Manhattan Rents Down

i see softness in rental market this year. My one year lease only went up 4% (YOY) as supposed to 9% last year.

Actually, kiss, they're down even for 1-bedrooms. I follow relatedrentals.com religiously, used to live in the Westminster, moved out paying $3600 per month, within a year it went to $4,600+ per month, was recently down to $4,095 per month.

Crash.

I've been subletting since I sold my coop last fall. The sublet is nearly up and I haven't found something great enough to buy yet, so I'm parking my truckload of money from the sale (okay--maybe a small SUV-full of money) and looking to rent for another year while I continue to look for a place that is great and has a price I can live with. So I've had to learn all about the rental market for the first time in my life. And I thought brokers were awful in coop/condo sales! Rentals are even worse. And finding good ones is HARD. Most are completely disgusting; I found Craigslist useless for grownups; anything without an address is a scam; brokers' fees of 20% make the actual price of a 1-2 year rental much higher than the posted per/month price. That said, EVERY single quality rental I've looked at around lower Fifth Ave. was reduced prior to going into contract (is that what it's called?) or has just been reduced. And these are the good properties! The trend is much clearer to me than sales trends have been. Rentals are not getting their original asking prices and reductions are currently very, very common.

where can I find the rat infested 3 br closet for 4665?

I saw on www.curbed.com that rents were reportedly down across all types of apts except 1-bdrms. I know these are averages, but in the GV area every 1-bedrm I saw for rent in the last month that was between $3500 and $5000 was reduced.

ccdevi - you are becoming like spunky ...
(if you haven't realized - i meant that as an insult)

hey! if rents keep going down then the 2600/1M might not be too far off - huh? :-)

kylewest, try nybits.com. The best source for market-rate rental buildings. There's a gazillion apartments out there.

kyle west, how did you find your place? I am so sick of brokers and finding scams on Craigslist but i have not clue how to find a decent place without paying a huge brokers fee/... any suggestions on a good place to rent from if i want to live in the East Village and/or Union Square issue?

I have been a renter for the last 16 years (did not want to buy small and couldn't afford bigger at that time). I always managed to find great deals for rentals but it was always through brokers! Yes, they were expensive, but 12% (the rate in '91) and 17% (rate in '99) were well worth it considering that I found places that would suit until my life changed, in other words, until I got married. Over the longer term of 3-5+ years a better place/deal was worth the price.

Most decent or larger landlords will use a broker, and probably a better rental broker, because they will act as the first filter. If they pick the wrong tenant they are completely screwed because it will take months to get someone out and a bad renter/squatter can do a LOT of damage in the time they are there. A good tenant is a steady stream of income. Think of the broker as the sign of a reputable landlord.

That said it is harder to justify if your time horizon is shorter, but just factor it in and realize that if you do believe the market is changing that you will save much more than the broker fee in price changes on your next apartment.

I repeat - nybits.com are no-fee rental buildings that are professionally run.

Does anyone know any good websites where people are looking for roomates in Manhattan? Thanks

What's average rent for a 2x2?

Do people ask for more than a one month security deposit?

My experience recently renting: newbie08 you are right--Craigslist is full of scams and creeps that makes it not worth it for me to waste time with--I just don't have to patience to sift through all the b.s. And the rental brokers are as bad as the sales brokers. I did check out www.nybits.com but was disappointed with Village listings in prewar doorman buildings. I'm in this for the short-term (I hope) of 1-2 years so the broker fees of 2-months rent (they call it 15% of 1 year's rent) was a large expense I wanted to avoid. In the end, I just started going up to doormen in the buildings in the area I was looking and asking if it was a rental building, if any apartments were available and what the managing agent's contact info was. Many actually don't publish their available apartments with any consistency. That proved fruitful (maybe I was just lucky).

Working with a broker: here's something to explore if you are using a broker in your search to buy. I have a good relationship with mine. Sold my coop with my agent and am looking for new place with my agent. In seeking an interim rental and my dismay with the cost of broker rental fees, my agent offered to credit me their portion of the commission on any fee-rental I leased while I looked to buy. It was a wise business move, granted, but also a nice thing to do.

