Keep renting? Ouch!

> I've just never totally subscribed to the notion that Wall Street dictates everything in this city. As I told stevejhx last week, this ain't a one-horse town. Though I can safely tell Lance that most people who can do math and bought that recently aren't laughing as hard as he thinks they are.

I will respectful disagree that this is still a one-horse town. Look at how Bloomberg is trying to create a Stanford East and the likes. If WS was still booming, I doubt that even crossed his mind because the city, i.e., public infrastructure, can only support so many NY'ers before you get those 1 PM and 4 AM traffic jam that the Silicon Valley was so famous for.

If you look at the jobs that most Will'burghnites are employed, what are they ? I believe they are mostly service jobs right ? Who do they cater or service to ? I bet a large majority of them work in the Manhattan and services the WS-type and industries, like law firms and PRs and accounting firms, supporting WS.

str33t, you don't think this is a tech, media, fashion, healthcare hub at all? Plenty of industries have thrived in this city.

I don't think Bloomberg is trying to bring Stanford here because WS is on the decline; my guess is he'd have done it anyway. Traffic jams are not a big enough inconvenience compared to more jobs and more $. Plus, that would have made his plans for a toll to enter Manhattan a lot more palatable.

Don't know where most Burgers (ha!) are employed, but I know people in all sorts of work: law, tech, health, film, advertising, government, non-profit, etc. It's fairly diverse.

Wall St has always been the largest part of the economy where employees were paid sums that allowed them to afford high-end real estate and family-rearing in NY. Wall St was where 30's professionals could easily be paid into the 7 figures. The best paying jobs away from Wall Street have always provided service support for Wall St. Wall St will continue to shrink, as will comp for those lucky enough to keep/get jobs there.

To suggest that jobs in law, tech, health, film, advertising, government, non-profit, etc will pay such that employees in these fields will replace Wall St employees as buyers of expensive NY real estate stock is absurd.

There will always be numbers of people who own businesses and make very good money. But income for employment will be lower across the board based on Wall St shrinkage.

All a good thing. RE in NYC is overpriced, and Wall St's portion GDP has grown ludicrously to totally unsustainable levels.

Shrinkage a comin'.

Bullish??

"Wall St has always been the largest part of the economy where employees were paid sums that allowed them to afford high-end real estate and family-rearing in NY"

No, it has not "always" been. That's why we call it a bubble.

"To suggest that jobs in law, tech, health, film, advertising, government, non-profit, etc will pay such that employees in these fields will replace Wall St employees as buyers of expensive NY real estate stock is absurd."

No one is suggesting that, bottoms. What is true though is that plenty of people were and have been making healthy livings in these other industries here, regardless of what happens to Wall Street. I'm not saying there's zero correlation - I just haven't seen the evidence that suggests "WS sneezes and everyone else gets a cold." Seems like an overstatement to me.

blow, nobody is saying NYC will collapse. But once you lose a good chunk of your buyers, it is normal that prices will come down. Even if all else stays constant there is nobody to fill the gap. Who do you think will take a place of that now fired WS dude who would have bid 4mm on a place?

Didn't Wall Street lose 21% of its jobs in 2000? What happened then?

don't think that happened in 2000' maybe 1987..

JButton (I assume you're addressing me with that really clever nickname), more than a couple people on here have said NYC will collapse once upon a time, but like bottoms, you're suggesting I said something I didn't. Of course it's normal prices will come down. They already have!

Also, people from other industries have and will buy $4m apts. It's just that the $2.5-3m apts won't all go for $4m. That's the real point here.

i have to agree with Butts on this.. incomes continue to fall.. taxes are going up.. growth is down. financing difficult.. no wealth effect .. all still delevering threats of another recession linger- NY RE continues to trend down..

people who are employees in non-WS industries will not be buying 3mm and up apts--in advertising? youre kidding? tech? unless they get lucky as the janitor at google, it aint happening--well-paid techies make slightly into the six-figures--people who own non-WS businesses may be able to afford 3mm $ apts, but not employees--WS employees and, to a lesser degree, employees of accting and law firms that support WS have always been big buyers of high end NY RE--they are a dying breed--it will impact all aspects of 1% consumption in the city esp RE--will the city collapse? who the hell knows?--but a huge source of buyers of NYRE, who have always played a big part, will be gonzo

bullish?

