Tales from the rental market part 2

Directed from https://streeteasy.com/talk/discussion/46129-tales-from-the-rental-market

I feel like market has softened going into labor day. Not pricing per se, but the price indiscrimate/sight unseen chomp at the bid. Feel pretty confident we will find our unit this Fall, although it will be more than it was a year ago.

I'm not sure how covid will affect the seasonality of the rental market. However when I was doing rentals 15 plus years ago, June and July were very busy and August was bonkers as everyone who waited too long was scrambling to get a place.

Then things slowed down dramatically post Labor Day.

Market is more active than I give credit for. A decent listing was posted. I got to open house and was told I was second of the day... while I was up there... at least 4 other groups showed up in the next 30 minutes. Older parents with one teenager + multiple young couples with no obvious signs of kids. Price slightly high for what I am willing to spend so I didn't even bother putting in an offer... with so much foot traffic the owners would never hit something below ask until it sits on the market for a month.

Mouse, what kind of lease situation are you in that allows you to end it at any time? I ask because you are in ever-looking mode, which is the opposite of me. I don’t bother seeing anything until ~5 weeks before my move-out date, which is kinda the last moment possible for condos given approval package timelines. Then, I just see everything I’m going to see in ~2 packed days and go from there.

We stayed in our unit through the pandemic. We have been month-to-month for a very long time now. Allows us to be choosier, which may not be a good thing :)

I am hearing that many people are getting tired of the suburban and small vacation town life and want to come back to NYC. Delta resurgence has slowed that a bit. So going by the past seasonality in rental and sale market may be tricky for now.

People are slowly coming back to NYC
They are excited that DeBlasio and Cuomo will be gone

I really see my biggest issue is people are willing to spend a higher % of their pre-tax on rent than me. Good for them (I assume they are younger and healthier!)

OR....they are 25+ (or even under) and are still getting rent money from / guaranteed by mommy and daddy

What's the deal with this one? I look at the history and it strikes me it hasn't rented since June 2018 and there was false data in the MLS listing for May 2021 saying "rented"?
https://www.urbandigs.com/building/243-east-78-street/5a/rental-listing/?teamid=23964

That would be 3 years of $0 rent on a $12k/month unit? Why don't they cut the asking price to $8K or $9K and come out ahead? What game is being played here by leaving the unit vacant? Or is the PoggenPohhl kitchen just worth $12K/month and potential tenants are too dumb to know this?

Seems like they opened in 2018 after a building gut reno, got a 1-year tenant in each of 2018 and 2019, but have been empty for a year. Seems like they preferred to hold the line on rent while rotating through shadow inventory to keep things looking fresh.

FWIW, this is a common phenomenon where a new building commands top dollar when it first comes out, but after the shine comes off a few years later they attempt to maintain the price (where renewals are likely happening) but it just isn’t as shiny anymore.

Don't underestimate the role CMBS can play in the decision making process for building owners especially through the past 18 months of pandemic/down market/etc. If something triggered special servicing every decision has to go through the servicer and get sign off from any number of knuckleheads, some of which are incentivize for project failure.

@30yrs fascinating! I have heard about some kinks introduced by various types of debt financing. Sounds like all those contracts were designed under the premise of real estate and rent always going up in price. The moment there is a correction for any reason, these loans are underwater and the way the contracts are structured is messing with everyone's incentives.

@Inonada I imagine you are correct. It never occurred to me there would be so many 1YR leases back-to-back including the pandemic. Such a large expense, including moving costs/furniture tweaking, for the tenant spend as such a short term living arrangement! The dollars have to be rounding error to them.

This is another renting segment that I don't understand, and I guess outcompete me all the time. In addition to the cohort spending a higher % of their income than I do.

No-fee higher-priced apts are a magnet for 1-year tenants. The tenants know they are going to be gone after a year: they need a place while they are doing a reno, finding a place to buy, a temporary job situation, etc. So not paying the 15% on a single-year lease makes a big difference.

And scouring the earth to save another $1K / mo isn’t worth the effort. Not only is it for just one year, but they are otherwise very focused on said reno, prospective purchase, new job situation, etc.

