Would be interested to hear people's thoughts on the following data: NYC Doorman 2BR Rents: Citi-Habitats: +7.9% from January low; +0.7% YoY TREGNY: +5.1% from January low; +2.2% YoY NYC Doorman 3BR Rents: Citi-Habitats: +8.1% from January low; +2.3% YoY Citi-Habitats Vacancy Rate: 0.98%, down 43% YoY Common objections: 1. The rent increases reflect normal seasonality, not any kind of... [more]
Would be interested to hear people's thoughts on the following data:
NYC Doorman 2BR Rents:
Citi-Habitats: +7.9% from January low; +0.7% YoY
TREGNY: +5.1% from January low; +2.2% YoY
NYC Doorman 3BR Rents:
Citi-Habitats: +8.1% from January low; +2.3% YoY
Citi-Habitats Vacancy Rate: 0.98%, down 43% YoY
Common objections:
1. The rent increases reflect normal seasonality, not any kind of strengthening.
Response- Both TREGNY and C-H are now showing YoY increases.
2. The reported rents do not accurately reflect landlord concessions.
Response- This is difficult to evaluate, but concessions were rampant at this time last year, arguably more prevalent than today.
3. The data is fraudulent; it does not reflect reality, or these reports should simply be dismissed altogether as garbage.
Is #3 the only argument left that there is no evidence of strengthening in rentals?
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Response by inonada
about 16 years ago
Posts: 8085
Member since: Oct 2008
You consider a 2% YoY increase after a 20% drop over 2 years is considered strength? I call that a year of zero inflation adjusted change after a 25% inflation-adjusted drop. No doubt we'll eventually see a YoY 5-10% increase, we're just not there yet.
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Response by printer
about 16 years ago
Posts: 1219
Member since: Jan 2008
strength is a relative term. given that all the prognosticators were saying that rents have continue to fall sharply from last year's levels, the fact that they are actually up, while vacancies are down is indeed a sign of strength.
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Response by seg
about 16 years ago
Posts: 229
Member since: Nov 2009
Not enormous strength, no. Still, I cannot imagine 8% up from Jan is *entirely* seasonality. When the reported numbers show 2BRs going from $4,294 to $4,633 over just four months that is difficult to ignore. What might the YoY numbers look like in a few more months when they are comping against the very weak Nov-Dec-Jan period?
Also the vacancy rate number continues to decline and stands out.
I am skeptical of these reports, which is why I'm wondering others' thoughts, especially those closer to the actual rental market.
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Response by inonada
about 16 years ago
Posts: 8085
Member since: Oct 2008
On the vacancy rate of 0.98%, fathom me this. The report claims there are 9548 apartments available for rent. Given a vacancy rate of 0.98%, this works out to 9548 / 0.0098 = 974,286 free-market rental apartments in Manhattan. Do you think there are 974,286 free-market rental apartments in Manhattan? (The real answer is less than 200K)
Also, the May vacancy rate was 1.23% with 9974 available apartments, which works out to an inventory of 9974 / 0.0123 = 810,894 apartments. Do you think the rental inventory grew by 162K over the past year?
What I'm trying to say is that the vacancy rate number is kinda junk. Vacancy rates are probably lower, but whatever is being reported does not make any sense even at a glance.
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Response by inonada
about 16 years ago
Posts: 8085
Member since: Oct 2008
Which prognosticators said rents were falling from last year? Most were saying flattish.
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Response by inonada
about 16 years ago
Posts: 8085
Member since: Oct 2008
On the seasonality, look at Jan 2008 to May 2008 3BR number. Arguably a falling market (think Bear blowing up), yet there was an increase from $4718 to $5212: 10.5%.
Hmm...
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Response by seg
about 16 years ago
Posts: 229
Member since: Nov 2009
inonada:
If a an apartment is listed as "available", and it's on the market because a tenant has indicated a desire to move out at the end of the lease, does that mean it is necessarily "vacant"?
Without knowing exactly how these things are calculated, I would think there should be a LOT more available apartments than vacant apartments. The vacant ones should just be a subset of the available ones, no?
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Response by inonada
about 16 years ago
Posts: 8085
Member since: Oct 2008
Right you are, but that probably does not account for the 5x offage. Go poke around on SE for rental apartments, and you'll see that the average listing has been around for many months. The real story is that they ask 25-30 buildings and average that. If that's not bad enough statistics-wise, they the break that little of presumably biased data into neighborhoods.
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Response by alanhart
about 16 years ago
Posts: 12397
Member since: Feb 2007
And den dey eat da poo poo!
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Response by w67thstreet
about 16 years ago
Posts: 9003
Member since: Dec 2008
Yuckie.
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Response by seg
about 16 years ago
Posts: 229
Member since: Nov 2009
Why are the borkers/industry more beholden to the 'owners' now than they were 1 year ago when they were reporting plummeting rents?
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Response by AvUWS
about 16 years ago
Posts: 839
Member since: Mar 2008
Last year there was no data taht could be spun in a positive way. The rental market was tanking and everyone knew it. To say otherwise was to admit you were a fraud.
