Difference in rental market btwn July vs. August

Probably no difference.
People aren't rushing back to NYC , especially with very few wanting to work in an office, restaurants struggling and crime escalating

My employer is slowly increasing the return to office drum beat. However, they don't know how to convince employees to take mass transit. they are hoping other employers force employees to come back to the office and they will then have cover. I previously would have bet coming back by Labor Day, and I think my employer may try for some sort of push by Labor Day -- I practically think this is a 2022 event.

The #1 issue from the employers mindset is the unwillingness by employees to take mass transit. A little complicated as I think that empoyees are unwilling because of (i) COVID fear, (ii) crime fear and (iii) they don't really want to commute to the office anymore. So the employers are trying to say hey (i) we have to get back to work, COVID is before us, but also say (i) we are mindful that actually it isn't entirely safe to get back to work so come back when you are comfortable, (ii) we understand on ii but won't really acknowledge it as that would give you more reason not to come back to the office and (iii) we don't want to be the only firm militant about this as we know you don't really want to commute back to the office. So I think it is beyond Labor Day when I see 50% of people commuting back to the office.

In my company (big finance), some departments want to come back sooner than later (e.g., trading, merchant banking), but the company as a whole has said "more or less, after Labor Day is when we expect a large number of people back". However, they're also rethinking how many people *have* to be in the office, and whether they *want* to be in the office. Outside of the front office, we may end up with about 50-75% back at any one time. Plans are underway to reduce our total NYC leased space (but offset with satellite suburban offices, to somewhat address the commuter question).

Jamie Dimon (not my employer) has said he wants everybody back as soon as possible, but he *has* to say that: having just torn down the old headquarters they're already committed to completing an even larger building, and it will look a bit silly if they don't fill it up with staff.

As it relates to NYC residential real estate, schools opening in person in fall will mean that more people will need to be in the city even if they go to office 3-4 days a week. So even with 50 percent occupancy on any given day for offices by Labor Day, much higher percentage of people will need to be in their NYC homes. Companies will have a hard time with 100 percent back in office 5 days a week due to subway crowding. I guess more people will walk or bike to work.

The "fear" of taking mass transit is pretty much a slap in the face to those of us who have been taking mass transit for months, whether because we had uncool in-person jobs (like me, selling apartments) or cool ones (newsflash: most of my doctor friends do not drive to work every day). But then again, I live on the Upper West Side, which according to those populations is some kind of John Carpenter film, so what do I know.

Mass-transit-anxiety may also be a screen that working parents are trying to hide behind, but today's mayoral announcement that all kids will be in school in person in the fall changes that dynamic, I think.

I was stuck in some serious traffic this past weekend so I'd say NYC is back. I did not miss the traffic. Streets and stores and restaurants look quite full in Midtown. A friend just signed a new lease in a luxury building in Columbus circle... only about $200 below where the rent would have been at the end of 2019.

My office (small finance firm) announced 2 days per week in office and rest of time from home starting in June, with rotating A/B teams sharing desks. Main motivation is to give summer interns, who will be 100% in person, a chance to meet the team. Plus, with all the people hired during COVID we do not all fit into the existing facilities. Suspect after the internship, we will be back at the office 5 days a week. But I hope at least weekends at the office could be a thing of the past.

My partner was itching to be back at the office (big tech firm) where he was more productive, and since January, he has been going to the office every day (one of only few people on his entire floor!).

I reverse commute and my employer had a mass transit prohibition until just a couple of weeks ago. Kind of silly as I'd still ride the bus and subway on my own time. Regardless, after a few 2hr drives home from the office, I was thrilled to be back on Metro-North.

We've been interviewing candidates lately and the ones who ask about remote work and show resistance to being in the office are sent to the bottom of the pile.

For NYC residential real estate, re-opening announcement of schools in fall is critical turning point. People with kids in NYC schools will be back whether or not their offices are open in person. While I believe, office attendance will only increase over time due to logistics issues at the employers and resistance from certain employees, adequate vaccine availability without wait is a game changer. I am sure there will be massive turnover and replacement hiring.

As far as summer demand for housing - you still have many firms doing remote internships and remote start for new college hires. Normally that drives new demand for housing in the June/July timeframe, and is still at reduced levels.

I was listening to a Jonathan Miller on a podcast and he raised a good, if obvious point...
The city always has turnover of people moving in & out.
The "exodus from the city" 2020 was less a function of people leaving (though exits did tick up) but more a function of new arrivals dropping to near zero.
Immigration restrictions, remote college, new hire/intern remote work program, etc all drove new inbound demand to the floor.
We are now seeing the new demand return, though arguably still at a reduced rate considering ongoing restrictions & remote work.

