Renters - you missed your chance to buy!

"Debby Doubters"?

> Rents are soaring. Developers are buyiing up every last lot in Manhattan at all time high prices. Even Astoria and LIC are selling at all time highs. You Debby Doubters missed your chance to buy at all time lows in price and financing. Good luck renting for the next decade until the new bubble pops!

?? our 2% increase if fair imho. if you understand the credit cycle, you would never ever buy right now. prices remain inflated cause of ZIRP.

I think notadmin is onto something. Feels like rates cannot stay this low and are likely to rise this year. Not sure if underlying fundamentals will be enough to support current sale prices. Would be curious to hear thoughts from others.

Exactly they all should have bought after the crash and at ZIRP based rates. Now they have missed lows in asking prices, although I believe we will see ZIRP similar rates for at least the next 2 years. I would rather pay a bit more on asking price with historic low financing than save $20-30K on asking and at higher financing rates when they come. Especially with mortgage interest deductions in the cross hairs of the right wing austerity patrol.

> I would rather pay a bit more on asking price with historic low financing than save $20-30K on asking and at higher financing rates when they come.

your call, imho it's financially illiterate. but the $20-$30k is so optimistic, this credit cycle inflated prices way much more than that.

So your advice is continue to market time??? My point is that for all those market timers they missed perhaps the best chance in their lives to market time. Do you ever expect interest rates to go this low again in our lives? I dont see it until the next historic crash. Therefore those who didnt buy are faced with rising prices and rising interest rates for a long time to come. Pile on top of that rapidly rising rents in prime, good, and decent neighborhoods. The renters are going to be paying out the nose for years waiting for what just happened to happen again.

Rents are a leading indicator of pricing. Unfortunately for your argument, they "were" soaring, not "are" soaring. Even the RE-ad dependent nytimes reports rent increases have topped off.

Unless you have a trophy apartment, you must recon with the reality that is affordability. So, if everyone "missed" their chance / is "priced out", then there is fundamentally no more room to go up... But maybe you purchased the top floor of 15 CPW in which case I am wrong as your apt is not governed by the same factors.

Fundamentally rents cant go up???? Rentals are flying off the market faster then ever (in prime, good, decent areas) Landlords dont care about fundamentals. They will jack rates until their units are vacant. There is still plenty of room to go up, especially now that Landlords know the timers cant and wont buy for years. There is a huge lack of capacity coming into the market over the next 3 years. Rents are not going anywhere but up and up....

any idea how this cycle compared to the one in the 80's before popping? Did people went co-op crazy back then and purchase apartments they barely can afford in order not to miss out on gains? just curious.

Those who bought in the 80's more than they can afford and held onto the places are sitting on massive amounts of equity (some in the millions) while living in places they have paid off and couldnt afford to rent the same type of place if they wanted to.

"Rents are soaring. "

Average rent per square foot was DOWN 4.3% yoy in December. The only reason median and mean rents were up was larger units and luxury units skyrocketing. Notice that AVERAGE rents were up by 10%, but MEDIAN only up by 0.8%. Simple math and his stats on luxury rentals and MILLER'S OWN BLOG proove me correct on this. But per square foot is the best measure of like for like.

http://www.elliman.com/pdf/17a86eedbfb4d049c96b9ded81134763ff32afb5

Looking back ten years, adjusted for inflation, rental prices have not moved. In fact, looking at average and mean for apartments or price PSF, in REAL terms we are at late 90s prices in Manhattan. As long as your income has gone up the same as, or faster than inflation (and mine has gone up WAY faster) you are fine

http://www.millersamuel.com/charts/manhattan-quarterly-rental-price-indicators-inflation-adjusted

Finally, here is the official CPI for New York City - rents are up a whopping 2.6% YOY for December. Versus 2.1% overall CPI for the City. So...yeah...no SOARING rents, sorry.

http://www.bls.gov/ro2/cpinynj.htm

Meanwhile, the rent to buy ratio HAS soared. Even adjusted for inflation.

http://www.millersamuel.com/charts/manhattan-rental-to-sales-price-ratio-median-annualized-infl-adj

Petrfitz,

You aren't here to help anyone, you just trying to scare them.

You played this game years ago until you claimed to have sold all of your NYC property - then you didn't seem to care for a while.

