It's Good To Be A Renter Right Now
Psssst. Have you heard? Rents are dropping. Take the case of the Pettyjohn sisters, who, out of desperation, rented a crappy, inconvenient two-bedroom in Bushwick last year for $1,700. Just recently, they were able to upgrade to a larger, more attractive place two stops closer to Manhattan on the L train for the same price….
Psssst. Have you heard? Rents are dropping. Take the case of the Pettyjohn sisters, who, out of desperation, rented a crappy, inconvenient two-bedroom in Bushwick last year for $1,700. Just recently, they were able to upgrade to a larger, more attractive place two stops closer to Manhattan on the L train for the same price. In Sunday’s Real Estate section, The Times chronicles this story and others like it while pointing out that the number landlords now willing to pay a broker to rent their apartments has gone up almost four-fold in the last year. Where will it stop? Anybody’s guess, though the chief economist for Halstead and Brown Harris Stevens says it’s unlikely the price trend will reverse until the city stops losing jobs.
Why Are These Renters Smiling? [NY Times]
Photo by mesmart
fsrq… I think crime is going to rise in this economy. Make sure your insurance is paid up. And i don’t say this as a joke.
Rob – any LL who would rent to someone without checking credit is NUTS – it is FAR FAR FAR cheaper to keep an apartment empty then it is to rent to a professional deadbeat who can live in your building virtually rent-free for the better part of a year while you pay thousands more to finally get L&T Court to issue a meaningful eviction.
Also the trends being described in terms of drastic rent reductions etc…. are mainly a over-leveraged market-rate Manhattan syndrome; where the operators are working on such thin margins and/or little time to refinance and need to show cash flow asap – either to avoid losing the property or at least force the mortgage holders to consider a refinance-credit extension.
For sure this trend will lower overall rents but as you move down the scale – cheaper apartments (especially in outer boros) are being somewhat propped up by people individually cutting back – i.e. looking for the outer boro $1500 1Br as oppossed to the $2000 Manhattan one.
Obviously this trend can’t last forever – at some point the differential between Manhattan ‘luxury’ and outer boro ‘practicality’ will be too narrow to ignore and the spread will widen, most likely with outer boro rents falling as well.
2 interesting things to watch is 1. Will the Brooklyn ‘luxury’ nabes like Brooklyn Heights, Park Slope, Williamsburg – track Manhattan or Brooklyn – in past downturns Manhattan still maintained a hefty premium over Brooklyn – but the question can be asked with a cultural renaissance and continued low crime – could parts of Brooklyn maintain or exceed traditionally higher priced Manhattan neighborhoods. 2. Will low crime in even less chic outer boro neighborhoods see more or continued gentrification (albeit with poorer gentrifiers) or will the city trend back to more economically homogeneous neighborhoods of past recessions.
My wife and I were discussing “how much would our landlord have to lower our rent for us to stay here” this weekend.
We want to move because our place is now overpriced for the market and because the space isn’t working that well for us.
Our lease is up in the fall, and it looks like we’ll have a lot of options for where to move. We have no intention of asking for a rent reduction before our lease is up, and since we want to move, we weren’t going to really ask for any sort of reduction for a renewal.
But when we thought about “what would it take to keep us here” we both agreed pretty quickly on the answer: 15-20% off.
At 15% off, we still look but only move if we find a great deal. At 20% off, we probably don’t even look much.
We likely could find cheaper places, but not if you include expense/hassle of moving for what will likely be a place we only stay at for 12-24 months.
I have no interest in playing hardball with my landlord, but I guess if he asks, it wouldn’t be fair to not tell him.
Maybe this site’s bitter feud between nervous owners and wannabe buyers has some basis in reality:
“Right now, she said, there is a standoff in the market, with buyers expecting huge discounts and sellers resisting. ‘The buyers and sellers have gotten different memos of what the price should be and no one is budging,’ she said.”
http://www.nytimes.com/2009/03/29/realestate/29deal1.html?ref=realestate
if you resign a lease that is less then 20 percent off of what you were paying without looking to see what else is out there it woud be foolish. There is a housing glut in NYC right now that is snowballing. It will take years for the market in NYC to even bottom. Just check out what the big Manhattan landlords are doing. You can get a 1 bed on the UES for 2200 with a doormen right now. Housing glut
You can ask… sure.
more importantly — do you think i can ask for a reduction in my rent? currently $2300 2br at adelphi & dekalb?
“Where will it stop? Anybody’s guess, though the chief economist for Halstead and Brown Harris Stevens says it’s unlikely the price trend will reverse until the city stops losing jobs.”
No, not a guess. A slam dunk.
Study the comments linked on the online version of the article. The Times subjectively edits out only 5 of like, 47, for you to see right away. Then they stop accepting comments. Comment # 23 calls them out.
I love how the broker tries to downplay the commissions-paid-by-landlord trend. craigslist is gonna crash!
***Bid half off peak comps***
“Pettyjohn sisters, who, out of desperation, rented a crappy, inconvenient two-bedroom in Bushwick last year for $1,700.”
No, they didn’t rent in Bushwick. They rented in “Williamsburg”. At least that’s probably what they thought when they signed the lease. Broker fraud, boy, I tell ya.
***Bid half off peak comps***