Options for rentals in the village are very poor...most are shabby old walkups, and most of the newer rental-only buildings have been constructed in order to cram people into them - no one would look to buy units with those layouts. they also tend to be on busier streets - avenues, houston or 14th. I've seen the nybits, most of them are terrible. if you go that route, be ready for shoddy fixtures and rattling pipes.

The last 2 apartments I have lived in I found just like kyle - pick an area you like, and just walk up to doormen buildings and see what's available. it's best to start this a few months before you need to move. But same situation though - most of the options in the village are not great

Your best bet is to try to find a condo listing to rent, although as you have said, you will pay a broker fee, probably 15%

By the way - this is one of the reasons I chose to buy instead of rent, despite dire predictions from steve and the like

"this is one of the reasons I chose to buy instead of rent, despite dire predictions from steve and the like..."

What was? Paying a broker fee? You can get them down to 10% if you need to use one.

I think you must have bought before my dire predictions, b/c I haven't been posting on this site for more than a couple of months.

There are fewer rental buildings in the West Village because it has an older housing stock.

What you state about nybits being shoddy is completely untrue. Rockrose, Related, Macklowe, Archstone, they all advertise there, and they're some might fine buildings. If you want Richard Meier, you're not going to get that there.

rents are off 10%. walk-ups are sitting on the market and you can get good deals in newer rental buildings. lean days ahead. brokers are the next to go through a fierce round of cuts (most likely will be quiet since most are just all commission). but the point is, no one is talking about how great the market is - they are all telling you it's not that bad and the V-curve will form very soon. the great long unwind is underway.

AvUWS - On Craigslist, look only for ONLY "by owner" and ONLY with pictures. My sister found a very good place on UWS when she used this technique. The owners did charge the 1st+last months and security, but I believe that's standard.

I beleive vacancy rate is still below 1.5% so I don't expect a tremendous decrease if at all for 2008. Rents have skyrocketed from 2005-2008 so wouldn't be surprised if they flatten out for 2008. We shall see. So far looks like a slight decrease for 1st quarter but rental season doesn't begin till May so we won't know for sure.

spunky - job growth, the classic impetus for the run into summer is gone. layoffs are driving this market down. wall street is great when it's on your side but when it pulls back, it's a wall of water going donwhill. it took a while to overheat and it will take a while to regress to the mean, but it will get there. it will be interesting to see what happens with the ultra high end. the party at the Plaza the other night reminded me of the Gilded Era - one of the best arguments I've seen in a while for a consumption tax. the fact that folks keep spending just because they can, speaks volumes as to why this country has problems.

No, I didn't buy because I would have had to pay a broker fee, I am saying that one of the reasons that I bought was because the rental options in the village are not very good (this is a point I have made on many threads steve)

And if you want nice amenities (e.g., terrace, DW, W/D) on a nice (non-Houston/14th/avenue) block, your choices are even more limited. This is why buying isn't just a matter of price appreciation - it's quality of life

As far as the broker fee, it's kind of like closing costs on buying in a new dev...sure, you can negotiate - but only on undesirable properties. if you have a great rental that isn't absurdly priced in the village, no way will you be able to negotiate the broker fee down

gringo got to diagree with you although we all know of the layoffs on wall street the job market is still very strong.About 4 plus unemployment is historically low. Job growth will probably slow down till 4th quarter I feel by 2009 job growth will pick up again and I would not be be surprised if in 2009 we see unemployment in 3% range.

evillager, you can always negotiate the fee - I did on a great building in Chelsea.

You are right about the Village - no question about it. That's why I'm in Chelsea for now: much better rental selection b/c the stock is newer.

Spunky the problem with your analysis is that it looks at the country's unemployment rate, not NYC. The fact is that in NYC, Wall Street makes up 11% of the jobs but 33% of income. That's why it's a serious problem.

Unemployment has never been "in the 3% range." If it falls below 4.5% (50% more than your quoted rate) wages start rising causing inflation, and the government steps in by increasing interest rates to slow the economy down.