The real back to work push is going to be Labor Day, so September is when I would expect rental inventory to have dropped off as things fill up.

Most people can do their jobs remotely, what's the point to come back to Manhattan to work? For better commute or lower cost or what?

@anton, certain information workers who are at career plateaus can work remotely pretty much forever. Everyone else needs to be back in office, at least part-time, for team-building and skill-transfer reasons.

There's a term (which of course I forget, because I'm old) for the network effects of the random collisions that you get from the density of a population; but they're real effects. Think "Silicon Valley" when it first started. Anyway, that same principle that drew many of us to a big city in the first place -- so that we would have those encounters that we wouldn't have in the smaller places we grew up -- holds for work life as well.

What's interesting, though, is that many of my cohort who are bosses -- law partners, say -- are indicating that their younger employees don't want to be back in office... where, from the bosses' POV, those are the people who most need to be.

ali r.

ali, yes, old style bosses always want people to work their @ss off. my neighboring team has such one, he never worked from home, and never let his people work from home until the company mandated some kind of working from home policy (mostly for PR and AD reason) before the pandemic started. but after a year of fulling working remotely, this cruel boss himself doesn't want to return to office any more, LOL

Or because you enjoy living in New York City, along with everything it has to offer. There's certainly nothing wrong with living in Montclair New Jersey, however it's quite a different experience from living in Cobble Hill or Greenwich Village.

I no longer live in NYC full-time, however,I did put in a solid 30 years of calling it home base, including raising two children there.

Pre-covid people weren't being forced to live in New York City, they lived there because it's one of the greatest places in the world to live. And I think, many people will look back on their years in the city, as probably some of the best times of their life.

My firm and its 1,700 employees in Manhattan are returning to in person work in mid-summer. I have been working in the office every day since the beginning of August. We had been averaging about 125 people per day in the office until May; it has been about 250 this month. Perhaps tellingly, those coming to the office the past nine months skewed very heavily to the over-40 age group.

It is simply not possible to train, mentor and make hiring, firing, compensation and promotion decisions by computer screens. Virtually all of our professional staff, particularly those under age 35, live in Manhattan or Brooklyn (or, at least did pre-COVID). The commute was not putting a dent in anyone's life. Yet, even fully vaccinated people who live within a stone's throw of our office do not come to work.

Part of what made Manhattan safe, both in perception and reality, was the prevalence of large swaths of people everywhere at all hours of the day. This is one thing that set NYC apart from other large, urban cities like Philadelphia or D.C. The number of deranged people on the streets and in the subway has certainly increased post-COVID for reasons not worth exploring here, but what really changed was the fall-off in pedestrians and commuters that increased dramatically the relative percentage of deranged persons. This will reverse itself and, in my view, has reversed considerably in the past 4-5 weeks. Of course, if the subway is a concern, there are 1,000s of apartments within a few blocks of our (or any other Manhattan) office. Or, get some exercise. I walk my 55 year-old butt 3.5 miles to and from the office every day.

Good for you on the walking, good for the health, good for the stress and mind! I walked and biked around the city 90% of the time.

Maybe look at it backwards.
Whats better in 2022 when your lease is up?
Will there be more competition for your apartment next July or August.
Id say August, so better with a July lease.
But I defer to our resident brokers :)

There is essentially no difference in price between July and August. However if you're an owner, you would prefer the lease to end on July 31st, the rental market slows up significantly after Labor Day.

Market is heating up fast
https://www.forbes.com/sites/noahkirsch/2021/05/26/bidding-wars-and-broken-promises-new-york-citys-rental-market-bites-back/amp/?__twitter_impression=true
Time for the bears to capitulate.

Market is heating up fast
https://www.forbes.com/sites/noahkirsch/2021/05/26/bidding-wars-and-broken-promises-new-york-citys-rental-market-bites-back/amp/?__twitter_impression=true
Time for the bears to capitulate.

I've observed that the nature of bears is to never capitulate, simply hold their position until the next inevitable bust occurs.... Then when the boom occurs, back to the den ( :

I think about the financial crisis of 2008 and how many "brilliant" people missed it. I think Fannie Mae, Lehman Brothers, AIG etc all had AAA ratings days before they collapsed...

The only way you can reliably predict the future is if you're the one pulling the levers. Although there was a small minority of people who predicted the financial collapse and profited greatly.

Today's market in some ways reminds me of what was being discussed on these boards in 2009. Many posters thought the markets would go into a deep tailspin, they didn't. And then some tried to claim they called it right way back then after the pandemic struck (11 years later). Rinse, repeat. If you were a bear or very negative on the real estate market 11 months ago, what do you think about where we are now?

