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The City That Never Sleeps… Because It Can’t Afford To!

Remember a year ago, when landlords were dealing out “COVID discounts” and rents were lower than they had ever been, and you moved into Midtown Manhattan on a student budget?

Well, that’s over now.

More and more people are receiving rent renewal notices with increases over $800-$1,000 a month raising a dilemma – stay or look for a cheaper apartment elsewhere. Unfortunately, “cheap” is not really an option. Suddenly, living in the city dubbed “dead and likely to stay that way” not so very long ago is cool again. Those who left NYC when the pandemic shut down the city are moving back and the work from home culture continues to persist as new COVID variants kept knocking down every attempt to fully reopen post pandemic… and well, people started to like working from home, meaning people now want to move to bigger apartments. 

According to a report from Apartment list, driven by 37-year low in vacancy rates, rents have seen significant increases. The average rent in New York state was up 33% year over year in January 2022. 

Thought you would move to Jersey City to escape the rising rents? Think again. Rents in Jersey City have risen 46.6% since 2020. 

While the occupancy rates may be higher than ever, studies/surveys suggest that 60 percent of renters are planning to seek a different apartment or home within the next 6 months. This suggests that renters are not staying put as occupancy rates might suggest. Among the reasons for moving are more outdoor space, safer neighborhoods, increased space to work from home. So, if you’re also looking to move before the fall semester, don’t expect to save money. 

According to a report from the Real Deal, a 625 square foot apartment in Greenpoint, McCarran Park listed initially for $3,500. In 90 minutes and 18 showings, 6 had put in applications and 5 offered more than the asking rent. It eventually went for $3,800 “as is” with the new occupant telling the agent not to paint the apartment and offering to pay the broker’s fee. Bidding wars like these are becoming increasingly common in many parts of Manhattan and Brooklyn. According to a report from Douglas Elliman, the market share of rental bidding wars rose year over year from nominal cases to nearly one in five new lease signings!

In comparison, rents in the Bronx and Queens are rising at slower rates and in some cases, are also almost flat.

Generally, landlords will reach out to tenants about two months before a lease is set to expire to ask about their renewal plans. But now, according to some brokers, landlords are reaching out three to four months before lease expiration since there is so little inventory.

Spring is generally the time these listings surge, but this year the winter has also been hot for the rental market. One can only imagine what the rest of this year  is going to be like!

Photo credit: https://www.compass.com/neighborhood-guides/nyc/east-village/

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