Aug rents were around halfway between pre-COVID highs and COVID lows:

https://www.millersamuel.com/files/2021/08/Aug21MHTrent-conc-scaled.jpg

While inventory was slurped down at a pace that left just 1 months’ supply (ignoring shadow inventory):

https://www.millersamuel.com/files/2021/08/Aug21MHTrent-nlINVmos-scaled.jpg

Discuss…

Now we can say NYC is back! My firm back to office next week (after Jewish holidays). For real this time. Technically we were partial week from office for a while but most people ignored that in favor of their Hamptons house...

On the other side of the coin my friends at some of the bigger bank that already did RTO are having their required # of days/week reduced down to 1-2 days.

The only big fund I know of that is mostly RTO already is Citadel, but that's no surprise given their pandemic response.

My fund & most of my friends funds had pushed Labor Day return out to October once the delta wave came in August.
Within the last week or so that October date is now going to move out again, some all the way to January and others just saying "no new date, but we will give you 4 weeks notice".
Most have offices open for those that want to go in voluntarily, at reduced capacity.

Most of tech, including Microsoft announcement this week that they are not returning til January.

Cases haven't really settled down and now school reopening & colder weather are more likely to increase rather than decrease cases.
Already hearing from friends whose kids are COVID+ in some of the burbs that opened schools.

On the positive side we may have 5-11 vaccinations by Halloween/Thanksgiving time frame per a NIH town hall today.

So I think the status quo is going to sort of linger on a bit longer, and then by EOY .. kids will get vax, holdouts will get vax, and the rest of us normies will get boosters.

Maybe the big Labor Day RTO burst moves to January or Spring. Or maybe its just a gradual slow wave between now and Easter with inflection points each month, I don't know.

I was looking at some 1BR rental prices for fun and that segment seems to be on fire. $80 per year sq ft in prime downtown basic luxury doorman building. Nicer ones $100 per year per sq ft. Crazy!!

Seems normal to me , not sure what the issue is here

A lot more street activity in Midtown this week. Traffic has picked up since Labor Day.

https://www.urbandigs.com/building/243-east-78-street/5a/rental-listing/?teamid=23964
Was rented
Curious for how much

Or was it? It appears to have been rented in May and then again in September??

Not a lot of square feet for the price but very nice layout in that apartment.

The number of SE rent listings is down to 13.4K.

Chicago is much behind NYC as a walkable city. It feels like a city where you must have a car and occasionally need to drive, but I guess could survive without a car if you choose to live in the Loop. RE prices and rents though are pleasantly low compared to NYC, and I heard that is due to the city's generous building policy.

Walked through Times Square this weekend and happy to report it was a total zoo again, with some Broadway stars doing a live performance near the TKTS booth, and a dance flash mob on the other end of the square. Few adjacent streets were closed from traffic for a street fair. Most people wore masks.

You can't beat NYC for walking, except for Europe. It's so vertical. It's been about 20 years since I was in Chicago last but I was surprised how many large new housing developments topped out at four to six floors, with parking, in central areas that could easily support a tower.

Not just Europe, Asia too. Very walkable cities (with good public transport) in Asia.

Europe got too many pickpockets, asia is much safer though.

Total SE rental listings down to 12.7K.

Wow that's quite a drop! Assuming that it's accurate?

What's the slope of the drop? SE hiked rental listing prices 50% this summer, citing the recovery ... I wonder if that's had anything to do with it?

ali r.

I'm not sure on the slope of the drop. I've also thought about the increasing price for rental listings, particularly in a multi-year context. E.g., the number of listings they had in Aug according to their data dashboard was the lowest in years, but it could have just as well been from less posted listings.

I am also seeing mixed messages in some buildings I've tracked since last year. E.g., Prism is now at 13 units, which is appreciably higher than what they had over the summer:

https://streeteasy.com/building/prism-at-park-ave-south

The jacked-up pricing can't be helping...
https://streeteasy.com/building/prism-at-park-ave-south/8a

09/22/2021 Price decreased by 1% $4,160 ↓
09/21/2021 Price decreased by 0% $4,185 ↓
09/09/2021 Listed by Equity Residential $4,197
10/12/2020 Equity Residential Listing is no longer available on StreetEasy Last priced at $2,620 $2,620
05/27/2020 Previously Listed by Equity Residential $3,280
06/01/2019 Equity Residential Listing is no longer available on StreetEasy Last priced at $3,450 $3,450
05/28/2019 Previously Listed by Equity Residential $3,475
06/19/2018 Equity Residential Listing is no longer available on StreetEasy Last priced at $3,335 $3,335
06/07/2018 Previously Listed by Equity Residential $3,410
06/05/2015 Equity Residential Listing is no longer available on StreetEasy $3,520
03/09/2015 Previously Listed by Equity Residential $3,520

Kinda feels like their computer model overshot the mark going into summer (i.e., price so that they had little inventory left), and now it's overshooting the mark in the other direction (i.e., price so high that they'll have lots of inventory on their hands).