No matter, the only predictable thing is the markets booming and busting... But the long-term trend is up, so I guess patience truly is a virtue when investing or buying a home.

My former apartment finally re-rented. Last ask was 20% lower than the 2017 ask, 50% lower than the 2008 ask.

It does look like inventory in the building has decreased significantly, though it's hard to say how much of that is simply owners pulling their listings while waiting for the rebound and/or for their own return to occupancy.

I'm returning to the office mid-June, though my coworkers probably won't follow until Labor Day, at which point the firmwide minimum will be 3 days/wk.

I'm bullish on NY as a city, and on NYC housing prices in particular areas (transit-rich neighborhoods outside Core Manhattan, in short). But holding bearish on equities more generally. Mix of reasons:
- Fundamentals. Yikes.
- Greed. Sitting on lots of money that "belongs" in equities but I can't bring myself to invest at current asset levels, apart from my little co-op adventure last fall.
- Hope. Expensive housing (and expensive corporations, to a lesser extent) is bad policy that hurts a lot more people than it helps, and I'm seeing glimmers of a more-competent administration (locally & nationally) that just might do for everyday people what ultralux developers have inadvertently done to their market niche.

This time is somehow different than 13 years ago when QE was fresh and sharp back then, now it became dull. The dulling effect is interesting to study and observe.

I don’t know if I count as a bear. But I’ve never bought NYC RE, so maybe I do? And if so, I’m not sure what all I should be capitulating about.

As a “bear” in 2009, I didn’t think NYC RE would go into a tailspin. Rather, it’d just go sideways for a very long time. This would mean a small loss in the form of negative carry and a large loss in the form of opportunity cost. I can dig up countless posts from a decade ago where I said as much.

Now here we are 12 years later. SE’s Manhattan same-home resales price index has Apr 2009 to Apr 2021 as up 7%. By my count, that is sideways. It’s not really a story about the pandemic (which only took off 7%), but rather that even from the bottom of an epic bust, NYC RE went nowhere despite a very accommodative economic environment. Meanwhile, passive stock index investing netted a 5x return. I sometimes think “bulls” exist in a different reality with a special scorecard whereby they can only receive gold stars.

To put a fine point on it, in 2009 “bulls” took the (say) $1M they had spent their careers scraping together and realized their dream of buying & carrying a $3M family-sized apt in NYC. Twelve years later, they continue living their dream with their families in the apt they continue to carry. Good for them. They have their $3M apt with $1M of equity. Maybe they were luckier/smarter than the broad market and can now claim to live in a $4M apt with $2M of equity. But they live still live in the same apt.

But that was never the “bear” dream. The “bear” dream was to use the same RE-earmarked $1M they had spent their careers scraping together and put it to better use. So they rented the $3M family-sized apt for less than the cost of the bull’s carry and invested the $1M elsewhere. Now, that $1M of RE money put into passive stock indices has become $5M. The incremental $4M is enough to cover the difference for renting a $12M apt for the rest of their lives. Or maybe they were lucky/smart and have it covering the rent of a $30M apt for the rest of their lives. Main point being the can / do live in a dreamier apt.

No one knows what the future will hold. But we know what the past held. If you’re living your dream in the same apt you bought 12 years ago, good for you. Live your dream. But I’m not sure why you care for / expect “bears” living in 4x or 10x nicer apts using the same RE-earmarked dollars 12 years later to “capitulate”. It’s kinda absurd, honestly.

On the OP’s question, ran across the following chart for (typical) seasonality:

https://www.millersamuel.com/charts/manhattan-number-of-new-leases-by-month-average-from-2008/

If you’re playing the long game, I’d go with an Aug lease with free months that push you into a fall renewal cycle.

Nada you tie it all up in a nice bow, but life doesn't always work out that way. You assume everyone would invest that dp money, rather than stay in cash or worse...spend it! I don't think you are a bear, I think you are just a guy that has no desire to own real estate.

Also those nice folks that used the $600k+cc's they scraped together for their dp, continued to earn $1m+ a year (typical income of a client buying a $3mm home in my experience) and hopefully invested some % of it. And at least the clients I work with that are buying $3mm co-ops/condos have significant savings post close, especially those buying a co-op as required by the boards of such buildings. The streeteasy index is nice for reference, but each deal is different. I posted a recent transaction on a Brooklyn deal, purchase 2010 was around $650K recently sold for $1.25mm. So like all deals some are better than others, some stink, I think it depends a lot on what you bought and location.

We have a current offer on a townhouse;

Buyer (early 40's) has $9M+ in liquid assets and earns $1.6mm a year and in this case is financing 60%.

