This is a question that came into my mind when listening to people all over talk about the real estate bubble and the economy. I have lived here my whole life and see things a bit differently than most other people living here. In other parts of the country and even the world, there is very little, if anything, that can compare to the rental market here. China, Japan, London, San Fransisco are other areas that are tight markets overall, where the demand far outweighs the supply. None have the draw and lure of this city. So who really runs this town? Renters or landlords?
The rental market here is somewhat insulated from what happens elsewhere. Even in the midst of the recession periods dating back over 100 years, the vacancy rate here in Manhattan is never in double digits. Actually, for it to hit 1% or greater is actually viewed as the market having a surplus here. This means that there is always fierce competition for affordable (if you can call it that) housing in Manhattan. The higher end market sometimes seems to go faster when priced properly and in a sound location.
Honestly, the pricing is actually irrelevant as this city is all about location. For a solid location, the price can be what the market will bear. For example, a new building on the corner of West 72nd and Broadway, directly across from the 1/2/3 train station aptly named, "The Corner" has rented at least 75% of it's units with studios STARTING at $2975, 1BR's at $4600, 2BR's at 7950 and 3BR's at $16,000 per month. They began leasing earlier this year. I still can't figure out why you take a train if you pay $18,000 per month for a three bedroom. I would think sitting in traffic in a towncar with a/c is better than having Louie from the Bronx eat his bagel, Henry the Hipster from Harlem (used to be Larry Homeboy from the hood, not as much anymore) blasting gansta rap from his ipod and various shady individuals rub you up on your way downtown in 20 minutes on those sardine cans we call the subway, but what do I know?
This shows that while the rest of the country and even this city and state, are in a crunch financially, New York is still the most affluent city around. The landlords have always been in control historically. With the "crash" which was really more like an altitude adjustment of rents and sales prices here since the fourth quarter of 2008, the renters gained some ground as rent prices dropped 4% and sales prices became more negotiable through the last two years. The sales market is still a buyers market. We are still seeing some of the lowest mortgage rates ever, and the owners are having a hardtime finding buyers as mortgages are not getting approved as much for sub 700 credit scores. Rentals, is another story altogether.
There is a shortage of rental apartments as the vacancy rate has dipped below .90% again for the first time since the second quarter of 2008. The landlords can always rent directly and the renters can always rent directly. It's kind of like finding a needle in a haystack in this city though. That's a part of why broker's earn our fees. It's not just about turning a key or opening a door and being a bit of a tour guide. We screen, guide, advise, prepare and even serve as therapists more often than not.
Landlords have been offering a month of rent either free or towards the broker's fee. A standard broker's fee is 15% of the first year's rent (a little less than 2 months rent). Many broker's will settle for this concession from landlords when it's offered, as it helps everyone. The landlord gets a tenant that has been pre-screened by a broker rather than a random street-walker, the renter gets a decent apartment and saves almost two months rent and the broker gets a piece of a commission rather than no commission at all. As the market tightens, those concessions from landlords dry up. For a landlord, a person being able to pay the fee is more likely to be a model tenant. It speaks volumes to a landlord that someone is financially solvent enough and willing to pay an expert two months rent to find the best possible space, quality, location and price for the dollar.
I have seen those concessions vanish in high demand areas that they were never really offered in before. There usually is a catch when a landlord offers this. Either it's a large managment and the apartment has been vacant for a while, the monthly rent is the same as if you paid a fee yourself to a broker, the area is a fringe area (further from a subway or "developing" area) or the landlord is desperate to get it rented fast. Either way, you get what you pay for. Do the math and you'll see that finding a below market rent with a broker's fee involved, usually balances out better in the long run over two years or more versus a market rate apartment with yearly increases in the rent of 7-10%. If you don't have the money for a fee, than begin to expect five, six or even ten hour days, at least five or six days a week, of pounding the pavement looking for your next place.
The concessions have vanished a bit, but with the traditionally slower winter rental season approacing, I sense more will begin to pop up again in a month or so. This is the time where the renters will be able to negotiate lower monthly rents, perhaps get a fee paid from a landlord if they are going through a broker. Do realize that the landlord may ask you to sign a 16 month lease so that they get the apartment back vacant during the peak rental season and can get top dollar.
I guess the renters are in control in fringe areas. Those are hard to rent apartments and so when a landlord has someone interested, they can be a bit more agreeable. The owner has to offer free rent and or pay a month to the broker to ensure the units get rented and not sit vacant for months at a time. In high demand areas, there's no question about it. Let's be honest though, overall, the landlords have what we want as prospective tenants. Even when things can seem otherwise, they are always in control!