It is clear that your advice is disingenuous and self-serving.

Psf down but rent up? Makes no sense. Just like it made no sense 2 weeks ago
http://streeteasy.com/nyc/talk/discussion/33595-manhattan-rent-hikes-slow

>Meanwhile, the rent to buy ratio HAS soared. Even adjusted for inflation.

Makes no sense. Why would you adjust for inflation in a current ratio?

memito - thats your opinion. I put my money where my mouth was. I sold high - not a peak but shortly there after then I sat back in semi-retirement waiting for a bottom. Then I bought back in. Now my units are all full and renting at rates higher than even I expected. So call me anything you want. I wont care as I am at the bank cashing your rent check.

fitzie, youre like a reverse brooksie: you should stick to politics, stay clear of real estate investing--god forbid you get yourself into another las vegas property!

He hates renters it seems. Republican?

I love renters - they are making me rich. I hate renters who bad mouth real estate investing on a real estate board when they have no skin in the game and never will. Yikes - you would be surprised whats happening in the Vegas high end market.......but keep slinging insults from your $3K per month studio I can take it.

Just listen to yourself:

Your units are full and paying high rates but you're recommending renters should buy...

What landlord would want his renters to leave to buy? You should be pushing for people to keep on renting because that is the business you are in.

If you are in this game for price appreciation, then make a sound, non-emotional/personal argument why you think prices could/should appreciate. But all you have done on this board is insult people and try to stir up fear of rent increases.

If you are interested in helping people then make sound arguments and give lots of examples, otherwise you are just a spoiled troll.

tool (your word)

vegas high-end? you're kidding, right?

No one buys-to-let in NYC for the rental income, which is what? 2% after-tax these days, to be further diluted by transactions costs.

fitzy might win on capital appreciation but renters are better off not sinking hundreds of thousands of capital in.

interesting, right now all the talking heads are saying buy stocks now or forever be priced out.

Dude, you sold at the end of 2010:

https://streeteasy.com/nyc/talk/discussion/21987-adios-im-out

Here is the SE index vs. your mouth:

March 2008 (when you first showed up on this board playing the bull): 2192
November 2010 (when you sold): 1894
November 2012 (latest one, when you came back here the bull saying you bought back in): 1974

So you sold down 14%, probably had another 7.5% loss because of 3% annual negative carry over 2.5 years (annual 4.5% gross yield on rent, minus 5.5% cost of financing 2008-2010, minus 2% is maintenance/taxes/etc.). Ignoring transaction costs, down 21.5% on the nominal amount, or your entire downpayment, if you had put 20% down & listened to petrfitz.

Even if you had bought in Nov 2010 back when petrfitz was selling, you'd be up 4.2% nominally. Negative carry would have put you back to 0%. Never mind the 30% gain you would have had in either stocks or bonds with your down payment.

Let's see how things have played out since I started here. Unlike the poorly-timed buy-sell-buy switching that you did, I've stayed consistent on rent & invest story because NY RE is going to be flat and negative-carry for a long time.

SE index Oct 2008: 2106
SE index Nov 2012: 1974
Nominal loss: 6%
Negative carry: 4 years at 2.5%, so 10% total
Amortized transaction costs: half of 10%, so 5% total
Total down: 21%, or the entire down payment

Meanwhile, stocks are up 83% Oct 15, 2008 to present. Bonds are up 44%.

Putting aside predictions of the future, your past positions have sucked while mine have been correct. Maybe it was luck, but can you admit at least that much?

I estimate petrfitz has one or two units in Astoria or Flushing. When you are such a small-time player, you need to hide behind a SE chat room to feel big.

What about the children's educational software company?
http://streeteasy.com/nyc/talk/discussion/6666

@ petshit ... how much are your fire escape SUMMER RENTALS IN LES ?

"Psf down but rent up? Makes no sense. Just like it made no sense 2 weeks ago
http://streeteasy.com/nyc/talk/discussion/33595-manhattan-rent-hikes-slow"

Sweet Jesus! Take an entry level statistics class! Are you really so dense as to not understand this SIMPLE concept? And do you think M-S has been making a math error for like, 10 years now?

