NYC’s Rental Circus Sees Bidding Wars & Wild Price Hikes
New York’s rental market has turned into a wild ride of bidding wars and sight unseen leasing, months in advance. That’s according to a recent story in The Real Deal which describes the rental scenario that is currently sweeping the city. It’s the direct opposite from a couple of years ago when the pandemic had shut NYC down and tenants were fleeing to the suburbs and beyond as remote working took hold.
“Don’t paint the apartment,” one apartment hunter is reported to have told a broker in The Real Deal story. “I’ll pay your broker’s fee. I’ll sign a two-year lease.”
Renters gathering in front of an open house in Williamsburg, on Feb 11. Photo: Courtesy of Bess Adler/Bloomberg.
Part of the reason for the deluge of tenants is down to the abating virus threats. Delta and Omicron are seemingly in the rear view mirror and many former New Yorkers are anticipating being called back to their desks in the spring. Coupled with that is the already low rental inventory pushing out waitlists for June occupancy.
The frenzy accentuates a trend that has been building for almost a year when renters got vaccinated and started moving back to the city. Landlords started to increase their prices during the Summer and by the Fall they were back at pre-pandemic levels. The median price for rentals jumped 2.2 percent in January to $3,550, the highest rent on record for the month, with a current low vacancy rate of 1.7 percent.
Renters gathering in front of an open house in Williamsburg, on Feb 11. Photo: Courtesy of Bess Adler/Bloomberg.
Bidding wars have broken out all over the city as rents have risen 24 percent from a year ago, making New York the most expensive city in the country according to the U.S. Census Bureau. A recent StreetEasy report shows median rents in Downtown Manhattan including Flatiron, West Village, and Battery Park City have risen by 40% year-over-year to $4,200. Soho has led the growth jumping a meteoric 57.9% to a median asking rent of $6,002.
A row of buildings in Soho, New York City.
It’s a similar tale in Brooklyn where the median rent for Downtown Brooklyn apartments is just shy of $4,000, with Williamsburg slightly behind it at $3,718.
Conversely, StreetEasy shows multiple listings in apartments across the city in Manhattan, Brooklyn and Queens still for sale at all price points. Although sales inventory continues to drop, it begs the question, why continue to rent in an extremely tight market and be at the mercy of landlords’ price hikes, when buying is a viable option? Down payments can be somewhat mitigated by multiple loans programs that allow less than a 20% deposit. A purchase is the chance to lock in a fixed rate, stabilize finances and build equity.
A picture of the Brooklyn Bridge taken from Brooklyn Bridge Park.