I said about 4%. In 2008. 4.5% still very low in the historical sense. Not sure 3% unemployment range would wreak economic havoc but I'm not surprised you would also put a negative spin on that as well

This is just too funny

Steve, this is precisely why new buildings in the village will better be able to hold their value / appreciate. Less new housing stock there, and for many (like me), Chelsea or Gramercy are just not an attractive alternative neighborhood

I stand by my statement - if you are lucky enough to find a great rental in the village, try to negotiate the fee down. Then let me know if you do get the apartment. Who knows? Maybe you will, and if you do good for you...but my guess is that you will lose the apt to someone else. (For the record, I have never paid a broker fee myself, although I have looked at nice apts in nolita and the far west village where the person wouldn't budge. they rented within days)

spunky, it's not a "negative spin" on unemployment. It's called the "natural rate of unemployment":

http://en.wikipedia.org/wiki/Natural_rate_of_unemployment

How little you seem to know.

evillager, for as many people as want to live in the Village, there are people who are happy - or would even prefer - to live elsewhere. The Village is more expensive now than it has been in the past relative to other neighborhoods in the city. If it remains a desirable place, then it will retain that relative ratio, but if all prices go down, its prices will go down, as well.

I don't think I ever argued that real estate wasn't about location, location, location. What I argued was that if there are no incomes and no leverage to support price levels, they will fall. And they will fall everywhere.

You have the wrong attitude about bargaining fees. If you make it absolutely obvious that you want one and only one apartment, then your chances are slim. If you make it plain, however, that you're willing to walk, or switch agents, they'll bargain, because they know that 12%, although not as good as 15%, is a lot better than 0%.

Yeah - i notices the faulty analysis spunky did too. If you want to understand I micro-region, you need to speak about the stats of the micro-region. In the same way that we believe NY real estate is different from the whole country's, you need to provide or analyze statistics that are specific to the NY economy or job market. The unemployment rate for the US and change are not the same as the unemployment rate/change for New York City. A starting point is acknowledging that 1/3 of the income here is derived from wall street. Then when you learn that the large layoffs are coming from this sector, you can deduce what that might mean for this micro-region. Let's keep US employment stats out of the equation as it won't help you with the specific analysis.

Brokers, like most people, try to maximize their profits. If they have multiple people trying to get an apartment, why would they drop their fee for anyone? Again, I am talking for a NICE apartment - elevator, DM, terrace. I looked at one on Charles and one on Elizabeth in Nolita, both in the $4-5K range. I ended up not trying for the apt on Charles, but it was in contract in days, and someone else beat me to the punch on the Elizabeth St one. So mind you, my comments are not theoretical, I know all about negotiating.

I know you think very highly of yourself steve, and you are very proud that you negotiated down to 10 or 12% or whatever, but my position stands. The village is desirable for exactly the same reason that it is expensive - most buildings are old and protected, little building is allowed. That gives it the old-NY feel and charm that people like. You may not distinguish between there and Chelsea, just like many people think a Toyota is as good or better than a BMW. But most people, after living in NY for over a year, can notice a difference in these places, and realize that the price differential reflects the desirability.

"And they will fall everywhere."

Steve - do you think that buyers in 211 Elizabeth and Superior Ink will re-sell at a loss? (it's a yes or no question)

I can see your point for West Village and proper Greenwich Village, but your login is evillager and I don't put the East Village into this category. Are you including that too?

girlygirl77 - parts of the EV, yes - espeically near the LES, which is booming (and is much like Meatpacking 8-10 years ago). But yes, I prefer the East Village because 1) I just like it and 2) I think it has far greater potential for appreciation.

like most places, it's block to block - just like the West Village still is. See comments on downtown open houses thread re: far west Christopher St

The West Village and Greenwich Village price differently from Greenwich Village, sorry. They are also more exclusive and desired, including soho in that equation. I do not equate them with the East Village or LES which are emerging.

typo - i meant West Village and Greenwich Village price differently from E. Village/LES.