The PPSF includes PRICE, SQUARE FOOTAGE, and TOTAL NUMBER OF UNITS. The average price includes the first and the last, not the middle. So if there are lots of high-end units coming to market relative to normal times and to the median apt size, than average apt size would go up by enough to skew the results. And low an behold, Miller-Samuel, the WSJ, the NYT, the Real Deal, and Bloomberg ALL AGREE that the utlra-high end and luxury rental market in Manhattan is booming right now.

_______________________________________________

"Makes no sense. Why would you adjust for inflation in a current ratio?"

He has his reasons. But...it does not matter - MS has charts for the ratio BOTH adjusted for inflation and not. Either way, its way up from the historical average

Jason, you becoming angry doesn't make your nonsensical posts suddenly make sense.

S&Ps are up 5.2% for the month of January, up 14% LTM. And transaction costs are minuscule. kicking myself for not sinking cash in nyc re.

"Jason, you becoming angry doesn't make your nonsensical posts suddenly make sense."\

Your saying they don't make sense does not mean that they don't, in fact, make sense.

Miller Samuel has been on these very boards himself and explained before how average, mean, and average per square foot can and do OFTEN differ. He has also explained this on his blog. And I learned this sort of thing in stat class. I am not so much angry as I am flabbergasted by your inability to grasp a simple concept.

Im rolling into a 15yr fixed for about 2.5%...after 15 years will that be a good deal ?

I can't find it for rentals in a 30 second search...but here is his chart showing how square footage varies wildly quarter to quarter in the Manhattan sales market going back 10+ years.

http://www.millersamuel.com/charts/manhattan-average-co-opcondo-square-foot-trend-2

Hey in 30 seconds I can also find a chart that doesn't support anything that I've said like this one that Jason posted that shows square footage of apartments that transacted in the sales market.
So this chart, by the people responsible for inflation adjusted current ratios (the lack of sensibility of such an analysis you seemed to completely ignore as a limitation on their statistical rigor),
a) is about the sales market, not the rental market
b) is for apartments that transacted in the period (a small slice of the overall) rather than being for the whole market.

You posted the original article reflecting increases in rent. But you didn't like the conclusion. Let me give you some life advice: if you find yourself in a hole, stop digging.

What would prompt rents to fall?

The source for all these data points is MS. Your problem is with him. Not me.

So you were just posting based on the headline without understanding or supporting the content?

How about 3 posts up when you posted a link to a separate topic - is the study author's rigor in question, or simply yours for choosing an off topic link?

Owners have tons of gravy, including a multi-million dollar payout when they retire or 30 more years of rent free living.
The deduction is almost a moot point, and most owners earn too much anyway. Take the million dollar lottery payout at retirement and be happy.

Renters, they can't afford to buy. They will need to be broke renters until they can amass 6-figures liquid. Most idiots can not manage to do this. Hence, they do not get the jackpot at retirement and 30 years of rent-free living, to boot. Lifelong paycheck to paycheck renters?

Buyer buys $80k townhouse in 1980. Sells it for $6mm when he retires. And no, saying he could have taken that $8k downpayment to the racetrack and put it all on some horse (or investing into a company on the verge of bankruptcy) is not a valid opportunity cost comparison, you blithering imbecile.

What if stupid renter eventually buys in old age? Owners would be living rent-free at that age. Instead, she subjects herself to $60,000 a year in rent. LOL, nice "retirement" sucker. Correct, she is a ginormous fool. This is a case of "too little, too late" She should have bought something back in the 1970s or 1980s, like other people her age. She'd be sitting on millions and be living rent free. A true idiot renter who had made things even worse. At the least, should have moved to a $1500 studio.

Maybe not NYC, but owners have literally recouped 100% of the cost of their apartment in the 10 years of paying below market cost to own than to rent (owning is much cheaper than renting). Even if the apartment was today valued at $0, owners am still ahead. Wrap your mind around that.

2 years ago, I recall seeing $200k studios being posted here. Of course, some of SE crazies told buyers they were CRAZY. Now, there seem to be none of these $200k studios. If the cheapest studios are now listing for $300k, can we infer that the smart investors who bought 2 years ago are now sitting on a 6-figure profit cushion? Pretty damn incredible. Live for $1000/mo, and get paid $100k to do so. A renter doesn't see that sort of money in a lifetime!