To the extent you think high-priced listings are impervious to SE price hikes, there are 105 $20K+ listings right now. About two months ago (as I noted earlier on this thread), it was 118. Last winter, it was either 270 or 400 (I can't fully recall which). So by those measures, inventory may be bottoming out.

A few datapoints/thoughts
1) Rental pricing is going up while interest rates are going down; the lower carrying costs are not translating to lower rents
2) The best units seem to go very quickly
3) The "3rd year option" is no longer on the table as far as I can tell
4) Happened to speak to a building owner without really knowing it and he said does not expect rents to decrease for any reason from here. Vacancy is not yet to pre-covid, but its stable and not expected to go up from here.
5) Spoke to family who just bought a house in CT to move. Cited higher taxes, congestion tax and cost of private schooling. They are moving next year.
6) The 3BR premium is ridiculous. You guys should buy some 3BRs and list them for rent!

Mouse, 3BR premium only exists in prime areas, good school districts and some areas close to top private schools such as Carnegie hill. Otherwise, rent per sq ft for small 1/2 bedrooms are the highest.

Mouse, If you look in Murray Hill or Turtle Bay, you may find that 3 bedrooms are a discount on price per sq ft basis.

Thoughts on your thoughts, Mouse:

1) I can understand why you say that, but what you said is the total opposite of what all economists believe: lowering interest rates stokes inflation / retards deflation. You could just as well ponder why lower interest rates do not result in cheaper iPhones.

2) That's pretty much always the case. The only times / places the best units didn't go quickly was in the depths of COVID or at the high end.

3) This might be more a thing at the high end?

4) Building owners always expect rents to go up. The fact that he said he just doesn't expect it to decrease makes him seem downright bearish ;). Honestly, pricing seems to have gotten ahead of itself. See Prism, where they are now asking (for 8A) 58% higher than a year ago and 20% higher than summer 2019. Seems like a formula for increasing vacancy and forcing a price drop. I don't have as much conviction on the outlook as I did last year, but it kinda feels like a mischaracterization of the summer sugar rush as a new state of the market.

5) Some of that is normal, but the new work-from-home regime is a game-changer in that regard. Commuting 3x a week is more manageable than 5x. Alternatively, it's also easy to spend 3 days / 2 nights per week in the city and avoid statutory NYS/NYC residency at ~180 days per year.

6) Wouldn't it make more sense for you to buy it than me buy it & play LL by renting it to you??? Seriously, why doesn't buying it make sense for you?

The same as renting, buying 3bed room also pays a premium. There is no way out unless moving to a a less expensive neighborhood

Here is an example of good deal in Turtle Bay less than $72 per sq ft per year. And you get nice views. If you want prime area, you have to pay up in rent as well as purchase price.

https://streeteasy.com/building/the-alexander-250-east-49-street-new_york/rental/3677999

1) Price is determined by supply and demand primarily, less so by cost + margin. Decrease in interest rates pushes up prices, just like it does with stocks, stabilizing carrying costs. It also appears that at least half of owners in Manhattan own units without a mortgage.

6) I agree with ionada that buying yourself might make more sense: there are some great incentives from the gov't (tax deductions, primary residence condo/coop abatement) that are available only to owner residents and can tip the scale. Particularly valuable for high income folks in top tax brackets.

What I think could be a value add strategy in areas where 3br premium exists is buying smaller units and combining? Is that a thing?

Yes, I think it is. I personally dislike them myself because they result in spaces that don’t carry 3BRs as well. Larger living areas are in greater need of ceiling height & open views to compensate for the size, and lower floors where combo-able smaller units tend to exist tend to not have those things. Of course, that comes at a cost, but it’s a cost that I’m personally willing to pay. Other obviously feel differently, which is why it’s a thing.