"Who do you think will take a place of that now fired WS dude who would have bid 4mm on a place?"

Someone in another industry bidding a much more realistic $1.75 million.

str33: it is exactly because the sovereigns will be responsible for the bank debt that is the problem. Here is your comment followed by excerpt from Sinn quote in der Speigel. If you think that europe will just muddle through, you need to be a regular reader of der spiege -- they regularly describe a horror show.

str33:[the bailout money will go directly to the spanish banks]

It is so hilarious when I see journalists, most don't have a clue, write about this. The crux of the problem they were trying to solve is to prevent any new bailout funds from counting against the bailed out coutrny's debt-to-GDP ratio. This "direct" bailout injection to the Spanish bank will, in essence, not be guaranteed by the ECB or the ESM but the sovereign itself. In other words, it will "count" toward the debt-to-GDP because indirectly the sovereigns are guaranteeing the bailout money.

From der speigel:

In particular, Sinn and his allies are concerned about the trend toward the creation of a European banking union and allowing the euro bailout fund, the European Stability Mechanism (ESM), to provide direct aid to struggling European banks instead of channeling that money through governments and attaching strict austerity and reform requirements to it. Such a move, the appeal states, means nothing less than the "collective accountability for the debts of banks in the euro system." Because the sum of that debt is almost three times as high as euro-zone state debt, the draft continues, "it is virtually impossible to make the taxpayers, pensioners and savers in the thus-far stable countries of Europe liable for that debt."

thank you Matt. That sounds like a price decline

bjw: if you don't think that WS downturn affects the high prices in NYC RE then why do you think that the brokers were screaming about their good fortunes to be running with and selling to the WS biggies at the exclusion of nearly every other employment group? And why do we hear nothing from the brokers now about WS purchases. -- they only brag about foreign buyers now. And how long will the foreign buyers support the NYC RE market in the face of a near certain global recession? De leveraging takes a very long time and we are in the midst of it. We have a long way to go. But WS lack of buying is a significant part of it.

"Someone in another industry bidding a much more realistic $1.75 million."

Sorry, this just seems like drivel to me. We're talking about a completely theoretical place and trying to price it? Come on. Of course people buying multi-million $ properties are in the .01% (forget 1%). But entirely silly to think that because fewer bankers will make that kind of money (and some will) that other non-banker rich folk won't still buy here. How quickly people forget that CEOs, actors, media moguls, etc. can be disgustingly wealthy too.

Given the significant headwinds highlighted above for the US economy, the New York economy, and the European economy, why are rents rising so much? Presumable rents in NYC would adjust quickly to changes in the economy given their relatively short contract duration. Media reports suggest rent are rising at an increasing rate.

apt23, did I say somewhere that Wall Street's decline won't affect RE prices? I think a couple people here barely read posts, knee-jerk lump them into a "bear" or "bull" bucket, and then respond. You could save yourself a bit of typing if you read more carefully...

bj, hypothetical situation - 3 bidders, one willing to go to $5m, one to $4m and one to $3m. The one willing to go to $5m will win at $4m, pretty simple. now imagine that $4m bidder goes away. THat same buyer will still buy the place but not at $4m but at $3m.

this is simplified example but in many cases there are a few bidders for a property. take one away and it is not difficult to see that price will be lower.

> Jim, all those iditos [sic] are scrambling to renew their rent for 29% higher....

Yes, just wish I could have been part of the genius of losing 20% on a 5x leveraged investment!

(leaving out the fact that the made up% us over what? historically low rates... remember, the chart out a few months ago showing rents were at 90s levels in real terms)

JButton, again I'm not arguing for bubble prices in any way, but your example is just way too simplistic.

Besides, let's say the property is listed for $5m - chances are the $3m buyer won't even know it exists. And probably true if you flip the numbers as well.

as i indicated that was a very simple example with wide numbers. but put any numbers you want and you will see that there will be an impact.

Also, if property is listed at $5m it will not sell.

"Also, if property is listed at $5m it will not sell."