Renters LOSE: Bought in 1983 for $1m. Sold in 2012 for $8mil. Owner walks away with a $7m profit. Renter's profit? $0. Yes, those brilliant renters can avoid the increasing cost of electricity and point out the 6 people who bought in 2009 who are underwater. They are so frickin' smart! Just think owners live for free for decades after paying off the mortgage. And get $7 million bucks as a parting gift.

Renters get ZERO percent return. And, renters pay MORE every single month, both during the mortgage and after it's retired.

Average renter net worth $5k
Average owner net worth $250k

Renting is for short-term thinkers. People used to say Manhattan was overpriced in the 1950s, 60s, 70s, 80s, and 90s. Guess what? Anyone who paid off their mortgage over 30 years was looking at a jackpot of wealthy when they retired. Renters? Nothing. Just sniveling ants trying to keep their rent control. If you take a long term perspective, buying is ALWAYS a no-brainer jackpot lottery system for your retirement. And, no, being down on your purchase from 2010 does not negate this.

Wow, anyone who bought a studio or 1BR in the 1990s is sitting on about $300,000 of cold hard cash for apartment sitting. Real estate is truly a money tree, if there ever was one. Oh, and you'be be living mortgage free by now as well. For the rest of your life.

NOT BUYING NOW VS. NOT BUYING EVER? BIG difference. Sure, this is a stupid time to buy at inflated prices after prices have gone up x00% in the last x years. Anyone who already bought from 1850 to 2008 has made out like a robber baron. That boat has sailed. Anyone who bought in 2009 or 2010 lost lost money. BUT, anyone who never EVER buys in their entire lifetime is a stupid f*cking renter idiot funding someone else's retirement. It's an important clarification that some here are too dumb to understand.

I am 100% agreement that prices are headed down. If you're not already sitting on a mountain of pre-2008 profit, then don't bother. That ship has sailed. Owners should now just concentrate on paying off the mortgage, and living rent free for the rest of their lives. Renters, well, I guess can just keep paying off their master's mortgage.

Seeing as most of us are lacking in time machines to go back to 1980 and purchase townhouses for a pittance, the OP was specifically discussing the recent declines and rebound. I'm not sure how much macro data helps as there are so many factors individual to each transaction. All I can say is that if we had waited to buy we would not presently be able to afford to buy our apartment. We bought two years ago and assuming the two units in same line as ours close for contracted price we'll have gotten almost a 25% equity bump.

Call it paper wealth, call it a delusional bubble, call it what you will, but our ownership costs are slightly less than what it costs to rent in our building (which has rentals, lots of 'em). I shudder to think what our last rental now costs in this market. Heck of a lot more than we could afford to pay now. That said, ownership has not been a picnic and I have missed the flexibility of renting at times.

>Seeing as most of us are lacking in time machines

What a loser.

greensdale: "So you were just posting based on the headline without understanding or supporting the content?"

I am really still not sure why you are arguing with me. Miller-Samuels is the data source for rent per square feet being down 4% YOY. Again, here is the source:

http://www.elliman.com/pdf/17a86eedbfb4d049c96b9ded81134763ff32afb5

If you don't think his data is correct, take it up with him. Since Wall Street firms, Bloomberg, the WSJ, and the New York Fed(in their beige book) all cite him as a reputable authority, I am assuming his figures are correct. There is nothing for me to interpret or understand beyond this. If you don't think HIS stats don't make sense, take it up with him.

As for my official rent figures from the US government - if you DON'T think NYC rents are actually up only 2.5% year over year (and they adjust for size AND quality), take it up with the government. I did not create there figures either.

http://www.bls.gov/ro2/cpinynj.htm

Now, you are welcome to show other stats showing that rents are indeed "soaring", but the stats I cited say they are not.

Green is arguing with you because it is hunters burg.

>If you don't think his data is correct, take it up with him

But you reposted it. Do you not stand by it?

>Now, you are welcome to show other stats showing that rents are indeed "soaring", but the stats I cited say they are not.

Nice sleight of hand. I never said rents are soaring. YOU posted an article that rents are increasing, just not increasing as much. Then you tried to change "rents not increasing as much" into "rents decreasing". But you say I need to take a statistic class.