also, the same fundamentals apply in east village - hard to build anything new, so limited supply

look at what is happening on bowery whole foods, bowery hotel etc - change is happening, and it is funneling east

I agreed with me until you compared west village to east village. That's just not true. You are comparing developed and emerging neighborhoods. I'm sure your EV investment can/will appreciate, but it is not the same. The rents in these two areas are also quite different which gives strong credence to my point.

no kidding, of course they are priced differently...for now. just like far west village and meatpacking used to be cheap vs. central village.

but regardless of neighborhood, my point stands that for desirable apartments (that are priced appropriately), you will not be able to negotiate your fee

We are talking about now unfortunately.

since you are so hung up on the east/west point, let me reiterate:

regardless of neighborhood, my point stands that for desirable apartments (that are priced appropriately), you will not be able to negotiate your broker fee

also, you might want to check into what rents are in avalon bowery, and compare that with the west village...at or higher than most. you know why? it's a new building, and there aren't many new rentals in the village (east or west)

The new buildings in chelsea are also skyrocket high. Anyway - you are biased (and with financial incentives for it), so I won't continue with the obvious differences between East/West Village (au courant).

buyers in 211 Elizabeth and Superior Ink will re-sell at a loss?

I don't know either building, I have no idea. I know the Japanese bought Rockefeller Center and sold it at a loss. Perhaps those apartments cost as much today as Rockefeller Center did in the 80's.

I negotiated a discount on a very nice apartment. If you believe you won't get a discount, you certainly won't.

The East Village is NOTHING like the West Village. I used to live at Bleecker & Charles Street: it's nice there.

You say, "most buildings are old and protected, little building is allowed."

Read this from the New York Times in 1988:

"Real estate specialists are confident that residential construction in Manhattan, prodded by a strong underlying demand, will eventually regain its momentum. In the short run, however, they say a scarcity of sites, rising land and construction costs and more restrictive zoning rules will make apartment production too expensive even for the affluent people developers have been building for, almost exclusively, in the last few years."

Yup. That's just what happened, all right.

True that most of the Village is landmarked, but most of its buildings are not. Under landmark rules it is perfectly legitimate to tear down an entire building; you just can't alter an existing one.

And only the streets with brown signs are landmarked. That includes very little of the E Village.

Global venture capitalist Parag Saxena paid $13.8 million for unit 29C at 15 Central Park West, twice what the seller paid for the apartment, according to city records posted today. Saxena, co-founder and CEO at Vedanta Capital, bought the unit on March 19 from an unidentified buyer, who paid only $6.9 million for it on Dec. 13. Other wealthy financiers in the building include former Citigroup CEO Sandy Weill and Goldman Sachs CEO Lloyd Blankfein. Saxena, a former CEO and fund manger with Invesco Private Capital, formed Vedanta Capital in 2006 with two partners. He ranked No. 31 in Forbes' 2008 Midas List of high-tech dealmakers. By Adam Pincus

Spunky - nice posting - but using random articles without explaining their relevance is not really educational. What's your point? Yes SOME people are still spending money eggregiously, but what is the aggregate market up to? I think that's what people are trying to understand your your random paragraph doesn't help address that. Your credibility has been shot for a while and you are not helping matters.

spunky, that is so stupid. 15 CPW is not your typical Manhattan apartment, but IS, however, the entire reason why Miller Samuel reported that property prices went up in in 1Q2008.

It must be that your theory is that property prices will double every 3 months, right?

that is soooo dumb.

I just thought I throw that in there for good house keeping

let me do it again it's fun

Global venture capitalist Parag Saxena paid $13.8 million for unit 29C at 15 Central Park West, twice what the seller paid for the apartment, according to city records posted today. Saxena, co-founder and CEO at Vedanta Capital, bought the unit on March 19 from an unidentified buyer, who paid only $6.9 million for it on Dec. 13. Other wealthy financiers in the building include former Citigroup CEO Sandy Weill and Goldman Sachs CEO Lloyd Blankfein. Saxena, a former CEO and fund manger with Invesco Private Capital, formed Vedanta Capital in 2006 with two partners. He ranked No. 31 in Forbes' 2008 Midas List of high-tech dealmakers. By Adam Pincus

