- The rental market in New York is a nightmare right now, more than usual.
- After plunging during the first days of the pandemic, it is heating up with rising demand and rising prices.
- The competition is fierce, with open houses of 80 people and callous brokers.
All Lisa Rennau wanted in her New York apartment was a window.
The 23-year-old planned to spend long hours at her desk to complete a master’s degree in business and economics at NYU – something easier to do with the sun.
In August, she created accounts on StreetEasy and Zillow, joined Facebook groups, and contacted real estate agents, hoping to find a shared, glazed apartment within walking distance of campus for $ 1,000 to $ 1,200 per month. – the same prices she saw in March, when she was accepted into the program.
The whole experience became a “wild ride,” she told Insider. As she recounts, brokers defended her for viewings, owners lied about the location of properties, and the ads featured deceptive images of apartments. Only 10% of the real estate agents she contacted ended up responding, she estimated.
“I’ve lived in Shanghai, Berlin and other big cities before, but I’ve never had such a hard time finding a place as here in New York,” she said.
She soon realized that she would also have to increase her budget, first by $ 200, then by $ 400. “I caught myself thinking last week, ‘It would be nice if I could find something for under $ 2,000 – but at this point it doesn’t matter.'”
Any New Yorker will tell you that finding an apartment is stressful, especially during the peak summer season. But after the pandemic plunged the city’s rental market and some young professionals got a taste of New York luxury by living on a pandemic discount, real estate rebounded. Workers returning to town trigger a wave of pent-up demands. Ads are few, brokers are unresponsive and prices are high as young professionals and students compete for a cushion in the concrete jungle.
A flurry of tenants
Last winter, the New York rental market had become every New Yorker’s dream.
In January, prices fell the most sharply on record – a whopping 15.5% in Manhattan and 8.6% in Brooklyn and Queens, per StreetEasy’s Rental report. The median asking rent in Manhattan was $ 2,750 – the lowest since March 2010, when rents fell during The Great
Such COVID pressures have allowed city dwellers to lock down fully-equipped buildings in prime locations with $ 1,000 discounts and concessions. Young professionals in particular have seen luxury apartments finally fit within their budget.
This rare window of opportunity began to close after the city reopened in May and residents who had fled began to return.
Take July, for example: New leases in Manhattan are up 54.7% from July 2020, per Report by Douglas Elliman and Miller Samuel, which revealed that New Yorkers signed more new leases signed this month than in any other month of July since at least 2008. StreetEasy activity exceeds pre-pandemic levels: 59 % more visitors, 63% more views on rental ads and 76% more requests on rental ads compared to the same month in 2019.
Jay Parsons, vice president and deputy chief economist of RealPage real estate software company, told Insider that the recovery in demand is a sign that the market is correcting after last year’s activity.
âYou’ve had a lot of pent-up requests from people who have left temporarily or who were planning to move to the city at some point and put those plans on hold,â he said, citing college graduates at as an example. “It has always been a magnet for young adults.”
This is the case of Gaby Lagos, 23, who began her search for an apartment in mid-July after landing a job as a paralegal. For her, finding an apartment in such a bustling market was like a full-time job.
âI obsessively refreshed the StreetEasy app,â Lagos said. “I think my screen time on the phone has increased.”
She said it was frustrating to find herself as the fifth person in line to apply for a place that was just listed. Her search was made even more difficult by the fact that she is from Honduras and is in the United States on a work permit, with no United States-based guarantor to help her sign the lease.
Demand fueled by Lagos and its peers has pushed rents up by around 70% from a few months ago, according to Ramzis Hadzki, broker at Compass.
âRents are currently higher than before COVID because there is no availability,â he said. “A two bedroom apartment in the East Village on Avenue B was rented for $ 3,895 [before the pandemic] and now it’s $ 4,495. ”
He also noted the brokerage fees, which were temporarily prohibited during the pandemic, are back to higher levels than before COVID.
Everyone makes up for lost time
The hustle and bustle also has a lot to do with the rental cycle. Tenants who signed a 12-month lease during the pandemic around this time last year but didn’t sign for longer are now seeing their rents go up, forcing them to pay or move out.
As Hadzki said, âIt has been very difficult because all the clients I rented from last year have to move out now and they want to help me find them another apartment at that price, but it’s is simply impossible. ”
Look no further than a viral July TikTok video that featured a $ 5,250 three-bedroom, two-bath listing in the East Village, which then had a rent increase of $ 1,500 “due to the huge interest” in the unit. Another Introduced a line of 80 people to visit a $ 2,950 two-bedroom unit in Chelsea.
Nancy Wu, a StreetEasy economist, recently told Insider’s Taylor Borden that homeowners are raising prices and removing discounts to make up for time and money lost during the pandemic lull. In August, New York City overtook San Francisco as the most expensive place to rent an apartment in the country.
RealPage data shows rent is still slightly cheaper than it was before the pandemic, although it only looks at professionally managed services and not walk-in services, much of the market in New York rental. As of March 2020, Parsons said, the segment’s average rent was $ 3,697, compared to the current average rent of $ 3,613.
Soaring prices are not up to the budgets of young professionals, forcing some to turn to their Plan B.
Jazmin Beltran, 28, left town last March to work in Los Angeles, but ended up living with his parents in Arizona when the pandemic struck. Now the communications manager has landed a new job in an office in Soho, but she’s been browsing StreetEasy since July and isn’t close to finding a spot for less than $ 2,500 in downtown Manhattan or Williamsburg.
The high prices, she said, could cause her to delay her plans unless she finds a deal when she visits the city in late September. âI really want to live on my own, so I can just wait for the ‘hot summer to vax’ hype months and consider moving during the colder or less desirable months,â she said.
Rentals in New York have rebounded faster than expected
Both Hadzki and Parsons noted that the New York rental market has recovered faster than expected.
âWe never bought into New York’s death theory, but it was a remarkable rebound for the city to see it come to life again,â Parsons said.
Rental markets in other cities are also heating up. A measure called real rental growth hit a record high in August at 18.5%, by RealPage data. And, while NYC lags behind other rental markets such as West Palm Beach and Phoenix, Parsons added, it’s significantly stronger than around this time last year, creating a sense of normalcy.
âThis is New York,â Parsons said. “A lot of people want to be in the city.”
He pointed out that although the New York market has been hit, it is not dead: the apartment vacancy rate in New York generally hovers around 3% and has not exceeded 6% for vacancy. the pandemic.
The current state of the rental market may not bode well for the finances of young professionals, but it is certainly good news for the city’s economy. Formerly the epicenter of the coronavirus in the spring, New York was hit hard last year as its wealthiest residents fled and local businesses shut down temporarily and permanently. A thriving real estate scene is putting much needed money back into the economy.
Rennau, the NYU graduate student, was able to find a month-to-month lease for $ 850 a month near campus. Only problem: it has no window.
“But hey, I’m in New York!” she said, adding that the move saves her time to save more money and find something better. As for that elusive window, it is still searching. “Nonetheless, my search definitely continues.”