New rental report: Manhattan recovery not here yet

"The bottom line this month is that while the market appears to be picking up, it doesn't yet appear that the market has recovered."

http://www.tregny.com/manhattan_rental_market_report

Columbia's graduation was last week, I believe. Many colleges and universities have already had their graduation ceremonies. Less than 20% of this year's class of graduates have job offers. There will be activity because this is a high lease turnover time, but it likely will become apparent that the rental issues are but beginning.

I think Harlem doorman rents are up not because like for like units are up, but because there is a flood of brand-new much nicer than normal for harlem doorman buildings now for rent (or for rent by condo owners) like 1481 5th, Kalahari, Avalon Morningside, etc. The pre-existing doorman places are certainly down by a LOT(Susan’s court for example.)

What you hit on aboutready is best evidenced by Murray Hill and Gramercy being down below 2007 levels, or BPC being down so much. Those are areas where new bankers out of school congregated in past years...

jason, harlem interests me a great deal right now (i admit is has over the last couple of years as well). i think the condo rental prices will have to float lower, but it will be interesting to see how the community evolves. when i think of other "gentrifying" neighborhoods that then suffered for awhile during the last downturns, those neighborhoods had not had significant increases in quality housing stock prior to the beginning of the downturns. The east village and hell's kitchen both began to boom, and then retrenched, but both were ahead of Harlem in terms of retail and services but behind Harlem in terms of residential development.

for the rest of the city late summer/early fall will be very interesting to watch in terms of the rental market.

I think harlem rentals for nice doorman bldgs are already pretty much half the manhattan average...even something below 110th in East Harlem goes for 20-25% more than an identical doorman bldg at 96th. Its weird. But I think purchase prices have not come down, not asking or actual, by nearly as much. So if you want to test out the neighborhood, now is a great time to rent. To buy, I think some of these developments will be forclosed upon entirely and auctioned off over the next 12 months. then buy.

...And I say "weird" because a place at 102nd and second or 110th and CPW is the same distance from the projects as a place on 96th/broadway or 96th/lex.

Does anyone have a theory for why there would be 33% more deals in April this year vs. last? The stock of leases rolling off in any month should be fairly constant since most are for full, rather than fractional, years. The number seems odd.

Ideas (pure speculation and no data to back them up):
- landlords failed to rent some properties that came up for renewal in Jan-March and then rented them in April to whatever fraction remains this year of the annual spring/early summer new grad influx (but how could this reduced influx help total rentals to increase in the first place?)
- new condos coming on rental market either from cash-strapped FSBOs trying to defray carrying cost or developers giving up on sale market (but would construction lenders even allow the latter?)
- fewer people signed two years leases last year so there are more renewals this spring (hypothetical)

sideline - how about many more ppl laid off in 4Q08 and 1Q09, some living off of severance and others just off of savings. At some point, they capitulate, move out of their apt through broken lease, and either leave the city or find a cheaper place to hunker down.

special k has it I think. more people left this year, leaving both higher inventory and more leases signed.

I was in that situ once. Sucks. I think lots of leases are being broken.

Also, I wonder if his firm simply has MORE BROKERS than they did last year, because other firms have closed. I bet you that is a big part of it. Also, more shadow purchase inventory is now for rent.

Hey all, just wanted to jump in here and offer some possible insight / direction.

sidelinesitter - Your first 2 ideas i would agree with. There was definitely a considerable amount of inventory sitting on the side lines in the beginning of the year that has been in play lately, and there is more available rentals from private investors who purchased Condos. As for the third, i don't think this would be the case, as ppl last year were more aggressive about rentals as the sales market continued to weaken and some speculated that the rental market would actually benefit from this.
Special_K - Could definitely be a contributor. I can tell you that we have seen a HUGE number of ppl looking to downsize, or find a better deal as their leases are up for renewal.
Jason10006 - actually we have about the same number of agents as we did a year ago.

All things aside, I would speculate that our increase has been primarily from 2 things. The number of people who are still sitting the sidelines with a wait and see attitude towards sales, and just the shear number of people who realize they are paying 20-30% more than the current market for a comparable unit and are looking for a better deal.

Hope that's helpful, and thanks for allowing us to be apart of your discussions.

thanks for answering.

we got 15% off our rent starting april 1st in murray hill (what is midtown east is it above 42 street?) for our 2 bed 2 bath without too much effort. we could have gotten lower but the hassle of moving wasn't worth it although without a job we probably should have gone to a smaller 2 bedroom.

Buy now or be priced out forever!

I love that rents are dropping like 5% a month.

Very psyched for renewal time.