Hi C0C0

"But you reposted it. Do you not stand by it?"

Are you insane? Yes I stand by it, period.

" YOU posted an article that rents are increasing, just not increasing as much. Then you tried to change "rents not increasing as much" into "rents decreasing". But you say I need to take a statistic class."

That is not at all what I did now or ever. No slight of hand. I was nakedly transparent in this thread and the other. I said by ONE measure, median rents in Manhattan, rents are up less than 1% YOY. By ANOTHER measure, which I think is the best, they are down 4.3% YOY if you measure price per square foot in Manhattan. By a third measure, average rents (adjusted for size and quality) were up only 2.5% YOY for the NYC metro area. The first two figures were from M-S, who is cited as a source by the New York Fed frequently and by Wall Street analysts. The third figure is from the the BLS. By any reasonable measure, rents are either down YOY in December or up only slightly.

I ALSO showed you M-S's average price PSF, median rents, and average rents going back 15 years, inflation-adjusted. Also showing rents unchanged in real terms for more than a decade.

No matter which stat you look at it, rents are not going up.

I am not really certain what you are arguing about, exactly.

Again, if you don't think my stats make sense, take them up with BLS or M-S. I take my stats as authoritative.

Except you disavowed your own statements.

Except you provided links to nonsense.

Except you provided clear documentation of things moving one way, and then tried to claim the opposite.

Except you seem to want to ignore evidence.

Except you did say I should take a statistics class. And I have.

Stop digging Jason. You are in a hole.

When did I disavow any statement I made? Do you mean when I re-read the M-S report after having merrely perused the Bloomberg story without looking at the source data?

I said you could look at the data several ways, and every way shows rents not going up or soaring. The links I provided are to authoritative sources. You don't like those data sets, take it up with the data provided.

There is no "digging". What "evidence" am I ignoring? There were months for months end when rents WERE going up per the same sources I cited - and THEN I said its silly to DENY rents going up. You can see it on several threads. Now we have two months in a row were by several measures rent increases are either slowing, or they have been reversed.

Since when is Miller-Samuel and the BLS "nonsense?" What "evidence" do you offer? I offer links to empiracal data. What do you offer? What links do you provide? None, nothing.

> said you could look at the data several ways, and every way shows rents not going up or soaring.

Well, no, not until 2 posts ago did you say you could look at the data more than 1 way.

>and every way shows rents not going up or soaring.

But which is it? Which position do you take Jason ? The two positions are not the same. I didn't say rents are soaring. But they area increasing. You provided a lot of detail on them increasing. But it seemed that you didn't like that.
So you tried to take a position that it could both go up (but not by much) and that price per square foot would decline. For both to happen, that's difficult, but not impossible.
Trouble is, you haven't shown how it is possible.
But you did throw out links that had no relevance.
You did insult me and accuse me of lacking sufficient statistical capabilities.
You did play several argumentative tricks in order to subtly backtrack on key positions.

So what do you want to do now Jason? Stop digging the hole you are in?

You are a strange bird. The data I provided is not mutually exclusive in any way, numb-nuts.

Since most of it comes from Miller-Samuel, I assume its internally consistent. Since this thread is about rents soaring, I used a common rhetorical tactic of showing lots of data (again, none mutually exclusive) showing that at most, rents went up slightly more than inflation.

In any argument on any topic, its very common to through lots of stats to back up one's point.

For example in the global warming so-called debate, people will cite several different set of actual climate stats, as well as the geological record, tree rings, the ice core, coral reefs, etc. When discussing whether or not one should buy a stock, analysts use DCF analysis, valuation ratios, and qualitative analysis. If discussing who might win the super bowl, odds makers throw out a ton of stats.

The fact that I gave several internally consitent and non-contradictory stats showing that rents are barely up faster than inflation at the most YOY in December is hardly something worth anyone other than a crazy person getting upset about.

"You provided a lot of detail on them increasing....So you tried to take a position that it could both go up (but not by much) and that price per square foot would decline. For both to happen, that's difficult, but not impossible."

Again - you are insane. Since ALL three data sets showing the data on average price increasing AND median price barely increasing AND PPSF decreasing YOY come from the same source, they are all true until proven otherwise. You are the one saying one must be true but not the other ones, not me.