What? Sorry, are you saying that this won't sell unless it comes down under $5m?
http://streeteasy.com/nyc/sale/691721-condo-15-central-park-west-lincoln-square-new-york

I'm sure I can dig up a few more examples.

that's stupid and i think you know it.

cc, stupider than saying "if property is listed at $5m it will not sell"? Please explain.

whats your point? someone says something stupid and you respond by being stupid?

cc, you're awfully pleasant today, which is great, but I was asking JButton to explain what he said (that's what the question mark does, remember?). But thanks for inserting your unsolicited and truly helpful opinion on the situation. It does much to further my (hell, everyone's!) understanding.

>whats your point? someone says something stupid and you respond by being stupid?

Looks like you are enjoying that game.

Oh look.

King of stupid.

Always here.

Endlessly stupid.

Congratulations

[Wall St has always been the largest part of the economy where employees were paid sums that allowed them to afford high-end real estate and family-rearing in NY. Wall St was where 30's professionals could easily be paid into the 7 figures. The best paying jobs away from Wall Street have always provided service support for Wall St. Wall St will continue to shrink, as will comp for those lucky enough to keep/get jobs there.

To suggest that jobs in law, tech, health, film, advertising, government, non-profit, etc will pay such that employees in these fields will replace Wall St employees as buyers of expensive NY real estate stock is absurd.

There will always be numbers of people who own businesses and make very good money. But income for employment will be lower across the board based on Wall St shrinkage.

All a good thing. RE in NYC is overpriced, and Wall St's portion GDP has grown ludicrously to totally unsustainable levels.

Shrinkage a comin'.

Bullish??]

Agree with everything yikes said, especially the part that other industries can "replace" WS' workers as being absurd.

streeteasier, you joined over 2 years ago but all your posts are in the past 2 months. What happened?

> "WS sneezes and everyone else gets a cold." Seems like an overstatement to me.

Not sure who [law, tech, health, film, advertising, government, non-profit, etc.] are gonna cater or service to ? A lot of law firms' clients are hedge funds, same as tech. Health is a by-product to any cities. Film and broadway depends on spenders, i.e., Manhantanites & tourists, especially B'way. Advertising, very dependent on the general economy. Gov't is like health and non-profit folks most likely can't afford many NYC locales.

Therefore, folks who can afford to live in Manhattans are your WS'ters and lawyers who cater to WS'ters and many folks working in advertising, healthcare and tech that supports the general NYC economy but the moment the top of the food chain sneezes, i.e., the WS'ters, everyone will be affected.

> blow, nobody is saying NYC will collapse. But once you lose a good chunk of your buyers, it is normal that prices will come down. Even if all else stays constant there is nobody to fill the gap. Who do you think will take a place of that now fired WS dude who would have bid 4mm on a place?

Ding ding ding .. prices are set at the "margin" and the margin is that insane buyers w/that over-sized bonus in the "good old days" ...

> Also, people from other industries have and will buy $4m apts. It's just that the $2.5-3m apts won't all go for $4m. That's the real point here.

bjw .. :) .. I will insinuate a little less than JB .. tell me WHICH industry, not a few from the industry but a good large number of workers from that industry working in and around NYC that can afford that $4M apartment besides the WS'ters ? Name an industry! Keep in mind not a few "star performers" from that industry but a good number of the workers ... I'm waiting ...

> but a huge source of buyers of NYRE, who have always played a big part, will be gonzo

ding ding ding ... yeah, real bullish alright .. real bullish for the BEAR case :)

> And why do we hear nothing from the brokers now about WS purchases. -- they only brag about foreign buyers now. And how long will the foreign buyers support the NYC RE market in the face of a near certain global recession? De leveraging takes a very long time and we are in the midst of it. We have a long way to go. But WS lack of buying is a significant part of it.

Bulls .. wake up and smell the ROT :)

you know, ever since midtownereast started posting less frequently, Streeteasy has been less fulfilling.

> Sorry, this just seems like drivel to me. We're talking about a completely theoretical place and trying to price it? Come on. Of course people buying multi-million $ properties are in the .01% (forget 1%). But entirely silly to think that because fewer bankers will make that kind of money (and some will) that other non-banker rich folk won't still buy here. How quickly people forget that CEOs, actors, media moguls, etc. can be disgustingly wealthy too.

