Rents Falling in Manhattan a Lot, Brooklyn Not So Much
Residential rents in Manhattan fell pretty much across the board last year, and incentives like a month’s free rent are becoming increasingly common. The head of Halstead’s rental division estimates that prices are down between 10 and 15 percent from the 2007 peak though the article’s author digs up “anecdotal evidence” that the number is…
Residential rents in Manhattan fell pretty much across the board last year, and incentives like a month’s free rent are becoming increasingly common. The head of Halstead’s rental division estimates that prices are down between 10 and 15 percent from the 2007 peak though the article’s author digs up “anecdotal evidence” that the number is more like 20 percent. One by-product of the weaker market is that many more landlords are now willing to pay a broker’s fee to land a tenant. In the past, slowing sales has often meant a tighter rental market, but that’s not always the case: People assume when sale slows down, rental will pick up, but that depends on what the source of this is, said Gregory J. Heym, the chief economist at Terra Holdings, which owns Halstead and Brown Harris Stevens. When you’re losing jobs, the rental market is also going to suffer. Echoing what we’ve been hearing recently, the rental market in Brooklyn has not softened as much. We’re not renting as fast as we would have expected, said Patrick McGrath, whose firm recently bought and started renting out The Standish in Brooklyn Heights. We’ve had to provide concessions — a free month rent, we pay the broker fee. But rents are around where we expected them to be. We’re in the ballpark.
A Month Free? Rents Are Falling Fast [NY Times]
Photo by turkeychik
Actually, if you look on craigslist, it looks like STUDIOS (not 1 bedrooms) are renting for $1300-1800 in Park Slope. Which is down from about $1500-1900 in the past couple years.
I see one listing for a 1 bedroom for $1495 and it’s between 4th and 5th Avenues.
Guess I need to keep looking.
Corolla,
I wonder exactly the same thing. As a landlord, I’ll admit that I’m nervous. Someone at the NY Times has it out for us landlords.
But at the end of the day, if you’re location is ideal, and your apartments are in excellent shape, flexible landlords still should be able to get decent rents. In reality the local NYC economy is bad, but not yet horrible. I’ve got 100% occupancy right now, but I’ve been very flexible in order to keep it that high.
Fringe neighborhoods like Clinton Hill, where our buddy Brownstoner resides, are going to see huge rent/price drops, unfortunately. Rents in Park Slope, as I mentioned in my previous post, are down considerably, but if your building is near the Park, subways, and restaurants — in other words on a “prime block” you’ll be ok. At least you’ll be able to find a credit worthy tenant.
Landlords with lots of debt on their properties obviously will be screwed if rents drop too much.
LOCATION, LOCATION, LOCATION, as they say, will always be the driving force in real estate.
Ironballs,
I agree that rents are coming down (and I’m actually thrilled about it…I hope more people are able to afford these places) but in a search on craigslist, please show me where the 1 bedrooms are for $1500 a month IN Park Slope proper (Flatbush to 15th, PPW to 4th). I see maybe 2.
http://newyork.craigslist.org/search/aap?query=park+slope&minAsk=min&maxAsk=max&bedrooms=
” I wonder if prospective renters are going to show up at open houses demanding additional concession based on the article itself”
I’d tell them not to let the door hit them on the way out.
Personal anecdote: I rented my current place in early September 2007, which was probably the worst time ever to rent in Park Slope. Inventory was absurdly tight. I was in the market for a 3-bed, and the brokers were showing me things for $4k and up that were barely fit for hipster shares. I finally got lucky and found a perfectly good place on a great block for just under $4k. Based on the market at that time, I thought I was getting a very good deal. I re-upped the lease in August of this year for about $4100. I probably should have groused about it, but $100 a month wasn’t something I was going waste time over.
I pay pretty close attention to market comps, and at this point I think the going rate for my place is about $3500. Who knows what happens between now and August, but it sure isn’t going to go up at this point, so I assume that I will either (1) re-up my lease for $3500 or less or (2) move and pay $3500 or less (without any broker fee). My wife wants to move closer to center slope, so a move won’t be a big deal for us.
The rental market has slowed all over NYC — prime Park Slope included.
A good friend of mine just gave up an $1,100/month small rent stabilized one bedroom apartment in Park Slope because brokers and landlords he’s been calling are begging him to just come and LOOK at their apartments.
I told you folks what was happening to the NYC rental market months ago and most of you laughed me off.
From what I’ve seen, and what my friend who’s looking to rent a new place starting March 1st in Park Slope tells me, it’s easy to find a good sized, “renovated” one bedroom apartment now in Park Slope for around $1500/mo. He plans to negotiate the rent down to $1300/mo which shouldn’t be hard given all the vacancies advertised for rent right now in Brooklyn.
Look on Craigslist, if you don’t believe me. There’s TONS of inventory out there. I haven’t seen anything like it since the late 1980’s.
This NYTimes article is currently the 2nd-most emailed article on their site. I wonder if prospective renters are going to show up at open houses demanding additional concession based on the article itself. Interestingly though, the article even mentions that these things are happening in winter, the slowest rental time of the year.
“Not sure how they actually collect the data on brownstones that rent out 1-2 units which make up a large part of the Brooklyn renatl market.”
This was the quote I was commenting on.
Sure, if you’re now going to say ANY 1-4 family buildings, the conversation is much different.
You used the word “brownstone”
corolla…for the benefit of the discussion I would include all 1-2 family buildings…maybe even 3 & 4 family buildings fit the discussion I’m trying to have….brick and limestones welcome.
Larger than 4 family are typically professionally managed investment properties.