I have yet to see an intelligent post from Spunky -- but then again, I usually skip them ;-)

spunky sounds like the guy who watches CNBC and believes everything they say on it.. Who cares about millionaires buying expensive apts on 15 Central Park W.

mahattanguy did you say your rent went up 4% this year compared to last year

You have an issue with details: He said his rent went up 9% last year and 4% this year. That is his full statement. That means his rental increase was not as great this year.

oh so he had a rental increase this year 2008 as opposed to a decrease--mmmmmmmmmmmmmm interesting

wait a minute I'm on the wrong thread this was suppose to be rent decreasing thread

You people are good... you've somehow sucked me into defending Spunky.

Someone asked if buyers at Superior Ink will sell at a loss. Spunky then mentioned today's news that a buyer doubled their money at 15 CPW. It's not exactly a non-sequitur.

Amazing location, Robert AM Stern architects, etc. -- the developers have made a big push to hype Superior as downtown's version of 15 CPW. And I'll go out on a limb and say buyers there won't lose money. I have no clue about 211 Elizabeth.

Go direct to the Management company in new buildings. Usually, there is no broker fee.

Don't use a broker who deals primarily with rentals.

Brokers who deal primarily with sales dont want to spend too much time on rentals.
So if you have the right credit and other attributes and would be approved easily by the board, it is relatively easy to get a lower brokerage fee. I did. I'm also more likely to use that broker to help me find a place to buy, another reason for him to have left me with a good feeling.

and would be approved easily by the board

who would sublet a co-op? I own one and the board's a bunch of snooty bastards who should all be shoved out on their arses. They think they're gods - and thank god we have condos now in NYC! It's yours, not theirs!

Rent in a rental building.

A coop may make sense for some people. I needed a place to park myself for 6 months and a coop sublet was perfect. I had just sold and hoped to find something to buy within 6 months. I like to follow the rules and didn't want to be in a position where I bought something and then had to break a year-long lease on my rental. Because owners are often in a bind if their coop sits empty, and because the market for people who are willing to take a rental that cannot be extended beyond 1-2 years is limited, there is often room to negotiate the price and any fee. Onwers are anxious to get the deal done. Renters really have the owners over a barrel when the owner is moved out and the place is empty. Even better if the place was already sublet for a year, and the owner has only 1 year of board permission left for the rental to continue. Here, the owner is paying carrying costs while living elsewhere and every second that goes by they are in the hole. If you only need a short rental, these situations can be ideal. I was able to negotiate 33% off the asking price, got the owner to pay the application/board package fee, and the broker I used to sell my old place and help me find a new one to buy waived the agent's portion of the fee completely. Even better deal: see if your broker has a coop rental listing and get him/her to completely waive the fee since you are giving him/her other business. In the end I got a steal in a prewar doorman white glove building with awesome view in top notch 'hood while I figured out a game plan for buying.

That's why someone would rent in a coop. It's an example of individual needs defying easy answers like "rent in a rental building." That said, if you know you want at least a year+ rental and the right to renew the lease is important to you, I agree with Steve that a coop makes little sense.

stevejhx will you go on the record and state that rents in Manhattan will drop for the Month of April and will continue to drop throughout 2008?

I guess Stevejhx doesn't want to go on record, well why am I not surprised.

I don't know what they'll do in April, but I do predict they will fall from January 1 through December 31 of this year.

Happy?

Now are you going to go on record saying property prices will rise this year?

So what your saying is that they may go up in April, they may go up in May, June ,July , August, September then go down in Oct to December but in either case you will be right. Is that the definitive answer you want to give here. Why don't you qualify your answer or at least be specific so I can get an understanding of exactly where you stand.

"I don't know what they'll do in April"stevjhx

So you think that Manhattan rents may actually go up this month. Very interesting.

I think they will be up in April as well Stevejhx

No, Spunky, I don't think rents will go up in April, but it's foolish to make a short-term prediction because it depends on what comes to market. You need to take the comparison over a longer period of time.