The folks you mention won't be buying a pre-war 2BRs on the UWS or UES. They will be buying 15CPW or Columbus Circle or anyone of the "TROPHY" building. You are, like your brethens, now picking on the ultra-wealthy and pointing to them that they will support the ENTIRE NYC RE. Your comment is getting hilarious.

There will always be the 1% buying the TROPHY apartment but HOW IS THAT apartment going to affect the comps of 1 and 2BRs around the city ? Yeah, NOT ONE IOTA. Shhhhhesssshush

> Given the significant headwinds highlighted above for the US economy, the New York economy, and the European economy, why are rents rising so much?

Great question. I believe there is something FISHY going on as this is across the entire COUNTRY ... THINK REITs and this article,

www.nytimes.com/2012/07/06/business/bad-mortgage-loans-burn-investors-and-tenants-high-and-low-finance.html?

I guess it's getting better now that str33teasier has picked up the pace. 60+ posts today alone, out of 117 total since February 2010. Amazing!

bj, in my example of 3 bidders and one apt listed at 5m, that apt would not sell. i did not say no apt at 5m would sell. point is marginal buyer sets the price, not what the richest bidder could afford to pay. Think of it as an auction, prices goes up until second to last bidder drops out and that's where market price is.

JButton

I I understand that you are trying to give a simple example, but that just isn't how supply and demand works. If there is only 1 buyer willing to pay 5M, then it will likely go for less than 5M, but there will likely be more than 1 potential buyer at the 4M level and even more buyers at the 3M level. The lower the price (for the same original apartment) the larger the pool of potential buyers. Your example works if the apartment were selling as a true auction with only 3 potential buyers, but more people can start bidding if and when the price drops.

str33teasier

So the rental market in the entire country is fishy?

The article you posted doesn't really support that claim. The landlord tried to raise rents above what he was legally allowed, and he failed. He tried to raise rents to support the debt payment that he needed to make and he couldn't because the market (the rent controlled market) wouldn't support it.

As per more bidders for lower priced property you are correct, but at the same time there will be more WS guys dropping out who would have bid 3m vs. those who would have bid 5m, so proportinaly impact will be similar.

You guys are nuts. This is way off the topic. I'm talking about rent going up...that's it.

ericho75

Do you think rising rents are a result of an improving underlying economy in NYC? Or a change in buyer mentality, meaning that more people are scared to buy given the recent crash, and therefore there are more renters driving up prices?

or the fact that rents declined and are now attempting to get back to where they started pre 2009?

re: meaning that more people are scared to buy

scared to buy? are you kidding? what does this data tell you?:

http://www.urbandigs.com/

Rents are going up AND apartments are selling. That's facts. Why? I still maintain it's the trillions in past and current bailout money/financial sector life support oozing into the NY economy. There is no recession here (yet?).

> Do you think rising rents are a result of an improving underlying economy in NYC?

Of course it's b/c the economy is doing exceptionally WELL!!!

[ECRI's Achuthan Says U.S. Economy Is in Recession]

http://www.bloomberg.com/video/ecri-s-achuthan-says-u-s-economy-is-in-recession-8B7WivlWSb~6ufDTVKeOoQ.html

Oh, forgot to add the tag :)

The posting s/w automatically took out the "" tag :)

"Agree with everything yikes said, especially the part that other industries can "replace" WS' workers as being absurd."

str33t, you're agreeing with yikes/bottoms' strawman. I haven't ever claimed the bubble will continue, so there's no "replacing." Again, not sure where you're reading that.

"Not sure who [law, tech, health, film, advertising, government, non-profit, etc.] are gonna cater or service to ?"

Those industries existed and thrived well before the bubble. I think that's pretty solid evidence that they don't need to cater to WS to survive. WS is not the center of the universe, much as you apparently would like it to be.

"bj, in my example of 3 bidders and one apt listed at 5m, that apt would not sell. i did not say no apt at 5m would sell. point is marginal buyer sets the price, not what the richest bidder could afford to pay. Think of it as an auction, prices goes up until second to last bidder drops out and that's where market price is."