There are good combos and there are bad combos. In one of the buildings I use as a neighborhood reference point for prices, there are a few 2-BR C line units on the higher floors (originally designed as the combination of lower floor C and D units) which were later combined with the B unit, giving a well-designed 3 BR layout, without resorting to major architectural work and odd spaces. This particular combo could be arranged as a 4 BR, but you end up with an significant imbalance in public/private space, and the hallway situation gets tricky. In this particular building, that combination of units doesn't result in wierdly outsized maintenance charges on the combined unit, which is often one of the main drawbacks of combos in coops.

Could be interesting to do, but I imagine really tough to find two units next to each other that are simultaneously available for sale, and then negotiate acceptable price and terms with each owner. More plausibly, ether an owner could buy a neighboring unit when it becomes available, or a sponsor could combine their units if they are next to each other. Any other options? The logistics seem tough, no wonder this sort of thing does not happen more often in areas with high demand for large units.

I’ve often found when looking at units that have been combined, other than some wasted space, the main drawback seems to be the (original) kitchen which is too small for the combined space

It's rare that I've ever walked into a combined apartment and within 30 seconds not become a cutely aware that it's a combined apartment.

Looks like it hits all the issues mentioned above.
https://streeteasy.com/building/the-savoy/22abcd?utm_campaign=Agent_Update_Saved_Folder&utm_medium=email&utm_source=Iterable

This unit posted above seems great to me, no complaints from me on layout or size of the common space. I appreciate having separate spaces for various needs (bedrooms, offices, closets, music rooms, etc).

I will start a list of issues:
1. Kitchen is too small for such a large apartment.
2. Master bed room is a very strange shape.
3. Living room is cut up into two by the kitchen.

4. Bedroom 4 does not have a window.
5. Ceiling heights for such a large apartment are a little too low.

What’s really funny is that our very large apartment had a galley kitchen (original to the apartment) which we basically combined with the maids room to have a kitchen that worked with the apartment

6. Monthlies are pushed up to $8500.

Krolik, I see combo opportunities show up all the time for whatever reason. And a lot get assembled over time. This Savoy building seems to have a lot of combos.

The combo history of this Savoy 22ABCD seems to be buying:

- 22BC in 2001 for $1.1M
- 22A in 2004 for $0.9M
- 22D in 2008 for $1.3M

That’s $3.3M for the apts pre-reno/combo. I figure another $1.0-$1.5M for the reno/combo circa 2009/2010? Current ask is $4.5M, with no takers at that price over the summer.

I don’t know this market well, but compared to Manhattan price trajectory over those years, that doesn’t seem like a value-add $$$-wise. To say nothing of the headache. But I am guessing it was a labor of love.

The alternate floorplan also clearly illustrates why the layout is structurally constrained to be what it is. The building’s structure was designed to hold smaller apartments, with columns spread around enough to allow smaller-apartment rooms but no more. This is why combo’s of buildings from this era invariably get a sprawling / meandering feeling. Krolik may like it, but most people don’t. That’s why developers don’t build large apts like this, paying the higher structural costs for carrying larger rooms.

I guess I am skeptical of the notion of a “3BR premium”. This apt shows why 4 1BR apts do not add up to a 4BR apt. The premium is coming from other factors, IMO, some of which are crucial for carrying a 3BR/4BR (to conventional taste).

Also, note how the most recent sale in the building was a 1BR that went for $1333 ppsf ($1550 ppsf ask) in gut-reno condition after 1 month on the market:

https://streeteasy.com/building/the-savoy/32a

The highly-renovated 4BR lingers at a $1412 ppsf ask. Seems like a 4BR discount, not premium.

For the last few years, it is not worthwhile to combine condos in non prime areas when there is a so much finished inventory available. However, if you combine a large 2br coop with a studio or 1 bed room, it is probably still value added.

Just taking a little bit of a guess here as well, certainly many more buyers for a conventional, nicely renovated one bedroom than for a frankenstein 4 bedroom.

At least in my personal experience, my 3/4 bedroom clients tend to be much more particular about the home they buy. As it typically needs to work for more people, most likely a longer term hold and significantly higher expectations as they're usually at a very successful point in their career.

