http://therealdeal.com/newyork/articles/high-end-sales-return-to-manhattan-market On the rentals front, brokers say incentives for tenants are continuing to fade away, much to renters' disappointment. In March, The Real Deal reported that incentives, such as months of free rent and owner-paid commissions, or OPs, were beginning to disappear in some areas. That trend has since become even more... [more]
http://therealdeal.com/newyork/articles/high-end-sales-return-to-manhattan-market
On the rentals front, brokers say incentives for tenants are continuing to fade away, much to renters' disappointment.
In March, The Real Deal reported that incentives, such as months of free rent and owner-paid commissions, or OPs, were beginning to disappear in some areas. That trend has since become even more pronounced, said Bruno Ricciotti, a principal at Bond New York.
In March, 43 percent of Bond's rental commission revenue was paid by tenants rather than landlords, Ricciotti said. In April, that figure had jumped to 60 percent.
"That is a sign of the bottom -- that there's enough demand that apartments are renting without the need for owners to pay commissions," he said.
Not only that, but more tenants are now willing to pay the full 15 percent commission that was the norm during the boom, he said, not the 12 percent fee that's become more common lately.
Ricciotti said the trend is particularly noticeable in the firm's West Village office on Mercer Street, where 74 percent of Bond's commission revenue for April was paid by tenants. That's up from 58 percent in March.
Because the Village is one of the city's most desirable neighborhoods, it makes sense that broker fees would reappear there first. Tenants on the Upper West and Upper East sides are still less likely to have to pay a fee, he said, and renters in more marginal neighborhoods or large new development rental buildings, even less so.
"The OPs always exist the longest in the big buildings, and the buildings on the outskirts," he said.
Still, this is only the start. "By next month it will probably spread beyond the Village," he said. "It's like the beginning of the wave."
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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
From bruno's lips....
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
can't hear you, speak up please
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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
How cares?
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Response by rb345
over 15 years ago
Posts: 1273
Member since: Jun 2009
Starting in late April my call volume on apts for rent spiked
dramatically. We're not quire at the point where I can again
insert a right of primogeniture as a lease rider, but we could
be getting there.
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
don't tell anyone hear you are busy and doing well as either a landlord or a re agent, rb please. they won't believe you anyway.
it is funny watching people lose out on an apartment or two because they think the market is the same as last year.
i havent done a deal for less than asking in 3-4 months, and every time i turn around, a different landlord is pulling the op
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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
If this is true why are you trying so hard to convince us?
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Response by bgrfrank
over 15 years ago
Posts: 183
Member since: Apr 2010
This is nothing. We have oil spilling nonstop which is a natural disaster and plus that absolutely nothing from the administration on the dead oil rig workers.
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
because i like saying i told you so
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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
Anonymously?
What's the point?
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Response by rb345
over 15 years ago
Posts: 1273
Member since: Jun 2009
Jim:
I rented three apaartments last week and hope to rent two
more this week, thereby filling up all my vacancies. Easily
the toughest market I've been in since I started 25 years
ago other than the 9/11 market.
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
bgrfrank
8 minutes ago
ignore this person
report abuse This is nothing. We have oil spilling nonstop which is a natural disaster and plus that absolutely nothing from the administration on the dead oil rig workers.
and? i am sure there are discussion forums for man made disasters out there somewhere
this is a nyc real estate blog
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Response by bgrfrank
over 15 years ago
Posts: 183
Member since: Apr 2010
You have no idea what you are talking about. Yes for sure this is a real estate blog and I'm sure you are one of those "location location location" shouters. Well, our location is New York. And between our energy going up and our terrorists attacking. NOt to mention even if Louisiana is far away it affects our whole country and environment. This is a disaster and I just wonder why our government is sitting there in Washington, just as bad as Bush and Katarina, and then Obama says nothing about people who died on the rig. He doesn't care?