JButton, sorry but I don't follow your logic. Why does this completely theoretical apt not sell at $5m? Because you said so? I appreciate the auction model, but the fact is, the vast majority of RE transactions don't work that way here.

difference between bulls and bears on this board is what data they concentrate on - bulls are looking at data today (transactions, broker talk, etc) and are hence bullish, bears are looking to more forward data that is less certain of course but much more bearish (debt, economy, WS, etc).

the transaction data from urbandigs to me is bearish long term. we have a spike in transactions and a drop in supply and both are pretty dramatic. This phenomenon is indicative of a bubble and one that is at the tail end of its existance.

West34, I should probably put a disclaimer in bold that I'm in no way bullish on RE here (seems a few people here can't read good), but those UD charts tell a pretty interesting story right now:

* lowest inventory since Feb 2008 (pre-Lehman)
* highest pending sales since Jul 2008 (also pre-Lehman)

Alone, one of these facts probably wouldn't mean all that much, but taken together, that's kind of a scary picture. I suspect it's the bubble death-rattle/dead cat bounce.

[the transaction data from urbandigs to me is bearish long term. we have a spike in transactions and a drop in supply and both are pretty dramatic. This phenomenon is indicative of a bubble and one that is at the tail end of its existance. ]

If anyone who follows the equity market knows, what happens when a stock drops a lot ? There is a "dead cat bounce right ?" Seems like a dead-cat bounce to me w/the spike up, almost parabolic, of the transactions.

yup- nothing goes straight down.. always market entrants that think its the bottom false bottom

Something to note as well if no one else has brought it up yet: yes, transactions are still occurring, but prices are flat. As a general rule, we are not seeing the bidding wars, prices over ask, etc. of days of yore (things that tend to make prices escalate). And this with interest rates at a historic low, which I am sure is bolstering demand right now. I repeat, prices are FLAT. That means that year by year, they are actually decreasing when inflation is taken into account. What's gonna happen to prices AND transactions when rates return to anywhere near a normal level? (Yes, I realize this could take many years.)

Also, other than the rare "superstars" in their fields, there is simply NO way that medicine, law, media, tech, etc. can come close to replicating the huge, obscene salaries that WS paid out in broad swathes for lo these many years. The party is truly over. I am not predicting that NYC real estate or liveability will tank, simply that things will return to a more "normal" level.

My guess is that pricing will stay flat for the next few years at least. And I simply do not envision a scenario where prices will go up to any significant degree for a long time after that, with potential for a marked shift downward due to rates, Euro problems, and all of the other issues already mentioned.

blathering slurper? or slurping blatherer?

why engage?

Great. Several more years of reading this crap.

nyc has about 500k to 600k people with $1million+ in investable assets. there are also about 250,000 americans earning over one million dollars per year, not to mention all of the foreign wealth.

clearly the media has blinded people into thinking that most of the wealth is in wall street. it is true that there are no other industries where employees can make this type of income. but to assume that the largest number of individuals buying real estate is from wall street employees is misguided. the MAJORITY of people earning over $1 million per year are not employees but owners.

in fact, there is only a small percentage of employees in wall street earning $1 million + consistently for over 10 yrs. the vast majority of these live in westchester or nassau county.

so these are your thoughts? where's the data?

"it is true that there are no other industries where employees can make this type of income."

Not true at all.

Screenwriters routinely make 8 figures.

Television entertainment writers *consistently* make seven figures.

Television and film producers *consistently* make into the HIGH 8 figures, and often into NINE figures.

how many of them Matt? 3 or 4?

I think only about 12-15K people filed taxes of more than 1M in income in NYC in 2009.

what is the % the populaiton that make that income in NYC MAtt?

Brooks2, I can't vouch for nyc1234's numbers, but how is that not data? I think you mean sources.

"I think only about 12-15K people filed taxes of more than 1M in income in NYC in 2009."

If there's one thing I know, it's that rich people are really good at reporting as little income as possible on their taxes.

And that is income for just 1 year. A pretty crappy one no less.

They are but that is usually due to earning money outside of a "job" and we are talking about diminishing high paying jobs.

Re: Television and film producers *consistently* make into the HIGH 8 figures, and often into NINE figures.

yeah, and some baseball players too! And Brad Pitt! So there!

but what happens to RE when they start cutting ticket prices? is there a correlation?
http://www.bloomberg.com/news/2012-06-21/new-york-jets-cut-ticket-prices-on-12-000-upper-level-seats.html

"how many of them Matt? 3 or 4?"

About 7500.