Sort of fits mouses profile. There are options in other neighborhoods/boroughs, however at this stage of the game there are certain sacrifices he's not willing to make simply to find an affordable home. No judgment mouse, just an observation.

On another note the Brooklyn rental market appears to be extremely hot. I have clients that sold their home to take advantage of the current market, and are now struggling to find a rental replacement. They've lost three 'bidding wars', they're looking for a large 3 bedroom. They've been looking for about 2 to 3 months.

Renovation cost kills the combination method

The above, plus:
7. There is a lot of wasted space in the east bedroom (at the bottom of the original plan), and the adjacent 'home office', apparently as a result of trying to make a straight line hallway from the entry to the left living room. This is fixed in the alternative (not 'alternate', dammit) plan, at the cost of losing the home office, and creating an oddly shaped 'main' living room.
8. The alternative plan creates some odd potentially wasted space nooks, as a result of the building columns. And where did the laundry room go? This seems like value destruction.
9. Not only is the kitchen too small, it's a terrible layout.

I think the building architecture (columns, plumbing availability) really limit how this combo can be laid out, and in my view neither the current or alternative is very attractive.

(Could that 'guest room/media room' really be counted as a bedroom, since it has an egress (door), or does there have to be a window?)

An example of a good combo from my reference building:
https://streeteasy.com/building/118-east-60-street-new_york/30bc

It's straightforward to pull down the wall adjacent to the B and C entries and create a foyer & hall, and remove the main wall between B & C to have a giant living room and 3BR, or keep the main wall, wall off the B LR and have 4 BR. B kitchen becomes a laundry room / overflow pantry. C kitchen is small (a limitation of the building), but if you were going with the big LR / 3 BR layout, you could expand the kitchen into the current DR area. If you didn't go crazy, the reno could probably be brought in for less than $1m.

Combined maint: ~$5600, currently in contract circa $2.6m.

I don't think the sub-8' ceiling height can support a combined LR. The alternative (happy?) floorplan is in a better direction, but the double-foyer space is weird layout-wise and creates a space that is (again) too large for the ceiling height. I think something can be done to get a good combo, but the options are more limited in my mind than yours.

Ceilings heights are indeed the biggest issue with circa 1960-1995 vintages if you have more than 1600-1700 sq ft apartment. 8 foot ceilings work just fine for a 2 bedroom, living plus dining area 1300-1400 sq ft apartment. Once in a while you get 9 foot ceilings in these vintages like George Town plaza which makes larger apartments possible to a limit.

Agree about ceiling heights in 1960’s buildings. The offset is that room sizes in 60’s buildings are really good, much larger than in 50’s, 70’s 80’s, 90’s and on.
Bedrooms 12x18, not 10x12, etc etc

I work with a lot of relos -- people coming into town from London, California, etc. -- and to those clients, a spend of $3mm+ (which is what you're looking at in the East 60th Street example, given the combo costs) should get something that feels more like a "house," i.e., more than one exposure.

ali r.
{upstairs realty}

@f_p: Yes, agree. lack of multiple exposures is a drawback on E60th (and, in all fairness, many other buildings, particularly mid-blocks). There is a not-very-big west-facing kitchen window in the B line, but that's it, and that view is of the back wall of 515 Park, 20-25' away, over the adjacent brownstone (who I believe sold their air rights to 515 Park). Not what your clients really want.

1. Kitchen is small but who has time to cook? I use seamless or eat out most of the time, so this is completely fine.
2. Master bed can be easily furnished and laid out, the size is great and I LOVE the WIC. Don't see any issues.
3. This is a flaw here, the split LR, however, I kind of like it. One side of the room is a music room, or a library, the other side is the formal LR. Would work well for me. When you have a large open space, you typically want to create smaller sitting areas anyway.
4. 4th br with no window. This really needs to be a second office. Which would make the apartment perfect for a two-career household with two kids.
5. Low ceilings not a problem cause the space is broken up into smaller rooms, each with good proportions.
6. Monthlies are the real downside. This is a great but very very expensive apartment. But it is a not a function of combination. If not combined, individual apartment monthlies would be horrible also.
7. The building has an odd shape, I think smaller apartments would also have odd shaped rooms. Not super efficient use of space due to architecture, but this apartment has many closets, so I am not worried about storage space. Empty space feels so luxurious.

