New York Furnished Apartment Market Report: 1st Half 2010

3.  1st Half 2010 Vacation Rental Prices

Average Price of Vacation Rentals in the 1st half 2008, 2009 and 2010

The average price of vacation rentals in New York is one of the typical measures used to determine the state of the market. For the 1st half of 2010 the average price of vacation rental accommodations fell by 2% from $171 per night in the 1st half of 2009 to $168 per night in the 1st half of 2010. This is because many hotels were offering competitive rates to attract customers and therefore, vacation rental owners needed to be offering good values to encourage customers.

Based on our analysis last year, we expected that prices of vacation rentals would need to further decline to help with demand, and with a drop of $16 per night (9%) the amount of rentals has begun to increase again. Looking to the future, we are not sure what will happen to prices of vacation rentals. If new state laws prohibiting vacation rentals are actually enforced starting next May, then prices may take a nose dive because real estate agencies like New York Habitat will no longer be able to offer vacation rentals and apartment owners will be forced to offer their product "underground" if they decided to keep renting their properties.

Average Price of Vacation Rentals in the 1st half of 2008, 2009 and 2010 by Apartment Type

Looking at average prices by type of vacation rental, we can see most types of vacation rentals saw a decline in average prices with the exception of studios. The prices of one, two-bedroom apartments fell by around 5% from 2009 to 2010 while larger apartments saw a decline of nearly 10%. Studios gained 3% on average. Prices of all types of apartments remain less expensive than in 2008 which was a banner year for vacation rentals in New York.

Average, Median and Mode Price in the 1st half of 2008, 2009 and 2010

Though prices of larger apartments continued to fall in the near term, prices should begin to stabilize as the market for accommodations in New York has improved markedly since the depths of the recession began. As usual, international currency changes will play a major role in the price of vacation rentals into the future.

Price Range of Vacation Rentals by Type 1st half 2010

Price range of vacation rentals in New York gives a clear picture of not just the average price, but of the high and low-end rentals, too. In general the least expensive apartments have become cheaper over the past two years while the most expensive apartments have been less expensive than in the past. For example in 2008, the least expensive 2-bedroom apartment that was rented was $140 per night while the least expensive 2 bedroom apartment in 2010 was $103 per night, over a 25% reduction in the maximum price rented. On the top end of two bedroom rentals the highest priced 2-bedroom in 2008 was $800 while in $2010 the highest priced two-bedroom to rent was $500 per night, a 40% decline. Though 2-bedrooms have some of the highest rates of decline, the statistics for other types of apartments are actually quite similar.

These changes in range make sense because clients have been and will continue to look for the best values in the market. Owners who "over price themselves" will have a hard time filling their accommodations whereas owners priced in the middle will have no problems keeping their accommodations full.