So here, for the 8th time, is the source of both your data and my own:

http://www.elliman.com/pdf/17a86eedbfb4d049c96b9ded81134763ff32afb5

This short document says that average rents are up 10% YOY, median rents up 1%, and rents per square foot down 4% yoy. Why should we assume that ONLY the latter stat is incorrect, and the rest correct? If one is too assume that any of the stats are incorrect, why not assume the first one is incorrect? I maintain that they are ALL correct, until shown otherwise. You have yet to show any stats from any source (other than my SAME sources.)

"Debby Doubters"?

I think he/she is making a pun on the 1960s expression "Debby Downer" or the SNL character of the same name.

>This short document says that average rents are up 10% YOY, median rents up 1%,

So, rents are up?

oops! http://www.washingtonpost.com/business/economy/housing-emerges-as-economic-bright-spot-after-years-in-the-dark/2013/01/28/68c4bd74-6700-11e2-9e1b-07db1d2ccd5b_story.html?hpid=z1

petrfitz: "oops!"

Oops indeed:
"House Prices In New York City Are Not Going In The Right Direction, And It's Because Of Wall Street Bonuses"

"( ) while housing rebounds nationally, New York is not looking so hot according to the latest Case-Shiller home price report."

http://www.businessinsider.com/case-shiller-new-york-housing-market-falls-in-november-2013-1

Lower WS CASH bonuses certainly are making their effect felt but many in the industry are instead getting stock with relatively long lock-up periods. This has been going on for several years. As the financial services sector heals and grows (which it will again) and the stock of these financial institutions stabilize and rise, you may have some nice pent-up demand down the road as these shares vest. I'm semi-bullish in NYC RE.

illegal renting rocks

Actually, Wall Street bonus is very good this year. Look at GS. Their average compensation is 9% higher than the the prior year per head. Employees in NY actually get a even higher percentage raise. Thank you to their higher ratio of headcounts in "high value" locations, like India. Most people there enjoy 5 figure compensations.

"House Prices In New York City Are Not Going In The Right Direction, And It's Because Of Wall Street Bonuses"

They're not even trying to hide their prejudice, are they? For those of us who haven't yet bought, or whose next purchase will be more expensive than our current home, *down* is the "right direction".

I am more than happy with 900 sq ft apartments in the LES being snapped up at $4K per month. Also all the data being cited is city wide. My comments above were specific about prime, good, decent neighborhoods. The rents in these areas are through the roof. The rents and sales in the remainder of the city are whats keeping the overall numbers mild. Certain areas are hot, others are holding steady or slightly dropping hence the overall flat numbers.

petr, how's Pitt St?

Ah, yes. Your apts are up lots, evnyc's apt is up 25% in the last two years. Given that the SE index of same-apt resales puts Manhattan at up 4.2%, that means for every apt that is up 25% over the last two years there should be one that is down 16.6%.

Anyone seen an apt whose value dropped 16.6% Nov 2010 to Nov 2012?

Real #'s - last year my LL wanted to increase from $3900 to $4350. We ended up staying at $3950. This year offered $4050. We didn't bother to counter as we were moving to a bigger apartment. This is an LL with over a dozen large rental buildings in the city. I don't think that even matches inflation.

petrfitz, you sold everything in 2010 and bought back in 2012. Isn't that bad timing?

yeah the LES is hurting - http://www.thelodownny.com/leslog/2012/07/four-east-houston-lots-sold-for-12-4m.html also not to mention the lot on Houston and D that sold for $25 million..... Keep slingin those arrows!

Inonada - I dont market time I buy the right properties at the right price

Instead of buying an apt I'm putting all my money in the stock market. Now is the time.

Joey you should go all in on RIM, Nokia and Gold now....

But perifitz you bragged about selling all your real estate holding back in 2010. Which means you probably put it on the market in 2009. Guess what? you put your properties up for sale at the bottom of the market cause you got scared.
The fact of the matter is that you should of held onto your properties and it's now frustrating for you to see your sold properties now going up in value.
So now your pissed off and taking your frustrations out on this board because you took everyone's advice to sell real estate in 2009.

Can we get confirmation on the transaction from User_Usertofferson?

man the haters are still here and as full of hate as they were in 2008!

