The City Comptroller’s office last week predicted New York would lose over 165,000 private-sector jobs in the next 24 months. Higher unemployment usually means less demand for apartments. Less demand generally means lower rents–over time. So far, despite several consecutive quarters of iffy economic news, Manhattan apartment rents have stayed generally steady.
The Marcus & Millichap report also concluded that apartment development will produce nearly 1,500 new units in Manhattan this year.