Manhattan Rental Vacancies in May Back to 2007 Levels - Market Reports - Curbed NY

Manhattan Rental Vacancies in May Back to 2007 Levels - Market Reports - Curbed NY

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According to a report by Citi-Habitats, the rental market is bouncing back to pre-recession numbers. The vacancy rate for the first quarter of 2011 was around 1.08% but it's between April and May when the rental action really heats up. We don't see the actual report on Citi-Habitats yet but according to the Wall Street Journal the vacancy rate for May is just around 0.7%, which is way down compared to 2009's brutal 2.5%. What's more, concessions to renters have pretty much gone the way of landlines with only 8% of rentals having to lure in renters with offers. Back in 2009 that number was 60%. Maybe the high-end rentals trend is just a trend towards rentals overall. With more people still reeling from the housing crash and fewer people even getting mortgages, this could be the summer of the rental. Bidding wars and all.
· Rents on the Rise Again [WSJ]
· Citi-Habitats [Citi Habitats]
— Graphic via WSJ

Market Reports
Rentals
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carlitony
How much more will it take for people to understand it is now again more beneficial to buy? Unlike a year ago, pretty much anyone with a 20% downpayment and a decent credit score can get a mortgage at this point (well in any building that's 50% sold). It makes no sense to be paying rents above $4,000 for a 1BR and $5,500+ for a 2BR and be at the mercy of a landlord who will most likely increase it again in 12 months. Not sure if people really understand that a fixed rate mortgage is a fixed payment that will depreciate over time when adjusted with inflation while rents will go up and probably more than inflation, it's a no brainer especially when you can get 4.5% 30y fixed rates...but people's psychology usually defies reality (as it did in 2007 for opposite reasons)...

#3. 06/09/11 10:47 AM
carlitony: 144 comments
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FerryBoi
"It makes no sense to be paying rents above $4,000 for a 1BR and $5,500+ for a 2BR and be at the mercy of a landlord who will most likely increase it again in 12 months."

You're right. That's probably why a majority of New Yorkers DON'T pay $4K for a 1BR apt. Not sure what part of town you're hanging around in, but most of us pay a hell of a lot less than that for rent. For folks paying $1200-2000 a month for rent, scrounging up a 20% down payment on a $350,000 apt (not to mention taxes, maintenance, insurance, closing costs, etc) ain't exactly easy, even with a fixed-rate mortgage.

#4. 06/09/11 10:54 AM
FerryBoi: 211 comments
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carlitony
@FerryBoi: You're partially right the $4K for a 1BR might be a little high (even though in light of the WSJ article I'm not sure) but all I can say is that I was trying to look for an apt for a friend in FiDi (cheaper than West Village or Chelsea) and could not find anything under $3,700 for a 1BR. And that was more than a month ago...I also wonder who pays $1,200 for an apt in Manhattan unless it's a rent stabilized apt they have had for 30 years (and still i'm not even sure). But yes in the outer boroughs it's different.
I guess I was mostly thinking of the many people paying $5K to $10K a month in Manhattan (and according to the NYT this WE, more and more above $10K) who for sure would have the income to get a jumbo loan but decide to pay these outrageous rents...that's really puzzling to me. But I hear your point about middle class households leaving outside Manhattan, it's not exactly easy for everyone.

#5. 06/09/11 11:09 AM
carlitony: 144 comments
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