When we were looking to buy early this year, my broker and few others advised that 118 east 60th building is a little bit of nighmare to both buy and sell because of the ridiculous co-op board. Though the layout and location is good, Such a huge combo apartments in a difficult building like this is rather a hard sell.

Many of the buildings in that neck of the woods can be difficult. We recently experienced that with a building on East 57th Street, took two runs through the board to get it done. And what was strange on that deal the board accepted a significantly lower offer from buyer b, but for some reason turned down our buyer a? Really had me scratching my head as it made no sense. Quite frankly buyer a was more qualified.

A three bedroom two and a half bath just came back on the market at 300 E 59th. Not bad for less than 1.7.

Some great charts in Jonathan Miller's housing notes this week. And of course always great insights. If you're truly a real estate wonk, you're going to want to be subscribed to this.

https://www.millersamuel.com/note/october-1-2021/?goal=0_69c077008e-3d39857b52-120795059

We actually saw a few apts in 300E 59th st as well. But were not impressed with the location being right next to queensboro exit on 2nd av, It is noisy as hell. We realized what were are buying at an discount now also needs to be sold at a discount when we need to sell.

That doesn’t sound like a discount, that sounds like a market price.

Even I’ve heard of the coop board at 118 east 60th. Recall some story where friends trying to sell were annoyed because they thought the coop board was rejecting the buyer because neither party was using any of the brokers on the coop board. Or some such nonsense, don’t recall the details or know the veracity, but recall the existence of drama.

@prp I am down with the idea of buying and selling at a discount.

Something I heard from brokers about coops in general - "you will buy at a discount, but also sell at a discount, better buy condo" along with factually correct but misleading " you are not really owning real estate if you buy a coop"

The entire time you live there, you pay less for housing through lower mortgage and down payment. It is definitely a win. Why pay more? I bought in a building that permanently trades at a discount to neighboring buildings. I think it is undervalued. Happy as a clam to pay less mortgage even if the discrepancy is still there by the time I need to sell.

Wonder how that coop rejection legislation is doing... would be such help for everyone (who is not a very very rich white person)

@Krolik...Agreed, In general that seems like a pretty good reasoning to buy at an discount and sell at an discount later on.

But it also depends on why the entire building is trading at discount. Maybe not such a desirable location in other wise an good neighborhood, may be the low ceilings, may be a stuffy co-op board, may be an unrenovated place in a really nice building.

As a primary residence, my aim is to buy a place, i will be happy living at. Discounts are secondary consideration for me.

Agree that it is important to try to understand the reason for the discount.

A stuffy board could be a negative if you think you might not pass or if you want to do renovations later. However, if you are white and wealthy, and would pass the strictest board, that might be an opportunity to purchase a good unit at a discount. (I think it is ridiculous that the boards act in ways that financially advantage white wealthy people, but it is what it is).

In some cases though, I noticed that there is not a huge reason for a discount, like the stock market, sometimes the market is wrong and there are deals to be had if you've done your research. Best case, the market corrects the error by the time you sell and you benefit from prices closer to market. Base case, the discount to the market remains constant.

Few things i noticed (not backed up by any large sample of data, just anecdotal observations): 1) large buildings with 200+ units trade at a discount, likely because at any given time few similar apartments are on the market competing for buyers. 2) overly strict boards cause a discount 3) weird policies like no pets, etc. also maybe the cause of some discounts 4) of course, high maintenance is a cause for discounts.

Krolik, I think Coops certainly discriminate based on current wealth/income and probably profession (famous musician, actress etc) of buyers but aren’t they screwing the sellers too which in a stuffy coop are mostly white.

Just passed on a reasonably OK unit for $8.5K on the UES. We are going to stay put for a while. To get what we want costs $10K, and to be excited costs $11-12K. And that just isn't in my budget right now (while I can afford it by the standards that others seem to spending on rent, it does not seem prudent to me). After touring the unit for $8.5K... the wife was like "why don't we just move to the suburbs"!

What were the issues:
86th street next to the Fairway was not a great area
8' ceilings felt low
Interior was rennovated yet still falling apart
No building storage space

I could be aging out of Manhattan... others just want it more or have higher incomes...

