Manhattan Rents Fall for Every Apartment Size (Locke, Fairfield: sales, real estate)
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Rents fell last month for Manhattan apartments of all sizes, the first across-the-board price decline in at least four years, as a construction boom brought more buildings to market and allowed some tenants to leave for bigger or newer units.
For studios, which held their own last year while costs for bigger apartments slid, the median rent dropped 2.6 percent, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday. It was the biggest year-over-year decrease since the firms started tracking the data in 2012. The median price of studios last month was $2,500, the lowest it’s been since January 2015.
Waiting for the lower end to drop, every studio is still $200-300 more per month than my current one, but I've recently noticed 2bds going down over here. I love living alone, but it's so tempting to get in while the going's good...
"Even with these price drops, rental prices remained high and reached what Miller called an "affordability threshold." He said sales volume in nearby suburbs including Westchester and Fairfield was at multidecade highs from first-time buyers, people moving out of the city, and those looking to enlarge their living spaces. "For the suburban boom to cool significantly you're going to have to see rents continue to fall," Miller said. "
As myself and others have been saying, property owners are competiting against the suburbs with these insane rents for not so great apartments. Only persons you see taking up these offers are those who need or want to live in NYC. Everyone else who can afford to do so is considering their options carefully.
Also as have said ammeities have yet to follow in many areas where all this new housing including upper end/luxury have been built. Quality schools, parks, hospitals, etc... often are lacking or are at distance. For what some want for a two bedroom apartment in the city you can pay a mortgage else where, and your kids will be in a great local public school zone.
It doesn't help that in much of this new constructon quality is sketchy and the apartments despite being advertised as "two" or "one" bedroom units often are overall quite small compared to older buildings. Studios aren't that huge either compared to older buildings either.
Finally you have to consider economics; while rising mortgage rates are still at historical lows. It makes far more sense for anyone considering to stay put in a residence for a few years to buy if their mortgage payments will be equal or even less than asking rent.
Many owners are offering months free to retain tenants, which probably contributes to the drop in rents. Price resistance seems to be a factor here as well. I definitely feel like the market is slower this year. https://www.apartmentlist.com/ny/new...-price-monitor
It's interesting that you mentioned amenities - as NYC rents are partially driven by amenities, but in Manhattan specifically it's about building amenities, like doorman, gym, laundry, parking, etc. (https://www.renthop.com/studies/nati...sing-your-rent) Now there's services like Amazon Locker, ClassPass, Liox, Lux... it seems that people are focused more on space and commute - what's your take on this?
Quote:
Originally Posted by BugsyPal
"Even with these price drops, rental prices remained high and reached what Miller called an "affordability threshold." He said sales volume in nearby suburbs including Westchester and Fairfield was at multidecade highs from first-time buyers, people moving out of the city, and those looking to enlarge their living spaces. "For the suburban boom to cool significantly you're going to have to see rents continue to fall," Miller said. "
As myself and others have been saying, property owners are competiting against the suburbs with these insane rents for not so great apartments. Only persons you see taking up these offers are those who need or want to live in NYC. Everyone else who can afford to do so is considering their options carefully.
Also as have said ammeities have yet to follow in many areas where all this new housing including upper end/luxury have been built. Quality schools, parks, hospitals, etc... often are lacking or are at distance. For what some want for a two bedroom apartment in the city you can pay a mortgage else where, and your kids will be in a great local public school zone.
It doesn't help that in much of this new constructon quality is sketchy and the apartments despite being advertised as "two" or "one" bedroom units often are overall quite small compared to older buildings. Studios aren't that huge either compared to older buildings either.
Finally you have to consider economics; while rising mortgage rates are still at historical lows. It makes far more sense for anyone considering to stay put in a residence for a few years to buy if their mortgage payments will be equal or even less than asking rent.
The developers have overbuilt. Look at the skyline LIC hss grown. And they're basically committed to the projects that are current going up. But once those are done, don't expect many new projects for a while.
NYC population growth will eventually soak up the oversupply. In point of fact, the short term rent decline will draw people in. That will eventually get rents rising again.
One problem i see and warn alot of my clients about these "deals/rent drops/concessions" is that when it comes time to lease renewals the price will go up on the actual rent price and not the net effective price. Landlords/management companies are hoping for things to pick up which is why they offer free rents, etc instead of just lowering the rent completely.
One problem i see and warn alot of my clients about these "deals/rent drops/concessions" is that when it comes time to lease renewals the price will go up on the actual rent price and not the net effective price. Landlords/management companies are hoping for things to pick up which is why they offer free rents, etc instead of just lowering the rent completely.
They should listen to you more. I gave Reps.
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
don't forget 1/2 the rentals in nyc are stabilized and this is the 2nd year in a row they saw no rent increase so that does lower the over all statistic .
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