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Response by w67thstreet
about 16 years ago
Posts: 9003
Member since: Dec 2008
Bingo. The best liars are the ones that throw in a tidbit of truth. Like 'i went to harvard'. Yeah you were a janitor there. See.
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Response by seg
about 16 years ago
Posts: 229
Member since: Nov 2009
So we have our conclusion: Spot on #3 per the original post. Carry on.
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Response by AvUWS
about 16 years ago
Posts: 839
Member since: Mar 2008
No, not garbage. I think there has definitely been a firming up of pricing in the rental market since winter. It certainly hasn't gone up hugely but it has gone up noticeably. Still lower than it was two years ago.
But it is hard to tell what is happening when a market is moving fast. The real movement in rentals happens if product sits open and most won't be seeing that (or at least getting nervous about it) until the end of the renting season. Then, if it is a soft market, the first sign will be the recurrence of free months and "no fee".
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Response by kstiles99
about 16 years ago
Posts: 171
Member since: Oct 2009
my lease ends March 1, 2011 - i've decided to wait thru the summer and finsh my lease. I am planning to move in february so i am hoping prices drop dramatically in winter.
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Response by jim_hones10
about 16 years ago
Posts: 3413
Member since: Jan 2010
anyone want to dreg up my old posts? the common theme: lower vacancy rates will (and now indeed has) result in higher rents AND concessions being taken away.
vindicated
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Response by somewhereelse
about 16 years ago
Posts: 7435
Member since: Oct 2009
actually, your old posts say rents were up... going back a year.
You consider a 2% YoY increase after a 20% drop over 2 years is considered strength? I call that a year of zero inflation adjusted change after a 25% inflation-adjusted drop. No doubt we'll eventually see a YoY 5-10% increase, we're just not there yet.
strength is a relative term. given that all the prognosticators were saying that rents have continue to fall sharply from last year's levels, the fact that they are actually up, while vacancies are down is indeed a sign of strength.
Not enormous strength, no. Still, I cannot imagine 8% up from Jan is *entirely* seasonality. When the reported numbers show 2BRs going from $4,294 to $4,633 over just four months that is difficult to ignore. What might the YoY numbers look like in a few more months when they are comping against the very weak Nov-Dec-Jan period?
Also the vacancy rate number continues to decline and stands out.
I am skeptical of these reports, which is why I'm wondering others' thoughts, especially those closer to the actual rental market.
On the vacancy rate of 0.98%, fathom me this. The report claims there are 9548 apartments available for rent. Given a vacancy rate of 0.98%, this works out to 9548 / 0.0098 = 974,286 free-market rental apartments in Manhattan. Do you think there are 974,286 free-market rental apartments in Manhattan? (The real answer is less than 200K)
Also, the May vacancy rate was 1.23% with 9974 available apartments, which works out to an inventory of 9974 / 0.0123 = 810,894 apartments. Do you think the rental inventory grew by 162K over the past year?
What I'm trying to say is that the vacancy rate number is kinda junk. Vacancy rates are probably lower, but whatever is being reported does not make any sense even at a glance.
Which prognosticators said rents were falling from last year? Most were saying flattish.
On the seasonality, look at Jan 2008 to May 2008 3BR number. Arguably a falling market (think Bear blowing up), yet there was an increase from $4718 to $5212: 10.5%.
Hmm...
inonada:
If a an apartment is listed as "available", and it's on the market because a tenant has indicated a desire to move out at the end of the lease, does that mean it is necessarily "vacant"?
Without knowing exactly how these things are calculated, I would think there should be a LOT more available apartments than vacant apartments. The vacant ones should just be a subset of the available ones, no?
Right you are, but that probably does not account for the 5x offage. Go poke around on SE for rental apartments, and you'll see that the average listing has been around for many months. The real story is that they ask 25-30 buildings and average that. If that's not bad enough statistics-wise, they the break that little of presumably biased data into neighborhoods.
And den dey eat da poo poo!
Yuckie.
Why are the borkers/industry more beholden to the 'owners' now than they were 1 year ago when they were reporting plummeting rents?
Last year there was no data taht could be spun in a positive way. The rental market was tanking and everyone knew it. To say otherwise was to admit you were a fraud.
Bingo. The best liars are the ones that throw in a tidbit of truth. Like 'i went to harvard'. Yeah you were a janitor there. See.
So we have our conclusion: Spot on #3 per the original post. Carry on.
No, not garbage. I think there has definitely been a firming up of pricing in the rental market since winter. It certainly hasn't gone up hugely but it has gone up noticeably. Still lower than it was two years ago.
But it is hard to tell what is happening when a market is moving fast. The real movement in rentals happens if product sits open and most won't be seeing that (or at least getting nervous about it) until the end of the renting season. Then, if it is a soft market, the first sign will be the recurrence of free months and "no fee".
my lease ends March 1, 2011 - i've decided to wait thru the summer and finsh my lease. I am planning to move in february so i am hoping prices drop dramatically in winter.
anyone want to dreg up my old posts? the common theme: lower vacancy rates will (and now indeed has) result in higher rents AND concessions being taken away.
vindicated
actually, your old posts say rents were up... going back a year.
which was clearly WRONG.