What kind of unit was it for 8.5k? bedrooms/bathrooms/sq ft? I personally would consider being next to a supermarket a plus. But I don't mind crowds. After living in Herald Square which was a total zoo, everywhere else seems quiet and peaceful.

@300 mercer
some buildings certainly discriminate against non-famous musicians as well! Advice from brokers was to never mention anything music-related to the board in the package or in the interview. Funny enough, the super of my current building said that there is a piano in every other apartment here. I guess all the music-loving people denied from other places found a home here.

On the rich white people that want to but are unable to sell, who cares about those wanting OUT of the club...

I always wonder how these unreasonably tough boards fail to understand that they are reducing the value of their own apartments(or these exclusive clubs). I kind of get that about some really nice co-ops in absolutely prime locations and top class landmark buildings. But if your target audience is an average nyc buyer in 1 to 2MM range, they are just shooting their own feet in this tough market.

Krolik, My point is that it is not clear if the coops are discriminating based on the skin color if you have enough income/wealth and are likely to be a good resident who will not create noise or other issues. They screw every one equally.

prp, If you do not have any intention to sell as a board member or really wealthy compared to your apartment value, you may not care as much for property values. In addition, stuffy coop boards MAY have people on them who are not finance types, may not have worked ever for a living, and may not understand the clear linkage between property prices and difficult board when there is abundant condo supply. That said, there are many coops who are very reasonable in approving new buyers and I hope that more stuffy will become more reasonable as the apartments in them are increasingly more difficult to sell.

Krolik>> What kind of unit was it for 8.5k? bedrooms/bathrooms/sq ft?

I am guessing it was this one: https://streeteasy.com/building/the-ventura/014l

Mouse, unfortunately I think you missed your opportunity. Less than 6 months ago, they were asking $6.3K net effective for 3 floors below: https://streeteasy.com/building/the-ventura/011l

So a 34% increase in the ask, and that was from a point at which prices had already started going up...

The text for 11L says "... Each luxury residence..." and then lists some rather ordinary features. I see a probable 2BR to 3BR conversion, with one BR closet that is the size of most broom closets, a rather small kitchen (albeit w/ window), ordinary sized BRs, and a plain functional floorplan of no architectural distinction. Judging from photos of other units, the finishes are standard white walls, and ordinary fixtures. Could somebody please tell me what justifies the use of the term 'luxury'? And what does that make the Mandarin Oriental unit mentioned in the other thread? "luxxxury"? It's like 'triple mint': A term that should be terminated with prejudice. (Did anybody ever list a 'double mint' apartment?)

In 1989 I worked for a company in kensington/Ditmas Park Brooklyn. On every white aluminum sign that was nailed to the side of the buildings the family owned it read "luxury co-ops for sale".

Keith
TBG

Aaron, "triple mint" has a historical source: appraisers had forms with vertical categories, and one of the rating choices they had was "mint" so something "triple mint" hit that distinction in all three categories -- essentially flawless.

Aaron, This is non-luxury as far as rentals go. Anything with a doorman in good condition is luxury rental.
https://streeteasy.com/building/421-east-72-street-new_york/6.
11L has floor to ceiling windows, good floors, nice cabinets, countertops, and even washer dryer. So certainly luxury in rental terms.

Mandarin Oriental is Ultra-luxury.

ionada>> I am guessing it was this one: https://streeteasy.com/building/the-ventura/014l

UES is so expensive! when I checked in Midtown East, something like this could be found for about 6k

Correct it was 14L. "Less than 6 months ago, they were asking $6.3K net effective for 3 floors below", wow! That's quite the increase. 14L will go at the ask, if it hasn't already by now. Just not enough 3BR in that range close to subways with reasonable finishings. I thought the apartment was fine, but it did have low ceilings (8ft), the layout of room was slightly snug, a few red flags when we visited (although I'm told this is not building fault) of doorbell not working, the entire fridge handle literally fell off when touched, closets off the rails... and then no extra storage/bike room (a wait list for a HS locker sized locker for $1K/year!) and my partner didn't like that area of 86th. If going to spend $100K on rent, woudl like to be more excited by the prospect and this wasn't exciting... so a pass. Given the frenzy that will exist (I think) by those who want to pay $100K, it shows that others value this type of space (or the UES) more than we do. UES is definitely convenient for the kids schools though (these bus commutes can be LONG for kids). Maybe we will look cross town at UWS, where the listings seem sunnier with bigger windows and lower prices.. and the bus commute won't be so bad. But then this is when the conversation pivots to why we are still in the city. I think most people in our position would have left by now. Maybe this nice $6K congestion pricing tax will be our nail in the coffin (I sure am hell not paying $6K, and if we sell our car and have less means to leave the city to get air.. we will just leave. city will be negative on overall taxes in that scenario, but I don't think anyone cares about that, government or voters).

