By ADAM BONISLAWSKI
Last updated: 10:09 am
January 8, 2009
Posted: 1:12 am
January 8, 2009
How weak is the Manhattan rental market these days? Well, if things keep going the way they have been, you might want to slip your next rent check inside a sympathy card before giving it to your landlord.
According to numbers from the Real Estate Group New York, rents are down across the board in Manhattan. Non-doorman studios, one-bedrooms and two-bedrooms and doorman studios and one-bedrooms are all renting for less than they were at this time last year. Only doorman two-bedrooms saw prices rise compared to those of the previous year, and the average rent increase was less than 1 percent.
Bond New York principal Bruno Ricciotti says that since the Wall Street crisis came to a head in September, he's seen rents for some units fall 10 to 30 percent.
"They're the steepest price drops that I've seen in the 12 years that I've been in the business," he says.
And typically, the city's sales and rental markets haven't seen prices fall simultaneously, as they have been, notes Gary Malin, president of Citi Habitats.
"Historically, when the sales market hits a bump in the road, the rental market is the prime beneficiary," he says. "But [rental] prices are certainly coming down."
And signs of the market's softness don't end at falling prices, either. In fact, says Fritz Frigan, executive director of sales and leasing for Halstead Property, an even better measure of the rental scene's health is the number of buildings that are offering to cover broker's fees.
"Most landlords try not to lower rent because then you're renewing the next year from a lower base," Frigan says.
But in hard times, many will pay a new tenant's broker's fee as a way of luring them to their building. In January 2008, 90 of the rental properties represented by Halstead were covering brokers' fees. By July, that number was up to 400. By November, it was at 1,300.
And, says Real Estate Group COO Daniel Baum, the real rental downturn might just be beginning. Despite all the talk of layoffs, recent job losses are still working their way through the market. (City Comptroller William Thompson has predicted 170,000 lost jobs in the city through 2010.)
The majority of New York's renters start and end their leases in the late spring and summer, Baum notes, adding, "My guess is that you're going to see a lot more inventory coming on the market then."
There are no doubt deals to be had right now, though. In fact, says Ricciotti, New York renters have begun to take advantage of their strange new position in the catbird seat.
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