Thursday, December 6, 2007

Supply Versus Demand

In the summer months, there is a greater demand for housing. There is the influx of new hires, interns, incoming students getting an early jump on their apartment search as well as short term vacationers. While most landlords prefer that their leases end in the summer and thus they can command a higher market rent, there is actually a shortage of apartments every year from March through September. Sometimes this goes even into November as there are all of the lawyers who pass the bar and search somewhat later after a much needed trip around the world.
The vacancy rate in this city for Manhattan rentals has been below .5% for the past year and is currently below .25%. In the summer, this creates a feeding frenzy. Everyone wants to live inside what I refer to as "the box". South of 96th Street, North of Canal, East of 8th Ave (Broadway on the UWS) and West of Second Ave. This is based on the subway access in the city as well as a perception of what constitutes a safe area. Most people who are relocating from another state have been groomed to look in this box and thus end up living in a box. Not only does this further narrow the selection of available apartments to rent, they also have visions of New York that need a serious updating from the movie "The Warriors".

Generally speaking, the apartments further North, South, East or West yield more space. Any native or veteran NY'er knows this and looks for those areas to get the maximum yield for their dollar. I always say, if you are at least on the island, it beats dealing with the *B&T crowd depending on your needs and budget (*That's bridge and tunnel not bacon and tomato).

It's not just to purchase an aparment here in the city where you can end up in a bidding war. With many landlords accepting multiple applications, you can end up with several qualified applicants at the same time. This will rarely happen in the "off" season , but can happen quite often in the summer and thus a "make me an offer" session can begin. I have had my share of bidding wars on rentals. While I will normally advise on looking for other options, in a tight market with a tight deadline to secure occupancy, sometimes this is the only choice. Fortunately, most have been won by my clients.

Even if you are in a higher budget range (excess of $5000/mth rent) there can often be a lack of inventory based on your particular needs, be it the quality, space or location. These are three areas in which most New Yorkers have to settle on one or more of unless there is no rush to move. Usually, when that is the case, I have found that most of these people are just window shopping. You know the type, they come into the store everyday and squeeze the charmin and squeeze the fruit but never buy anything.

This brings me back to supply versus demand. If you are serious about finding a place here, think long and hard about your criteria and also give yourself a minimum of four to six weeks prior to the expected occupancy date if you are not at extremely selective. If you are, then you may want to give as much as six to eight weeks prior in case you will need to look at co-op or condominium sublets which often can lead to more space, higher quality and a more homely feel than the traditional rental building. I also advise you to make two lists of your criteria. A list of NEEDS and a list of WANTS. Trust me it will help you to be more focused in your search. Also stick with one broker whom you connect with as opposed to working with dozens. For the most part, a good broker will have access to the same listings as a bad broker, but take the time to LISTEN to your NEEDS.

Either way, the proceess is of renting here is rarely easy, especial trying in the summer months and one that will force you to compromise on a lot of your wants if you don't handle it the right way. There are simply too many people looking and not enough places in the summer months, hence the higher market rents. A savvy consumer is looking to move now even if it means breaking assigning or subletting a lease. This is the time when landlords are desparate and you have the most bargaining power as a renter in this city!


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