There are other forces that drive one to want to own rather than rent, one needs to do what suits them best. End of story. I'm an optimist, not bull or bear, I just go with the flow, it's not a faith ( ; the market is what it is according to the data we use to measure it. Owning real estate has worked well for me, owning stocks has worked out well for me. You also can't discount the importance of luck. When I purchased homes in Palm Beach County in 2011, the market was in the proverbial crapper. Now my home value has tripled, the last 1/3 of that thanks to migration trends.

Anyway for me it's not a competition of best returns. You live in a rarefied market , perhaps the 1% of the 1%? $6-8k a f2 homes have not done well in resale. My comments are directed to those that thought the real estate market in NYC would collapse (plenty of those posters here) in both 2009 and post pandemic. Not whether or not equities out-performed condos/co-ops over the last 12 years.

What would constitute a "collapse" of the NYC market in your estimation?

The best broad measure of the market is flat since Jan 2009 for same-home resales. CPI is up 26%. Transaction costs run around 10%. Simply by those measures, a 2009 buyer => 2021 seller is down ~30% on a real basis. That's the entirety of a downpayment. And because (interest + cc + upkeep) exceeded rent, it's even worse.

Sounds like a collapse to me, in the form I thought it'd take. But if you don't think so, that's OK. Would you mind lending me $1T Zimbabwe dollars, I promise to give the same $1T back to you in 12 years.

There's some really good real estate watching in this article. Interesting trade at 220 Central Park South, I guess he's Uber homes can appreciate over a short time, with a little luck. Not that any of these swells probably cares that much or maybe they do, who knows.

The New York Times: The Most Expensive New York Homes Sold in May.
https://www.nytimes.com/2021/06/04/realestate/top-nyc-real-estate-sales.html

"I've observed that the nature of bears is to never capitulate, simply hold their position until the next inevitable bust occurs.... Then when the boom occurs, back to the den ( :"

This is pretty spot on. I was very much one of these bears and at the end of 2010, I recognized the 50% correction that was supposed to happen would only stay at the 20%ish area, would not go further, and things were about to turn around. So I bought.
It suited me quite well as I bought mostly for cash and the funds I used while theoretically (and realistically) could have earned quire well in the stock market, it wouldnt have for me as my risk averse nature would not have earned it.

But now in my 50s, and 3 years after the 7 year itch, having watched cycles and waves from things that are consistent to thing that have changed, hedges that dont hedge anymore, Ive become way more bullish on things that are not real estate(particularly the stock market) and more bearish on real estate.

The nature of real estate is at a very critical juncture and is way too uncertain. It started with Amazon destroying the shopping mall which is(was) a bedrock for the category, and then a pandemic that may have permanently affected office buildings and big cities.

I think today I'd be more comfortable renting and owning a bunch of tech stocks.

Nothing wrong with that truth, just get a bit better diversification with that stock selection!

haha yes of course, I only plenty of the blackrock REIT as well and many other varying sectors.
And yesterday I went from bagholder to silly grinner after the Reddit crowd went for the short squeeze on Clover Health

typo "I own" not "I only"

Keith>> I've observed that the nature of bears is to never capitulate

Truth>> This is pretty spot on. I was very much one of these bears and at the end of 2010, I recognized the 50% correction that was supposed to happen would only stay at the 20%ish area, would not go further, and things were about to turn around. So I bought.

Err, lemme unpack that. Keith posits that bears never capitulate. Truth confirms that. By explaining how she, as a self-professed bear, capitulated in 2010.

Very well, carry on...

truthskr10, from 2010 on it is not a typical bull-bear situation, it is just how the society got affected by QE and all kinds of crazy flooding

Lol! And although my statement was perhaps a little bit tongue-in-cheek, certainly some 'animals' will concede when they've got it wrong. Certainly nobody's always right? And I would steer clear from the ones that think they are... Lol

That's funny Nada

At least now I understand what harlembuyer meant by it being time for bears to capitulate!

Anyways, find it interesting that truth who in 2010 was "buy RE, too risk averse to put the money into stocks" is now comfortable with "rent, put money into stocks". She was on the wrong side of the 2010 trade, as it ended up, due to her "risk averseness" w.r.t. stocks. Now after a run of 5x returns in the stock market, her risk averseness w.r.t. stocks has abated.

Meanwhile, RichardBerg was on the opposite side of the 2010 trade, which ended up right 12 years out. And he too has flipped sides, because of valuations. On the one side, a 25% drop in real NYC RE prices w/ 40% cheaper mortgages. On the other side, real stock prices at ~4x with ~1.5x real earnings.

Or Im just no longer a bear :)