Monday, September 27, 2010
Monday, September 20, 2010
The Recession has been over?
There is much talk about the economy and where things stand. Here is an interesting article that was posted today that may alter your outlook.
http://www.ritholtz.com/blog/2010/09/its-official-recession-ended-june-2009/
Tuesday, August 17, 2010
Priced out of Downtown? Here are the best options in the boroughs
I know that everyone comes here to live in Manhattan here. But what do people who live here do when the landlord raises the rent to an amount that you just can't afford anymore? For those that are new to the city and the market reality of the prices and space here has just smacked you in the face, I have some areas that you will want to consider.
Williamsburg
This is the first place people mention when considering going away from the traditional areas on Manhattan to live. It's hipster vibe, trendy shops and cafes make people gush for days. I lived here for a year and it was decent. There is almost too much to do along Bedford Ave. Cool bars, great restaurants and McCarren park are the pluses of the neighborhood. The subway access if you are close to the L train and no further than Lorimer is actually superb. The problem is that rents here are starting to mirror Manhattan places now that it is a known hot spot.
http://newyork.timeout.com/section/williamsburg
Harlem
This was once an area that people feared. With a huge expanse by Columbia, Bill Clinton coming to town and the lack of acreage on Manhattan Island as a whole, this area is enjoying a new Harlem Renaissance. The rents here are lower than areas below 96th street (but hurry, because they are rising), the commute downtown is not that bad (try to get a spot near an express train) and the food and shopping options are plenty. Your getting the Manhattan zip code, but if you are smart, can pay borough prices. The trade off is less drunk frat kids stumbling around the streets for EVERYBODY hanging out on the streets. From Grandma's and Grandpa's to young children staying out way past their bedtime, this area of NYC is super diverse and becoming more and more gentrified by the week.
http://newyork.timeout.com/section/harlem
Astoria
I have stayed here off and on at times. My father lived here when I was young. This is a great area that looks close on the map to Manhattan, but if you are not right by the subway, it can be a bit of a trek on the late night. The area is becoming trendy and so the prices are nearing Manhattan prices, though you MAY have more flexibility in terms of requirements and negotiating a deal. MAY is the operative word. Dining options are mostly Greek as there is a heavy Greek population in the area. This is the first destination for most when considering the outer boroughs.
http://newyork.timeout.com/section/harlem
Jackson Heights
This area is a hidden jewel of the boroughs. If you don't know, now you know. This is a great area for keeping the costs down. This is a diverse area in Queens with great subway access if you can get a place in the 70's to 80's and not too many avenues away from Roosevelt Ave. In some ways, it can actually be a shorter commute than Astoria if you work it out the right way. I lived here for over five years and loved it. Great food, cheaper prices than Manhattan or Astoria and only a 30 minute commute to Manhattan max.
http://newyork.timeout.com/section/jackson-heights
Park Slope
After Williamsburg, this is usually the next place on peoples map when considering BK. The Brooklyn Heights area is always first on the list, but with it's superior subway access and closer to Manhattan than parts of Manhattan location, it is the one area of the city that is truly across the river with city prices. So heads turn to Park Slop as the next viable choice. There is a great neighborhood feel, great school systems for those families with or having children. Good dining options and a short trip to the city make this a solid value.
http://newyork.timeout.com/section/park-slope
That's the five top areas that people consider when leaving the traditional areas of the Upper West or East sides, midtown to downtown. I have one more bonus area that is perhaps the best jewel in all of the boroughs. The mainstream writers haven't caught up to this old school native yet though. To find out about that one, you will have to go with me ;-)
Williamsburg
This is the first place people mention when considering going away from the traditional areas on Manhattan to live. It's hipster vibe, trendy shops and cafes make people gush for days. I lived here for a year and it was decent. There is almost too much to do along Bedford Ave. Cool bars, great restaurants and McCarren park are the pluses of the neighborhood. The subway access if you are close to the L train and no further than Lorimer is actually superb. The problem is that rents here are starting to mirror Manhattan places now that it is a known hot spot.
http://newyork.timeout.com/section/williamsburg
Harlem
This was once an area that people feared. With a huge expanse by Columbia, Bill Clinton coming to town and the lack of acreage on Manhattan Island as a whole, this area is enjoying a new Harlem Renaissance. The rents here are lower than areas below 96th street (but hurry, because they are rising), the commute downtown is not that bad (try to get a spot near an express train) and the food and shopping options are plenty. Your getting the Manhattan zip code, but if you are smart, can pay borough prices. The trade off is less drunk frat kids stumbling around the streets for EVERYBODY hanging out on the streets. From Grandma's and Grandpa's to young children staying out way past their bedtime, this area of NYC is super diverse and becoming more and more gentrified by the week.
