While the fall is usually a slower season for the New York City rental market, experts expect the next couple of months to be pretty competitive.
With rents high and limited inventory available, a lot of New Yorkers are renewing their leases and staying put, they said.
What to know
“The rental season this year, people have really found the prices to be extremely high,” said Gary Malin, president at Citi Habitats. “People have really pushed off their moving to the fall season, hoping that prices might come off a bit.”
That sends the market into a frenzy as everyone who waited through the summer is now looking to find a place, he said.
Justin Schuss, founder of RentalEngine.com, a listings site, said prices through the fall will most likely remain stagnant at their highs coming out of the summer. Rents for non-doorman one-bedrooms in Manhattan went for an average of $3,248 in August, according to a report from real estate group MNS. One-bedrooms in Brooklyn fetched an average $2,502.
Schuss said part of what drove prices up this year is a lack of new rental developments. “Developers are just not developing as many multifamily rental buildings as they are condo developments right now,” Schuss said.
According to a Citi Habitats rental market report, the vacancy rate in Manhattan in August of this year was 1.31%, up from August 2012’s 1.19%, but still showing limited available units. Studios in Chelsea were going for an average of $2,015 in August, according to the report.
On the Upper East Side, they cost an average of $2,030, and $1,223 in Washington Heights.
Mark Menendez, director of rentals at Douglas Elliman, described the situation as a kind of catch-22. Since there are few apartments available, he said, people aren’t looking to move, keeping the inventory even more limited.
“Because there’s no inventory right now, people are understanding that it’s worth it for people to stay put,” he said. “A little less inventory will be vacant, putting a little more pressure on the marketplace for renters.” While tenants are staying put, many landlords are seizing the opportunity to raise rents, he added.
Lease renewals this year are coming with 10-30% increases in monthly payments.
Where to look
So for those of you who do want to move this fall, where should you look?
Our experts suggest exploring the outer boroughs.
For example, Long Island City, which sits just a five- to 10-minute train ride outside Manhattan, comes highly recommended.
“It’s really one of the most prominent places people have been going,” Menendez said, citing the areas around Vernon Boulevard and Jackson Avenue.
But despite the recent boom in LIC, grocery stores and restaurants are still scarce there. However, “the big developers are building huge retail spaces to accommodate that need,” Menendez said.
Menendez said that Douglas Elliman is also getting a lot of requests to look at apartments in the more suburban nabes of Queens, such as Forest Hills and Bayside, as they are seen as safe places to plant roots and raise a new family.
If you want to stay in Manhattan, he recommends going north to Washington Heights and Inwood, where prices are lower but transportation is easily accessible.
Malin also praised LIC as a great place to live, specifically around the Queens Plaza area. Astoria, with its bountiful culture and beautiful waterfront park, is another good spot, he said.
“If they love the Manhattan market, the downtown neighborhoods below 23rd Street, east and west [are] going very well,” he said, adding that “anything along The High Line obviously has a huge draw.”
RentHop, a rental site that ranks apartment listings, recently released a report showing that the best deals are often in areas adjacent to what are typically the city’s hottest nabes.
Lawrence Zhou, a RentHop co-founder, explains: “Chelsea’s really expensive, but if you want to live in Hell’s Kitchen, you can save if you wanted to look at luxury high-rises.”
In addition, while Gramercy is pricey, better deals are available in nearby Murray Hill and Kips Bay, and they’re in walking distance.
Schuss agreed that the quieter nabes might have the best deals.
“The Financial District is offering reasonable one-, two-bedrooms, and better-amenity buildings,” he said.
Bedford-Stuyvesant is another hidden gem, he said.
“Developers are coming in and buying property there, and they’re still relatively affordable,” Schuss said of Bed-Stuy. “That area is really getting a boost from all the high demand and pushing out from the more desirable places in Brooklyn.”
New York City real estate activity spikes dramatically in the summer filling New Yorkers with the same nervous anticipation we used to feel in the months leading up to a new school year. This comparison begs the question, Are we doomed to stay on a school schedule forever? It would appear that, statistically speaking, the answer is yes.
Think about it. Every summer the city is flooded with fresh-faced 22-year-olds clutching shiny, brand-new diplomas. They come from the city’s top schools like Columbia and NYC, but they also roll into New York from every corner of the country. They’re the next generation of stars-to-be and they all need a place to live.
Families with young children follow this pattern in a much more obvious way. Parents don’t want to uproot their children in the middle of the school year, risking confusion, distress, or (gasp!) derailing Junior’s progress on the fast track to early acceptance at Harvard. Instead they will wait until summer at whatever cost necessary to ensure an easier transition for their little ones.
Newlyweds are yet another subset crowding the New York City real estate market in the summer. Wedding season lasts from June to September, which means the summer months are sure to see couples scrambling to find their first home together before they say, “I do.”
Sure, this is a pattern we’d all like to break. It’s no fun to be apartment hunting when demand outweighs supply and all your friends are hanging out in the Hamptons. But once you sign one summertime lease, it starts a cycle. These young professionals, families, and newlyweds will be apartment hunting during the summer months for years to come.
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