New York City’s Rental Market Bites Back

For a few months, it seemed that the tenants of New York City were finally getting revenge. After years of facing exorbitant corridor fees, questionable owners, and cutthroat competition for high-priced access slots, the pandemic changed the script. Suddenly, terrified landlords who couldn’t evict current tenants and lose others to suburban leakage began offering units at discounted prices with generous concessions. In some parts of the city, the change was short-lived.

Bidding wars, “best and final” auctions, unpredictable negotiations and heartbreak are once again a reality for applicants, at least for those hoping to land a unit in one of the city’s most desirable neighborhoods.

The changing dynamics occur when the rental market in general remains discounted. Median rental prices in Manhattan were down 18.5% year-on-year in April, according to the most recently available Elliman data; Brooklyn was down 16.2%, Queens down 13.1%. Those discounts helped drive the number of new signings to record levels.

But for some renters looking to move to trendy places, finding a new place to live has been difficult. One such prospective tenant, Bill, who had recently left the empty nest outside Chicago, fully knew the old rules when he and his wife tried to get a new apartment in the SoHo area. The couple traveled to New York in April to explore ten units, and after choosing one, they sent a security deposit and flew home in peace. A week later, the landlord returned the check to them. “They accepted a higher offer without giving us a chance to call,” says Bill, who asked to be identified only by his first name.

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In January, it had been a different reality, with a healthy selection in its price range and concessions like a month without rent. By spring, that had evaporated. After losing the first apartment, the couple sent a security deposit for another, only for the owner to sell the unit at the last minute. They tried again at a new location, the third time Bill at bat received a cashier’s check from the bank. The lease came back with significantly worse terms than agreed upon. The couple are now awaiting the co-op board’s approval of a fourth apartment that they hope will be a winner.

“These are new listings that hit the most sought-after type areas,” says Hal Gavzie, Douglas Elliman Real Estate’s chief leasing executive, of increasing competition. That includes Boerum Hill and Cobble Hill in Brooklyn, and the West Village, Meatpacking District, SoHo, and Tribeca in Manhattan. Broker fees are starting to make a comeback, with some homeowners even asking applicants to submit their latest and greatest offers above the advertised rental price, similar to what would be expected from a competitive home purchase.

In post-Covid New York, some listings are receiving multiple applications within 24 hours of hitting the market, sometimes even before the applicant has seen the apartment in person, says Christian Emanuel, real estate salesman at Brown Harris Stevens. In Brooklyn, that’s particularly true for larger apartments, as tenants seek more space than they could have before the pandemic.

“We are in a time of scarcity,” he says. “You go to StreetEasy and you type ‘Park Slope, any budget, three bedrooms, two bathrooms and a washer / dryer’ and you have eight listings.”

Deal hunters should target areas that are less attractive, such as the financial district, where there is excess inventory and landlords still offer significant concessions in an effort to generate interest. In those areas, prospective tenants still enjoy their taste of power, says Alexander Madrigal, a Compass agent, who submits multiple applications and tries to negotiate the highest possible discount. Madrigal lost a deal last week after an applicant found a landlord who offered four months of free rent. “A lot of this has to do with the simple fact of supply and demand,” he says.

Not so a couple miles north in Greenwich Village. Keyan Sanai, another Elliman agent, says he received so much interest in a three-bedroom unit on Carmine Street several weeks ago that he removed the ad and put it back up for sale the next day with a $ 500 increase in monthly rent. “We realized very quickly what we had,” he says. In another unit in the same building, he posted a rent at 4:30 p.m. one afternoon and at 8 p.m. had received more than 100 inquiries. The low prices of the winter months, says Elliman agent Jessica Levine, are a holdover.

“That was also last month, this month has totally changed,” says Levine, one of the company’s most productive agents. At a property he represents in the West Village, for example, some apartments rent for $ 9,000 per month, compared to $ 7,500 before Covid. “The building is in such demand that we are getting all-time highs,” he says.