Increasing rents = future pressure on sales?

Never, because rents are falling.

Since rents are increasing but are still under 2007 levels rents are actually decreasing - stevejhx

Past 2 years sales actually didnt reflect the decline that rents went through enough.
Rents have a ways to go before affecting sales to go north.

NYCs equilibrum on rent to sales has been around the 200 times monthly rent mark. Meaning, apartment that rents for 5K a month sells for around 1 million. As long as sales are north of this rising rents should have zero impact.

"Never"

Bold statement. Renting will always be cheaper then. Let's keep an eye on this.
But seriously, Steve seems a bit out of the loop about the general state of the market at this time. At least in my neck of the woods, rentals are killing it. It can't last at this pace, but it's been impressive to say the least. In general, the sales market seems to have been suffering of late, so sjtmd, your hypothesis may come to fruition. It's worth keeping an eye on Urbandigs' metrics.

Take it from a renter - not wannabe-renter underwater co-op owners - rents are FALLING and vacancies are UP.

Allow me to posit another question: At what point will the cratering NY sales market begin to drag down the price of renting even further in NYC?

Steve has yet to explain all of this, of course:
http://therealdeal.com/newyork/articles/chetrit-group-developed-175-kent-avenue-gets-fully-leased-in-four-months-according-to-aptsandlofts
http://therealdeal.com/newyork/articles/42425
http://therealdeal.com/newyork/articles/41320

And this one, for good measure:
http://ny.curbed.com/archives/2011/10/12/568_union_is_halffull_interior_design_school_takes_on_midtown.php

Rent are falling?

Not in my (manhattan walkup) buildings. Current tenants have been signing 5-10% increses in most cases, and if they move out we have been able to get 20-30% higher rents. People still take it personally that we are raising their rents 10% though....

Sorry I missed the whole weekend of debating in the other threads (j/k)

Rents in crappy buildings in crappy neighborhoods have not increased at a rapid rate so rents are not increasing at all - stevejhx

Falling rents? This I actually can speak to as a factual matter since my family owns multiple buildings in Manhattan and rents are not falling. Now that of course doesn't talk about every single building but.....check out this week's Time Out New York and look at the examples of what people are paying in various neighborhoods for various size apartments. Overall I do not see rents falling at all. In fact, all I hear is how much rents are rising.

"if they move out we have been able to get 20-30% higher rents."

"ince my family owns multiple buildings in Manhattan and rents are not falling."

First people I would listen to regarding rents are LANDLORDS! Yup, LANDLORDS say rents are up.

Unless, of course, you go to nybits.com and look at the archived rental listings: rents are at about the same level they were in 2006.

Juicy - "Rents in crappy buildings in crappy neighborhoods": you'll have to talk to bjw on that one, because according to him, rents are rising in his nabe.

Lot's of upwardly sloping lines here steve. Is this part of the conspiracy against you?

http://www.millersamuel.com/reports/pdf-reports/DEmanhattanrentals3Q11.pdf

"Juicy - "Rents in crappy buildings in crappy neighborhoods": you'll have to talk to bjw on that one, because according to him, rents are rising in his nabe."

Steve, you're confused. Maybe people are ditching your "lovely" neighborhood (I can repost the photos if necessary), hence the lower rents you're claiming to see. As for the buildings in question in my area, I can assure you, they're quite nice. WAY nicer than the Smellington.

I think it depends a lot on the building and the neighborhood. There are places where rents are going up. However renting still makes sense versus buying until the price of a similar apartment gets down to 12-15 times annual rent. Even in the places where rents are increasing we are a long way from that. Wake me up in 2 years or so and we'll see . . .

I rent in downtown Manhattan and just got a 10% increase in my rent along with everyone else whose lease has expired.
Stevejhx you may want to check with what has been the trend in rents over the past two years in downtown. Curious to see if anyone will confirm that rents are dropping in GV, Chelsea West Village, Tribeca, Soho etc.In fact I bet the majority of the rents in these areas are at all time highs.

I am a Manhattan renter - I've rented in Manhattan since 2001. Rents are going up across the board. Period. Anyone who doesn't see that is in serious denial.

Looks flatline to me, Juicy, with - as stated, rents below 08, and if you go further back, to 2006, flatter still.

You should stop drinking - you see slope where there is none.

Actually, bjw, rents are down throughout Manhattan. Right back to 2006.

Vacancy rate in Manhattan is under 1%. Again, I am a renter (and have been for 10 years) - people need to face the facts, however.

Stevejhx = in denial

some rents are going up, some are not. landlords are clearly trying to get more. not clear whether or not that will work. some places still offering concessions but seems like less than two years ago. where are rents relative to 2007/2008? not clear at all. have we seen the impact of the bonus situation on wall street? not clear but unlikely that has been factored in yet.

is there anything concrete on the horizon that signals better days ahead? no.

jim_hones10
about 21 hours ago
ignore this person
report abuse stevejhx
about 7 hours ago
ignore this person
report abuse That's very pedophile of you, Juicy. Alas, Jimmy Ho' has no point, and neither do you: the article in the Times is COMPLETELY UNTRUE: never has The Helena advertised a 1-bedroom apartment for $5,000 a month, and their 2-bedrooms at their peak went for less than that.

The fact is, rents are now the same or below where they were in 2007. Property taxes, maintenance, and reworked co-op loans, on the other hand, do nothing but go up.

Steve, you do realize that what you write here doesn't change right? I mean, it's in black and white. You wrote it. "two bedrooms at their peak went for less than tha"

Two bedrooms have traded at, below and above that figure every year since 2007.

I don't dispute that they haven't ever had a one bedroom for $5000. The guy in the article says he received a renewal for that amount. No one else ever said they rent their one bedrooms for $5000. It seems a fixation with you, but did you read the article?

Steve, how do you explain the completely innacurate statement you made above?

>have we seen the impact of the bonus situation on wall street? not clear but unlikely that has been factored in yet.

Really? Now people need their bonuses just to pay their rent?

>Steve, how do you explain the completely innacurate statement you made above?

I've grown to admire Steve. He's like Russia in the winter - you can't be it. But that fact doesn't make their Russia's Communist economic and government models correct, just as no one can win an argument with Steve, no matter how wrong he might be or how correct you might be. So just embrace Steve's bold wrongness and move on to easier battles.

- you can't BEAT it.

See what I mean?