# of indiv in america earning more than $1mill per yr:

http://www.joshuakennon.com/how-many-people-earn-more-than-1000000-per-year-in-the-united-states/

# of indiv in ny with $1mill investable assets:

http://blogs.wsj.com/wealth/2010/08/03/new-york-has-the-most-millionaires/

number of wall streeters earning over $1 million per year (estimate) at 17,000:

http://insight.kellogg.northwestern.edu/index.php/m/article/todays_rising_one-percenters/

needless to say most of these are over 30 (i don't have proof of this). i also don't know how to prove that the majority live in westchester and nassau county. i will admit that is anecdotal and could be incorrect. that being said, i have a large extended family and a fairly sizable number of those family members are wall streeters, 2 of which are MDs at "top" level banks. from what they describe it is very rare for their higher level colleagues to own primary residence in the city and the pied a tiers a lot of them own are in the sub $2mill range

What about NJ or CT?
A lot more out there than your extended family.

nyc1234, we are looking at the general population of WS'ters .. not the MD levels. Folks at those levels have multiple residences. They are the 1% .. not the DIDK or double income double kids trying to find an affordable 3BRs in the city.

"They are but that is usually due to earning money outside of a "job" and we are talking about diminishing high paying jobs."

True, but for the purposes of buying RE, money is money.

*Disclaimer: I am in no way suggesting that Wall Street bubble money will ever be replaced, nor do I believe that real estate values will appreciate in the next few years. This message brought to you by Center for Kids Who Can't Read Good and Want to Do Other Things Good Too.

agreed but as u see wall streeters above $1 million per year are at 17,000 or so.

btw i don't have any particular "unchangeable view point" about all of this. i will admit it is a combination of data that i showed above, as well as anectodal evidence as well as knowing several people in the $1million+ income category which in my particular case appears to be skewed towards entrepreneurs (although that may be because that is what i am as well). it is possible that the media is correct and that the vast majority of high income is in wall street alone but i haven't seen any proof of this theory either and it seems to be de facto.

since i am theorizing here i would also say that from my personal experience, the wall streeters tend to spend a significantly higher amount of their income on everything and much less on saving. this may be because in the past there was more stability there as opposed to business where things can get a little rough so people tend to buy things that are smaller in respect to their income. therefore, a hit to wall street may hit real estate asymmetrically worse as well.

regardless of all of this nonsensical drivel, i will def agree that any hit to wall street will hurt the ny economy. i just don't believe that it is the complete story and i think it misses out on alot of other groups (none of which by themselves are in the same league as wall street but when summed together make a large group).

'the wall streeters tend to spend a significantly higher amount of their income on everything and much less on saving"

yea.. i guess they're not buying apartments or Jets tickets...

"True, but for the purposes of buying RE, money is money."

But that "money" isn't necessarily going away as Wall Street shrinks. I agree with nyc1234. The hit to Wall Street will hurt NY economy but there is much more to it.

@brooks2

they are def buying apartments (or maybe i should say were). as i said, i think they are much more likely to overspend in every category at the loss of their savings...of course i can't tell exactly what u mean by ur comment because outside of gawker i am not used to people sarcastically agreeing (perhaps this must be something new learned at the nick denton school of journalism)

Also, other than the rare "superstars" in their fields, there is simply NO way that medicine, law, media, tech, etc. can come close to replicating the huge, obscene salaries that WS paid out in broad swathes for lo these many years. The party is truly over. I am not predicting that NYC real estate or liveability will tank, simply that things will return to a more "normal" level.

says it well...and the citation of all the great "diverse" industries in ny like fashion, advertising event planning as doing wonderfully, misses the clear point that incomes in those industries pale compared to what WS has been paying large numbers of employees over the past decade or two...and in fact many of those employees live in NYC...b/c they can (used to be able to) afford it...well there will be far fewer of them and they will be less well-paid...so yeah there will still be accomplished fashion illustrators and copy writers making 90k/year in their 30's, but there will be far fewer 30's bankers making 7 figures

flaaaaaat....get used to thaaaaaat....at best

maybe some bumps.. bumps are/is better than flat

I THink the name of this thread should be changed to "Keep Buying? Ouch!"