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
bgrfrank
2 minutes ago
ignore this person
report abuse You have no idea what you are talking about. Yes for sure this is a real estate blog and I'm sure you are one of those "location location location" shouters. Well, our location is New York. And between our energy going up and our terrorists attacking. NOt to mention even if Louisiana is far away it affects our whole country and environment. This is a disaster and I just wonder why our government is sitting there in Washington, just as bad as Bush and Katarina, and then Obama says nothing about people who died on the rig. He doesn't care?
i'll repeat: this is a nyc real estate blog. if you could prove a correlation between an oil spill and its effect on the local market that would be one thing.
as for terrorists, there is already a thread there. maybe you can talk there about the oil and dead oil riggers too
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Response by bgrfrank
over 15 years ago
Posts: 183
Member since: Apr 2010
Well sorry, this discussion talked about tide which can be associated with the spill.
We have a Navy Seal on trial. That's not good for anyone in America.
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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
Easy Jim bone. You never know. Large frank could be in the market for one of your overpriced rentals.
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Response by bgrfrank
over 15 years ago
Posts: 183
Member since: Apr 2010
You are adding nothing with your large frank.
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
we'll never know cc.
i think frank might be a bit deranged.
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Response by bgrfrank
over 15 years ago
Posts: 183
Member since: Apr 2010
Ok you two enjoy each other.
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Response by jhochle
over 15 years ago
Posts: 257
Member since: Mar 2009
Jim, I can tell you that the building I currently live in is no longer giving out free months, and they are much less flexible on pricing than last year. Just one building, but it seems to fit with the article you cited.
I guess you would expect concessions to go away before any rental price increases flow through the market.
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Response by jim_hones10
over 15 years ago
Posts: 3413
Member since: Jan 2010
no doubt your landlord owns a portfolio of buildings as well....
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Response by jhochle
over 15 years ago
Posts: 257
Member since: Mar 2009
Avalon. I live in a pretty desireable area, so I am not sure if their Harlem property is as strong.
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Response by NYCROBOT
over 15 years ago
Posts: 198
Member since: Apr 2009
This is likely all just a false start, a dead-cat bounce if you will. We still have VERY serious problems in our economy and we are seeing some improvement in the economy due to the sugar high from all the stimulus money.
Our GDP is growing very anemically and it is mostly from temporary improvements in consumers spending down their savings (savings rate now back down to 2-3% from a high of 8-10% last year), rather than from real wealth creation.
The natural tendency is to look at the here and now and not a little down the road. Sure, right now things are looking a LITTLE better. But let's not over-read this. Things are NOT really better and are likely to get worse again before struggling back to normalcy in 3-5 years.
I wouldn't be doing cartwheels now when you see the severe storms still on the horizon. We should be worrying about a generational decline in our standard of living rather than whether the concessions are abating for a few months (don't worry they will be back).
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Response by Dwayne_Pipe
over 15 years ago
Posts: 510
Member since: Jan 2009
"i think frank might be a bit deranged."
Thats good. I was getting lonely...
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Response by 30yrs_RE_20_in_REO
over 15 years ago
Posts: 9880
Member since: Mar 2009
The real thing you have to look at it why these incentives get offered in the first place: they get started when landlords know that there is more stock coming on the market than the market can easily absorb and NEED to give incentives. There is an awful lot less stock on the market now ("The residential vacancy rate in March 2010 was 1.38%, the lowest since August of 2008." CitiHabitats Q1 2010 report), and I think (but not sure) that there is less new rental product coming on the market (currently in the pipeline) than there has been in a while. Both these things contribute to the erosion of incentives. But even though they may be increasing the "net effective rent", unless you plan on moving every year or two, you get them only the one time you move in, AND (BIG AND) you have to remember that for landlords/developers carrying LOTS of vacant apartments, they really aren't giving anything away by renting an apartment with any amount of "free rent" where there was a high probability the unit would have been vacant (and collecting zero rent anyway).
When we see BOTH the erosion of incentives AND prices rising, then we know things have turned around, but only one and not the other is interesting, but more proof of market absorption than market price strength.
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Response by inonada
over 15 years ago
Posts: 7952
Member since: Oct 2008
Honesy-Bonesy, you missed the point of the article. You missed your opportunity to buy.
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Response by inonada
over 15 years ago
Posts: 7952
Member since: Oct 2008
30yrs, stop trying to add intelligent discourse to this thread, dammit.