http://newyork.timeout.com/section/harlem
Astoria
I have stayed here off and on at times. My father lived here when I was young. This is a great area that looks close on the map to Manhattan, but if you are not right by the subway, it can be a bit of a trek on the late night. The area is becoming trendy and so the prices are nearing Manhattan prices, though you MAY have more flexibility in terms of requirements and negotiating a deal. MAY is the operative word. Dining options are mostly Greek as there is a heavy Greek population in the area. This is the first destination for most when considering the outer boroughs.
http://newyork.timeout.com/section/harlem
Jackson Heights
This area is a hidden jewel of the boroughs. If you don't know, now you know. This is a great area for keeping the costs down. This is a diverse area in Queens with great subway access if you can get a place in the 70's to 80's and not too many avenues away from Roosevelt Ave. In some ways, it can actually be a shorter commute than Astoria if you work it out the right way. I lived here for over five years and loved it. Great food, cheaper prices than Manhattan or Astoria and only a 30 minute commute to Manhattan max.
http://newyork.timeout.com/section/jackson-heights
Park Slope
After Williamsburg, this is usually the next place on peoples map when considering BK. The Brooklyn Heights area is always first on the list, but with it's superior subway access and closer to Manhattan than parts of Manhattan location, it is the one area of the city that is truly across the river with city prices. So heads turn to Park Slop as the next viable choice. There is a great neighborhood feel, great school systems for those families with or having children. Good dining options and a short trip to the city make this a solid value.
http://newyork.timeout.com/section/park-slope
That's the five top areas that people consider when leaving the traditional areas of the Upper West or East sides, midtown to downtown. I have one more bonus area that is perhaps the best jewel in all of the boroughs. The mainstream writers haven't caught up to this old school native yet though. To find out about that one, you will have to go with me ;-)
Thursday, July 29, 2010
No Fee? No More?
The end of the no fee season is back upon us. There has been a major shift in the rental market here. With rents rising once again, owners and managements paying a month's rent towards the broker's fee are few and far between. Properties with solid location are in short supply and the demand is high. If you are looking for a "no fee" apartment in this city over the next two months, you may as well go and take the course for your real estate license. At least then, you will have access to the proper databases to search efficiently. Properly priced apartments are renting within a day of hitting the market, if they even make it to the market right now!
The one month "OP" (owner paid) commission rate is going to be a last resort for properties that are not renovated, in fringe areas or are sitting on the market for too long for various other reasons. The best priced, good quality, spacious and prime location properties will be offered and able to be secured through a broker in this market. I have seen this trend for the past five years with the rental market here. Usually this happens earlier in the year around the spring rush. The fact that it is happening so late in the rental season this year, indicates that this may be a cold winter for renters. Traditionally, this is the time of year where the "OP's" begin to appear. To see them disappearing is a sign that the "no fee" market may be crashing for a long period.
The one month "OP" (owner paid) commission rate is going to be a last resort for properties that are not renovated, in fringe areas or are sitting on the market for too long for various other reasons. The best priced, good quality, spacious and prime location properties will be offered and able to be secured through a broker in this market. I have seen this trend for the past five years with the rental market here. Usually this happens earlier in the year around the spring rush. The fact that it is happening so late in the rental season this year, indicates that this may be a cold winter for renters. Traditionally, this is the time of year where the "OP's" begin to appear. To see them disappearing is a sign that the "no fee" market may be crashing for a long period.
Tuesday, July 20, 2010
The Fall of the Wall?
Here in NYC, we live in a housing market that already has low supply and high demand. Thereforre the rents are above average when compared to the rest of the country. To offset this and find a way to reap the benefits of living in Manhattan, many renters when looking for doorman buildings, have resorted to putting up temporary pressurized walls to create second or third bedrooms. This makes a $3500 one bedroom now affordable for two young professionals who can really only afford $1700 per month in rent.
This will soon be a thing of the past. This year, many landlords are no longer allowing walls to be erected and many are even going so far as to having existing walls removed. What many are being told, which is in compliance with a Department of Buildings code, is that they can only put up a partition or shelving unit which results in obviously, less privacy. The effect of this is massive, as many new tenants in the city rely on doorman buildings for the obvious benefits of security, as well as the convenience of on site staff for everything from repairs to package/dry cleaning reception. Few are the new hires who can come right out of college and afford a $3500 one bedroom at 40 times the monthly rent on thier own.
Many renters are now being forced to consider other areas of the city such as Washington Heights, Harlem, Long Island City and Brooklyn in order to get the same luxury at a more affordable price. The old "boundaries" of what was once deemed a safe area to live are being pushed further and further outwards and upwards with each week.