So you're predicting that property prices will rise this year? INTERESTING!

I'll hold you to that.

No stevejhx I don't think prices will fall in 2008 but then again it would be foolish to make short-term prediction it depends on what comes to market. You need to take a comparison over longer period of time.

I said all of 2008, spunky. You asked me rents for April, I said I can't answer for one month, only a longer period of 1 year, which I did: DOWN.

So you're saying that property prices will not fall at all in 2008? I'll hold you to that.

BTW I like the way we both answered each others questions. With forecast like this how can we both be wrong.

What I am saying Stevejhx it would be foolish for me to make short-term prediction it depends on what comes to market. You need to take a comparison over longer period of time.

No, Spunky, I don't think rents will go up in April--SteveJHX

So you think rents will fall in April Okay Stevejhx I'll hold you to that.

No, spunky, you twist my words (so I don't know why I bother). I do not think that rents will go up in April, but I will not make a prediction on short-term fluctuations.

I do think that rents will go down for the entire year, and I will make that prediction.

What is your prediction for median property prices for Manhattan, for all of 2008? UP or DOWN?

stevejhx, spunky brewster's one and only talent is to take words out of context to try and discredit people.

he's pretty good at it. he tried to take me out of context about putting $ into a downpayment for a house or into Gold last December.

even now, when it's obviously clear with Gold at $950 today compared to the $790 it was at just 4 months ago, he will still try and take me out of context to somehow make it seem that putting money into a downpayment last december was a better choice than putting it into Gold.

but he makes up for it with his entertaining "rent is due" now speak and "i own so i am better than you" or "i own in West Village so Ta Ta" comments. those I still get a chuckle when I read. =D

Is spunky a dude? Just curious cuz I thought I read some posts a while ago referring to spunky as "she". Not that it matters. Maybe I just confused myself :)

Is spunky a dude? Just curious cuz I thought I read some posts a while ago referring to spunky as "she". Not that it matters. Maybe I just confused myself :)

Is spunky a dude? Just curious cuz I thought I read some posts a while ago referring to spunky as "she". Not that it matters. Maybe I just confused myself :)

spunky is a teenaged girl looking to bait a sugar daddy Manhattan RE investor, and gets catty with anyone trying to foil her plan by voicing doubts about the market. But that's not what's important here.

Just saw this listing come up, and it reminded me of this thread. My, my, my. It never seems like the impossible can happen until it does. As we hear some of the new bulls come up with new arguments about what is "impossible", just remember the track record of the "impossible".

--

Evillager - 18 months ago:

"And they will fall everywhere."

Steve - do you think that buyers in 211 Elizabeth and Superior Ink will re-sell at a loss? (it's a yes or no question)

--
Yorick (no idea who that is) -- 18 months ago

You people are good... you've somehow sucked me into defending Spunky.

Someone asked if buyers at Superior Ink will sell at a loss. Spunky then mentioned today's news that a buyer doubled their money at 15 CPW. It's not exactly a non-sequitur.

Amazing location, Robert AM Stern architects, etc. -- the developers have made a big push to hype Superior as downtown's version of 15 CPW. And I'll go out on a limb and say buyers there won't lose money. I have no clue about 211 Elizabeth.

--
18 months later, the market says: "yes"

http://www.streeteasy.com/nyc/sale/470582-condo-400-west-12th-street-west-village-new-york

Already asking a loss with transaction costs. Purchase for 4.25, list for 4.5. What will it close for?

"It never seems like the impossible can happen until it does. As we hear some of the new bulls come up with new arguments about what is "impossible", just remember the track record of the "impossible"."

Well, but then it happens, and the bulls argue they never said it, it was "taken out of context"...

Yes, if the context was "we didn't know what we were talking about".

Continued declines in Manhattan apartment rentals may remove potential buyers who feel they are safer renting for a year or two while they wait for the bottom to occur in the residential sales market. http://bit.ly/9Gdjg

They're just trying to get priced out forever.

This time of year is the best time of year for renters. Landlords who don't make concessions have their property sit on the market for extended periods.