> flaaaaaat....get used to thaaaaaat....at best

Yeah, at "best"

> "Keep Buying? Ouch!"

Yeah, right ?

I will pose the question again in a slightly different way...

Given the head winds in the New York economy (many cited above), what is causing the recent rise in rents? Improving fundamentals or just more renters because more people thing buying sucks? Or is this just a catch up? Even so, something is causing the catch up...no? If the economy is continuing to slide with an even worsening Wall Street jobs market with those jobs being replaced by lower paying jobs in other industries, shouldn't rents be falling instead of rising?

> Given the head winds in the New York economy (many cited above), what is causing the recent rise in rents? Improving fundamentals or just more renters because more people thing buying sucks? Or is this just a catch up? Even so, something is causing the catch up...no? If the economy is continuing to slide with an even worsening Wall Street jobs market with those jobs being replaced by lower paying jobs in other industries, shouldn't rents be falling instead of rising?

It's an excellent question ... might just be catch up as I suspect

""how many of them Matt? 3 or 4?"

About 7500."

Wrong. So wrong. The writers guild says there are about that many who DON'T NEED SECOND JOBS. Who make enough from writing to do nothing else. And this is TV and film combined. They do NOT say 7500 make over $1MM.

"It's an excellent question ... might just be catch up as I suspect"

Yes, which is what UES said. The more interesting question is why. I don't understand the steep rise in Williamsburg rents in the past ~2 years. There's been tons of new supply, and it's all gone relatively quickly. Yes, the neighborhood's more desirable, but the supply factor alone should have outweighed that.

"Those industries existed and thrived well before the bubble. I think that's pretty solid evidence that they don't need to cater to WS to survive."

No, it isn't... unless they weren't catering to WS before the bubble... we really saying that about law and government?

"About 7500"

7500 screenwriters making 8 figures. This is getting funny.

Here are the stats Matt got wrong:

http://www-deadline-com.vimg.net/wp-content/uploads/2012/07/2012-WGAW-Annual-Report__120702174344.pdf

A TOTAL of 4300 WGA writers reported earnings, of an average of $223,420 per year. Which makes it impossible that 7500 made over $1MM each.

"No, it isn't... unless they weren't catering to WS before the bubble... we really saying that about law and government?"

Sorry, let me rephrase. They don't need to cater to a bubbled-up WS to survive. "Normal" levels will do.

bjw,

Please sort of define your ["Normal" levels will do.]

Are you saying if WS goes sky diving, that the rest of NYC will hump along in their "normal" level ? Whatever you're smoking my friend, it's potent! I suggest you lay off of it occasionally to think clearly ?

>I suggest you lay off of it occasionally to think clearly ?

You are a doctor?

str33teasier, not sure what you would have me say. Again, you seem to think I'm saying a whole lot of things I'm not. I don't think bubble RE pricing is in any way sustainable; I don't think bubble WS incomes are going to be "replaced" by anything. I just don't think WS is the center of the universe. Guessing your view on that is pretty intractable at this point, so maybe just agree to disagree, at least for the sake of keeping this thread interesting?

PS - smoking potent substances gets a bad rap.

>PS - smoking potent substances gets a bad rap.

suddenly you are cool?

bjw, agree to disagree ...

Manhattan Apartment Rents Rise Most Since 2007 as Demand Surges
2012-07-12 04:01:01.6 GMT

By Oshrat Carmiel and Noah Rayman
July 12 (Bloomberg) -- Manhattan apartment rents rose the most in five years in the second quarter as would-be homeowners struggling to get mortgages lingered in the leasing market, competing for space with transplants and new college graduates.
The median rent rose 7.9 percent to $3,125 a month from
$2,896 a year earlier, according to a report today by appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. It was the biggest annual increase since the second quarter of 2007, when rents jumped 11 percent. The median is now
4.3 percent below the peak of $3,265 in 2006, and poised to surpass it, said Jonathan Miller, president of Miller Samuel.
Stricter mortgage-lending standards and weak consumer confidence are limiting home purchases, increasing competition for rentals in the busiest period for leasing. Sales of Manhattan co-ops and condominiums totaled 2,647 in the second quarter, little changed from a year earlier, Miller Samuel and Prudential said on July 3.
“The consumer is being squeezed because many don’t have the option of getting out of the rental market,” Miller said.
“People who can’t qualify for a mortgage have no choice so they’re stuck. That tips the balance and creates this rising demand.”
Newly signed rental deals fell 11 percent in the quarter to
7,657 as more people stayed in their apartments. The Miller Samuel and Prudential study doesn’t account for leases that were renewed.