On a more serious note, this all seems pretty cyclical to me. There's an uptick in the summer months, and we're at the start of the seaons for that. How much is simply that?
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Response by jason10006
over 15 years ago
Posts: 5257
Member since: Jan 2009
Jim Jones does not believe in cyclicality.
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Response by w67thstreet
over 15 years ago
Posts: 9003
Member since: Dec 2008
Uhhhhhhhh. Jimnutz, I thought you set the mkt. Did the has been secretary of the LL call the key Sherpa and say 'i'm tired of paying to get a tenant in! I liked it better when they paid!! Tell my key Sherpa no more concessions!
So you sit down and start plugging se with 'no more concessions!' threads ad nauseum. Or did you stake your job on the line and tell all the LLs 'no more concessions!'
Which was it, did you set the 'mkt' or r you just posting on se while lubing all the key cylinders? Flmao.
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Response by stevejhx
over 15 years ago
Posts: 12656
Member since: Feb 2008
"brokers say"
Story over.
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Response by jhochle
over 15 years ago
Posts: 257
Member since: Mar 2009
Steve
Do you think that prime Manhattan (west village, etc) will show y/y rental price increases this summer (June/July)?
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Response by 30yrs_RE_20_in_REO
over 15 years ago
Posts: 9880
Member since: Mar 2009
"How much is simply that? "
Some, except historically it's a little early. If we were in July, I might answer differently. September 1st has historically been the biggest move-in date.
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Response by aboutready
over 15 years ago
Posts: 16354
Member since: Oct 2007
it's too early to tell. there is no way of knowing how many people signed two-year leases in the summer of 2008 and would welcome the chance to vacate upon the lease ending this year. i doubt the ll's know either.
30yrs, there's still an awful lot of unabsorbed new rentals, i think. i know some of the landlords can and were even expecting to carry a lot of vacant apartments for some time, but not all can.
From bruno's lips....
can't hear you, speak up please
How cares?
Starting in late April my call volume on apts for rent spiked
dramatically. We're not quire at the point where I can again
insert a right of primogeniture as a lease rider, but we could
be getting there.
don't tell anyone hear you are busy and doing well as either a landlord or a re agent, rb please. they won't believe you anyway.
it is funny watching people lose out on an apartment or two because they think the market is the same as last year.
i havent done a deal for less than asking in 3-4 months, and every time i turn around, a different landlord is pulling the op
If this is true why are you trying so hard to convince us?
This is nothing. We have oil spilling nonstop which is a natural disaster and plus that absolutely nothing from the administration on the dead oil rig workers.
because i like saying i told you so
Anonymously?
What's the point?
Jim:
I rented three apaartments last week and hope to rent two
more this week, thereby filling up all my vacancies. Easily
the toughest market I've been in since I started 25 years
ago other than the 9/11 market.
bgrfrank
8 minutes ago
ignore this person
report abuse This is nothing. We have oil spilling nonstop which is a natural disaster and plus that absolutely nothing from the administration on the dead oil rig workers.
and? i am sure there are discussion forums for man made disasters out there somewhere
this is a nyc real estate blog
You have no idea what you are talking about. Yes for sure this is a real estate blog and I'm sure you are one of those "location location location" shouters. Well, our location is New York. And between our energy going up and our terrorists attacking. NOt to mention even if Louisiana is far away it affects our whole country and environment. This is a disaster and I just wonder why our government is sitting there in Washington, just as bad as Bush and Katarina, and then Obama says nothing about people who died on the rig. He doesn't care?
bgrfrank
2 minutes ago
ignore this person
report abuse You have no idea what you are talking about. Yes for sure this is a real estate blog and I'm sure you are one of those "location location location" shouters. Well, our location is New York. And between our energy going up and our terrorists attacking. NOt to mention even if Louisiana is far away it affects our whole country and environment. This is a disaster and I just wonder why our government is sitting there in Washington, just as bad as Bush and Katarina, and then Obama says nothing about people who died on the rig. He doesn't care?
i'll repeat: this is a nyc real estate blog. if you could prove a correlation between an oil spill and its effect on the local market that would be one thing.
as for terrorists, there is already a thread there. maybe you can talk there about the oil and dead oil riggers too
Well sorry, this discussion talked about tide which can be associated with the spill.