Have to say $8500 for 15mo lease without an in-unit W/D.. in what is definitely not "prime UES" with very adequate (and apparently non-durable!) finishing is.... impressive.

Worth noting that given the area, a rental building with all those common area amenities, and predominately studio & 1BR units .. you probably don't want to be raising a family there. Your neighbors are likely to be transient renters with rotation of roommates keeping you up at night living their "I lived in the city for 3 years in my 20s" lifestyle.

Market's getting a bit frothy and owners are asking for premium prices

@f_p: Fascinating bit of terminology history. News to me, and now the term makes much more sense. Thanks!

The counter examples given above to 'luxury' do rather make 11L luxurious by comparison.

@Anonymouse
The fact that people can figure out which one apartment it is indeed suggests that there are not that many 3brs on the market.
Why not move to UES but further east? Looks like prices are much better there, and you could be nearby the Q train.

What a difference a year makes...

Inventory is moving up. I think the low was ~10 days ago a hair under 12.5K. Now, it is a hair over 13.5K.

The fast shifts in the rental market has been interesting to watch w.r.t. pricing, immediate supply/demand, and longer-term supply/demand.

As I had guessed, the slow trickle that would start in spring 2021 turned into a mad summer rush. The immediate supply, elevated from lingering winter inventory, at first met the demand at lower winter prices. However, as the demand accelerated, supply was taken out and pricing shot up dramatically.

Pricing remains elevated at levels that imply the high instantaneous back-to-NYC demand will continue to persist. A reasonable assessment of the situation would say the instantaneous demand has waned & will continue to do so. But it takes lingering / elevating inventory to actually get (most) prices moving down. LLs are probably thinking “If I could get $X for this last month, why can’t I get it now?” Contributing to the dropping demand / increasing supply is that they will try jacking up old rents by upwards of 50%, which will make some existing tenants leave.

Anecdotal observation/question - but maybe some of the demand has shifted to the buy side?

My BK condo had ~4 sales in 2019, 0 sales in 2020 and now about 8 sales YTD in 2021.
There are now 0 active listings in the building after generally having 2-5 open at any given time for last 3 years.

Combination of seller capitulation and selling for losses/modest gains & non-zero demand existing to take out inventory that sat for 6-24 months and eventually dropped 10-15% on listing price.

Aaron, glad to be of service!

Steve, it is early to tell, but I think that we will be looking at another seasonal, bonus-driven mini-cycle on the sales side... now is the time to shop because when the bonus floodgates open in January, then the buyers are competing with each other.

But it is still such a drag on the condo market to have restricted foreign travel. Both increasing travel and increasing RTO should lift the sales market, but I can't predict the timeline for those two forces... at present, they're both coming in a little slower than I would have thought. And brokers who are smarter than I am are worried a little about the strength of the dollar.

@front_porch - I think you are right on the upcoming bonus bounce, as numbers should be pretty good this year.

re: near term RTO - im still generally seeing from most banks/funds either-
a) minimal "foot in door" 1-2 week unenforced ask
b) delays most banks/funds out into the new year

re: target state RTO
Likewise I am seeing the street converge on "60% in-office" as the ultimate target for most staff.
By ultimate target I mean not now, and not necessarily at the start of RTO in (current target) January either.

I've talked to shops doing something like "1 day now, 2 days later.. 3 days when this is all over in who knows.. somewhere out in 2022".

Again this is all contingent on everything continuing to get better, which Delta caused a 3 month blip so far. Given that and the weather turning and indoor holidays coming up, its hard to remain confident that things will continue to improve and not just sort of linger at this level or degrade again.