Perfitz, unfortunately you listened to the haters in 2008 put you apt on the market at he in 2009 and sold in 2010. Now that same property that you sold at the bottom of the market has skyrocketed and your kicking yourself for listening to those haters. Hating the haters won't make you feel any better.

Thanks for your rent check Joey. I enjoy putting 50% of your take home pay into my bank account each month.

The comments are amazingly simplistic , idiotic , and ... Hilarious

"So, rents are up?"

Not on a per square foot basis, no. The average rent is up, as the Prudential report clearly shows, because lofts, luxury, and ultra-luxury rentals and 3+ bedrooms are all up by so much more than the overall average or than the mean apartment. The median apartment is up 0.8%, while the costliest apartments are up like 20-40% YOY. Its all in that short little document. The BLS says, ajusted for size and quality, NYC rents are up 2.5% YOY, barely above 2.1% overall inflation. No "soaring" rents.

What I have been saying for like 20 posts:

"The Manhattan rental market continues to display a “strange dichotomy,” as Douglas Elliman’s director of rentals Mark Menendez put it, with rents unseasonably strong at the high end, and both renters and landlords believing they can do better in other market segments. In December, the median rent for a Manhattan apartment rose 0.8 percent year-over-year, to $3,150 from $3,125 per month, according to Douglas Elliman’s December rental report, released today.

However, the average rent climbed a whopping 10 percent year-over-year in December, to $3,973, up from $3,613, per Elliman’s numbers. The difference takes into account the way rents at the upper end can skew the average, and lends credence to a trend brokers have repeatedly described to The Real Deal: the luxury rental market is white hot.

At the same time, at the lower end of the market, tenants and landlords were out of synch, Menendez said. Renters “are starting to shop their rents — they are convinced they can move and find better rent,” ..."

http://therealdeal.com/blog/2013/01/10/manhattans-q4-rental-market-it-was-the-best-of-times-it-was-the-worst-of-times/

"...median rent—Miller's preferred metric since it removes the outliers..."

"...Jonathan Miller, preparer of the Elliman report, found that [median] rents rose just 0.8 percent in December, which followed 1.6 percent and 1.4 percent increases in October and November..."

"....Luxury and super luxury rents, however, outpaced the whole market, with the top 10 percent of rents jumping nearly 16 percent since last year. Super luxury rents rose even more, spiking 22 percent to more..."

...Miller says we should expect more of the same in the coming year. "Rents are expected to remain elevated, but not expected to see same growth because the key drivers of rising employment, tight credit, and low vacancy are not expected to change much in 2013," he explains. "The 'froth' was pulled out because some of the excess rental demand moved over to purchase market."..."

http://ny.curbed.com/archives/2013/01/10/rising_rents_slow_in_4q_more_of_the_same_expected_for_2013.php

Ok so rents are up, but if you do a lot of adjustments (also known as fuzzy math), get really angry, and give a headache to your audience, then rents are down on a price per square foot basis.

Honey, I shrunk the apartment!

NYC prices down 1.2% are more than enough to pay for my rent which only increased 2%.

"Ok so rents are up, but if you do a lot of adjustments (also known as fuzzy math),"

Wrong again. The SAME source that says they are up overall on AVERAGE is the SAME source that says they are down PSF. There are not a "whole lot of adjustements" going on. Just dividing total rents by total square footage. The SAME source says his preferred measures are PPSF and median rents. Median rents are up only 1%. I assume you are just trying to be an asshole, because you know I have said 48 times now that TOP is wrong - rents are not "soaring" unless you are renting at the very high end. Median rents are up 1% YOY, 2.5% per the BLS NYC metro wide YOY, and PSF down YOY.

Rents are up but apartment sizes increased? Are these Magic Grits?

"Rents are up but apartment sizes increased? Are these Magic Grits?"

Its just one month. And for the math to work, YES, the average apartment size must have increased.

In just one month.

Do luxury rentals have a higher turnover rate than the average Manhattan apt?. Can it be that the reason why the average apt rent yoy hasn't risen that significantly may be due to a higher proportion of lease renewals in this class of apartments compared to the luxury and super luxury market.? Maybe the latter group are more mobile.