We have a Navy Seal on trial. That's not good for anyone in America.
Easy Jim bone. You never know. Large frank could be in the market for one of your overpriced rentals.
You are adding nothing with your large frank.
we'll never know cc.
i think frank might be a bit deranged.
Ok you two enjoy each other.
Jim, I can tell you that the building I currently live in is no longer giving out free months, and they are much less flexible on pricing than last year. Just one building, but it seems to fit with the article you cited.
I guess you would expect concessions to go away before any rental price increases flow through the market.
no doubt your landlord owns a portfolio of buildings as well....
Avalon. I live in a pretty desireable area, so I am not sure if their Harlem property is as strong.
This is likely all just a false start, a dead-cat bounce if you will. We still have VERY serious problems in our economy and we are seeing some improvement in the economy due to the sugar high from all the stimulus money.
Our GDP is growing very anemically and it is mostly from temporary improvements in consumers spending down their savings (savings rate now back down to 2-3% from a high of 8-10% last year), rather than from real wealth creation.
The natural tendency is to look at the here and now and not a little down the road. Sure, right now things are looking a LITTLE better. But let's not over-read this. Things are NOT really better and are likely to get worse again before struggling back to normalcy in 3-5 years.
I wouldn't be doing cartwheels now when you see the severe storms still on the horizon. We should be worrying about a generational decline in our standard of living rather than whether the concessions are abating for a few months (don't worry they will be back).
"i think frank might be a bit deranged."
Thats good. I was getting lonely...
The real thing you have to look at it why these incentives get offered in the first place: they get started when landlords know that there is more stock coming on the market than the market can easily absorb and NEED to give incentives. There is an awful lot less stock on the market now ("The residential vacancy rate in March 2010 was 1.38%, the lowest since August of 2008." CitiHabitats Q1 2010 report), and I think (but not sure) that there is less new rental product coming on the market (currently in the pipeline) than there has been in a while. Both these things contribute to the erosion of incentives. But even though they may be increasing the "net effective rent", unless you plan on moving every year or two, you get them only the one time you move in, AND (BIG AND) you have to remember that for landlords/developers carrying LOTS of vacant apartments, they really aren't giving anything away by renting an apartment with any amount of "free rent" where there was a high probability the unit would have been vacant (and collecting zero rent anyway).
When we see BOTH the erosion of incentives AND prices rising, then we know things have turned around, but only one and not the other is interesting, but more proof of market absorption than market price strength.
Honesy-Bonesy, you missed the point of the article. You missed your opportunity to buy.
30yrs, stop trying to add intelligent discourse to this thread, dammit.
On a more serious note, this all seems pretty cyclical to me. There's an uptick in the summer months, and we're at the start of the seaons for that. How much is simply that?
Jim Jones does not believe in cyclicality.
Uhhhhhhhh. Jimnutz, I thought you set the mkt. Did the has been secretary of the LL call the key Sherpa and say 'i'm tired of paying to get a tenant in! I liked it better when they paid!! Tell my key Sherpa no more concessions!
So you sit down and start plugging se with 'no more concessions!' threads ad nauseum. Or did you stake your job on the line and tell all the LLs 'no more concessions!'
Which was it, did you set the 'mkt' or r you just posting on se while lubing all the key cylinders? Flmao.
"brokers say"
Story over.
Steve
Do you think that prime Manhattan (west village, etc) will show y/y rental price increases this summer (June/July)?
"How much is simply that? "
Some, except historically it's a little early. If we were in July, I might answer differently. September 1st has historically been the biggest move-in date.
it's too early to tell. there is no way of knowing how many people signed two-year leases in the summer of 2008 and would welcome the chance to vacate upon the lease ending this year. i doubt the ll's know either.
30yrs, there's still an awful lot of unabsorbed new rentals, i think. i know some of the landlords can and were even expecting to carry a lot of vacant apartments for some time, but not all can.