Biggest Increases

“There’s nothing in play at the moment that suggests that we’re going to see rents decline over the next year,” Miller said.
The smallest apartments had the largest rent increases in the quarter as tenant demand for cheaper options surged. The median monthly price of a studio jumped 15 percent from a year earlier to $2,395, while one-bedroom units climbed 8.5 percent to $3,250. Two-bedroom rents rose 5 percent to $4,298, while three-bedroom prices were unchanged at $5,295.
Christopher DeSantos had to increase his budget and change his neighborhood of choice to land an apartment. DeSantos, a law student at Fordham University, and his friend Dean Sacco, who’s studying dentistry at New York University, sought a two-bedroom rental in Greenwich Village for no more than $2,400 a month.
They increased the limit to $3,000 after seeing the “shoeboxes” available at the lower price, said DeSantos, 23.

‘Personal Space’

“We’re good friends, but it’s still important to have enough personal space when you come back to the apartment,” he said.
After another apartment-seeker beat them to a fourth-floor walk-up in the East Village, the friends took their search farther uptown, to East 26th Street near Gramercy Park. They expect to sign a lease today to rent a third-floor unit in a building with no elevator for $2,800 a month.
“That’s the blood, sweat and tears of the game,” said Corlie Ohl, a broker with Citi Habitats who helped DeSantos and Sacco in their search. “If you like an apartment at all, you have to move quickly, because if you don’t, you’re not going to get it.”
The jump in demand meant landlords were able to push price increases while limiting tenant concessions. Six percent of new lease agreements in June included deal sweeteners such as a month’s free rent or payment of a broker fee, according to Citi Habitats, which also released a report on the Manhattan rental market today. A year earlier, 11 percent of new deals entailed such incentives.

Vacancies Decline

Citi Habitats said rents averaged $3,437 for the quarter, a
5.2 percent increase from a year earlier, topping the previous record of $3,394 set in May 2007. The vacancy rate was 0.97 percent, compared with 0.72 percent in the second quarter of 2011.
“The most important thing is to come prepared if you want to rent in this market,” said Gary Malin, president of the New York-based brokerage. “Without all the necessary paperwork and all the necessary funds to secure an apartment on the spot, you’re putting yourself at a severe disadvantage.”
When Graham Marvin spotted a $1,895-a-month, two-bedroom walk-up on the Upper East Side, he applied immediately, armed with paperwork showing that his parents would act as guarantors.
Marvin, 22, a recent graduate of NYU’s film school who works for a company creating a show for the History Channel, still didn’t get the place.
The rejection led him farther east -- away from the subway, restaurants and bars -- to an “awkwardly shaped” unit on 82nd Street near York Avenue that he and a friend agreed to rent for $1,900. The second-floor apartment in a building without an elevator requires a walk through one of the bedrooms to get to the kitchen.
“It’s nice,” Marvin said. “It’s not quite as nice” as the first apartment.
Across Manhattan, rents at buildings with doormen started at an average of $2,585 a month for studios and were as high as
$7,095 for three-bedroom units, Citi Habitats said. Studios in buildings without elevators rented at an average of $1,973, while one-bedrooms in those properties leased for an average of $2,575.

240 square feet studio in Brooklyn Heights for $1,500.

http://shine.yahoo.com/decorating/couple-lives-240-square-foot-apartment-213500626.html

As smart as they want to make themselves look, why not rent a real one bedroom in Astoria, Forest Hills, Rego Park, etc.? Seriously...

OR How bout buying a place and use that 1,500 to build equity and get a sweet tax deduction.

Rental prices in Long Island City (hunter's point) by Gantry park.

1 bedroom - $2,800 to $3,400
2 bedroom - $3,700 to $4,300
3 bedroom - $4,400 to $5,800

http://www.eastcoastlic.com/long-island-city/apartment-rentals/rentals/listings
http://www.avaloncommunities.com/new-york/long-island-city-apartments/avalon-riverview-north/