This will soon be a thing of the past. This year, many landlords are no longer allowing walls to be erected and many are even going so far as to having existing walls removed. What many are being told, which is in compliance with a Department of Buildings code, is that they can only put up a partition or shelving unit which results in obviously, less privacy. The effect of this is massive, as many new tenants in the city rely on doorman buildings for the obvious benefits of security, as well as the convenience of on site staff for everything from repairs to package/dry cleaning reception. Few are the new hires who can come right out of college and afford a $3500 one bedroom at 40 times the monthly rent on thier own.
Many renters are now being forced to consider other areas of the city such as Washington Heights, Harlem, Long Island City and Brooklyn in order to get the same luxury at a more affordable price. The old "boundaries" of what was once deemed a safe area to live are being pushed further and further outwards and upwards with each week.
Monday, July 12, 2010
Rents are rising in Manhattan again!
I have watched the markets around the country plummet and not yet recover over the past six years. Here in Manhattan, that is just simply not the case. There is such an unbalanced set of supply and demand here that you can not imagine until you have lived here.
There are more people than there are apartments to rent. I got a client this weekend who called me on a three bedroom uptown. Upon talking to her I realized that she was actually trying to find enough space for FIVE people to share for under $3000! There are serious gaps in peoples perceptions of the market here.
Take a look at these statistics.
http://www.cityrealty.com/new-york-city-real-estate/carters-view/
The link above is great if you are thinking of moving into an apartment in Manhattan. I am quite sure many people feel that they can try to do it on their own without a broker. Do realize that it is possible, but you will have a long winding road. Even with a broker it is tough if he or she has no relationships or even worse, a bad one with the managing agents or landlords. There is very little time for the good apartments to be viewed and secured in this current market state. You must be pro-active and not reactive when trying to find a place during this time of year. There is only going to be less to choose from with each day and many young agents don't realize the cycle of turnaround.
I hope that these facts are helpful in your securing a new home. If you need any help, I am here to guide you home!
There are more people than there are apartments to rent. I got a client this weekend who called me on a three bedroom uptown. Upon talking to her I realized that she was actually trying to find enough space for FIVE people to share for under $3000! There are serious gaps in peoples perceptions of the market here.
Take a look at these statistics.
http://www.cityrealty.com/new-york-city-real-estate/carters-view/
The link above is great if you are thinking of moving into an apartment in Manhattan. I am quite sure many people feel that they can try to do it on their own without a broker. Do realize that it is possible, but you will have a long winding road. Even with a broker it is tough if he or she has no relationships or even worse, a bad one with the managing agents or landlords. There is very little time for the good apartments to be viewed and secured in this current market state. You must be pro-active and not reactive when trying to find a place during this time of year. There is only going to be less to choose from with each day and many young agents don't realize the cycle of turnaround.
I hope that these facts are helpful in your securing a new home. If you need any help, I am here to guide you home!
Saturday, July 10, 2010
RENTAL ALERT!!! Vacancy rates below 1% again!
After a much needed respite, I am back!
This is a busy season as within seconds of posting an ad, I proceed to get calls for twelve hours straight from 11:30AM-11:30PM yesterday. There are tons of people looking and not much selection. There is also very little time to deliberate as I have been showing in groups. If you don't want it, there are four more people lined up outside who will take it.
The rents are rising and the landlords are not offering concessions as much as they were in the past years. This is the time to find a good broker and go out looking during the week. You will maximize your chance of viewing the right place and securing it. Viewing on the weekend can leave you applying for an apartment only to find out that someoone else is signing leases on it that Monday.
Many of my clients can attest, that you will be glad to pay the fee for a lower monthly rent. Anything that is offered as a "no fee" during this time of year, is something that you are really just paying the fee back to the landlord in the form of a higher monthly rent.
This is a busy season as within seconds of posting an ad, I proceed to get calls for twelve hours straight from 11:30AM-11:30PM yesterday. There are tons of people looking and not much selection. There is also very little time to deliberate as I have been showing in groups. If you don't want it, there are four more people lined up outside who will take it.
The rents are rising and the landlords are not offering concessions as much as they were in the past years. This is the time to find a good broker and go out looking during the week. You will maximize your chance of viewing the right place and securing it. Viewing on the weekend can leave you applying for an apartment only to find out that someoone else is signing leases on it that Monday.
Many of my clients can attest, that you will be glad to pay the fee for a lower monthly rent. Anything that is offered as a "no fee" during this time of year, is something that you are really just paying the fee back to the landlord in the form of a higher monthly rent.
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