I wish Jmiller would come back on these boards and explain himself. I may email him and ask him to. he has before.

>I wish Jmiller would come back on these boards and explain himself. I may email him and ask him to. he has before.

He has a lot to explain. Like rents up, but supposed rental psf down for the whole market.
In the mean time, you can continue to try to explain for him. Maybe post another link to something irrelevant.

jason, your assumption is correct, by this reader anyway.

Which assumption is correct?

Other than petrfitz, no one here is saying that rents are soaring.
Not soaring doesn't mean going down.

I asked: "Question for you or a colleague – how is it that average rents are up 10% YOY in Manhattan in December but rents PSF are down 4%? I assume average apartment size was higher due to a lot of large, high-end units distorting the market. Second: is this common – for average rents and rents PSF to diverge like this. Please and thanks."

He replied:

"Jason,

First: correct - why I always base my primary view on median.

Second: common would be overstatement but it's not uncommon. When we see shifts in mix as market enters a new period.

best,

Jonathan J. Miller, CRE, CRP
President/CEO

MILLER SAMUEL INC.
Real Estate Appraisers & Consultants..."

In one year, taking into account all of the rental apartments in Manhattan,, there was enough new supply into the marketplace such that in one year the average square footage of all the apartments in Manhattan increased by greater than 4%. That is a lot of new supply in Manhattan since existing apartments can't change their size.
And so, with all of this new supply that came online in Manhattan in just the last one year period, the average rent across all rental apartments in all of Manhattan was still up in the last one year, despite that when a market is flooded with new supply, one would expect weakness in pricing, concessions, and the like. But that didn't happen in Manhattan in this past one year.

"In one year, taking into account all of the rental apartments in Manhattan,, there was enough new supply into the marketplace such that in one year the average square footage of all the apartments in Manhattan increased by greater than 4%. That is a lot of new supply in Manhattan since existing apartments can't change their size."

Wait a minute; is that the only possible conclusion? Couldn't the average square footage increase because of the destruction of smaller apartments (tenement demolished for a luxury higher-SF-per-apartment building) or because of rich buyers combining multiple apartments?

>destruction of smaller apartments (tenement demolished for a luxury higher-SF-per-apartment building)

Enough of this across all of the rental apartment stock across Manhattan?

>rich buyers combining multiple apartments?

We are talking about the rental market.

Greesnsdale is a f#&*ing moron. This survey was JUST for apartments that rented in December 2011 and December 2012. Neither this or the CitiHabititats or any or other survey purports to show what ALL apartments are renting for. just those that rent (or for sales surveys, sold) in that particular period.

Are you serious? Are you so stupid that you don't know this?

3x0, if your first hypothesis is true, more new expensive apartments, how in the world is that an indicator of the position that Jason wants to put forward - that the rental market is weakening?

Hey Jason, that is not what you have said at all to this point. Way to introduce new facts this late in the game.
And your logic continues to fail you, how can you draw a universal conclusion of the marketplace based on one month of data, one month that happens to reflect one of the slowest (you are familiar with slowest) months across the year?

"3x0, if your first hypothesis is true, more new expensive apartments, how in the world is that an indicator of the position that Jason wants to put forward - that the rental market is weakening?"

I have no idea; I just thought that the last sentence was mathematically unsound.

Jason, how did you get the name Jason the Angry Retard? It seems so out of character even based on your most recent post.

"Hey Jason, that is not what you have said at all to this point. Way to introduce new facts this late in the game."

No, these are ACCEPTED FACTS that don't need to be pointed out! All of these YOY market reports, whether for sales, or leasing, are ALWAYS only about the actual transactions in the period! I did not NOW just introduce this fact. Every single other person on this board BUT you already knew this.

And newsflash - EVERY Bloomberg, Real Deal, WSJ or other article about sales or rental trends in the NYC or national sales or leasing market - including Case/Schiller related things, are ALSO ONLY about transactions that occured in that period. Though the stories don't feel the need to mention this because the assume the reader knows this.

Nice try. Your point yesterday differs.

But lets have it your way, what conclusion should we draw based on a limited number of apartments transacting in the slow month of December vs the prior year December? Since one slow month, in which it is pretty clear the apartments that actually transacted differed significantly, is so key to you.