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The Lab
The Economy Is Tanking? Real Estate Is Plunging? Tell That To Aspiring Manhattan Renters
Annual Spring apartment hunt reveals higher rents, steady demand
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The Lab
It’s on again: the spring hunt for Manhattan apartments, and, according to the numbers, this season should be as grim for new tenants as the last one. A new report shows average monthly rents in many Manhattan neighborhoods, including perennial favorites the Upper West Side and the Upper East Side, virtually unchanged from the same period last year, despite the intervening economic worries.
The average monthly rent for an Upper West Side one-bedroom in a non-doorman building was $2,457 this May, according to the report from brokerage the Real Estate Group New York. In June of 2007, the average was $2,518—a pittance of a $61 change. On the Upper East Side, the one-bedroom, non-doorman average was $2,352 in May; it was $2,366 last June.
As this column has noted before, Manhattan rents (and those of much of brownstone Brooklyn) have remained very much the same since 2002. The rents went up as the city recovered from Sept. 11, and they’ve stayed up, with only minor fluctuations unnoticeable to the pocketbooks of many renters.
A big part of this stubborn rent stagnation is, of course, demand. Another report last week, from investment-sales brokerage Marcus & Millichap, put the vacancy rate for large, market-rate Manhattan apartment buildings at under 3 percent for the first quarter of 2008. It is not expected to rise above that percentage this year.
Why not? After all, conventional wisdom holds stubbornly that even the mighty Manhattan economy has begun an irreversible turn, joining the nation and the state in the prolonged doldrums. Not really: Four of the five boroughs in April had unemployment rates no higher than the nation’s 4.8 percent (the Bronx was the exception), and Manhattan’s, at 3.9 percent, was well under New York State’s as well. Plus, the imagined tens of thousands of layoffs in the financial services sector, that great driver of both commercial and residential real estate locally, have yet to materialize.
For all the bluster and fuss, the local economy remains on the precipice rather than over it. And that is why Manhattan rents haven’t dropped in any meaningful way in time for the spring rental season. The island’s doing just too damn well right now.
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Um, does someone fact check your stories? If the unit was $2,518/mo in 2007 and is now going for $2,457/mo in 2008, that's a decline in price. Moreover, that 'pittance' of $61 adds up to $732; not exactly a pittance for anyone given that inflation probably has eaten up at least that much in purchasing power in the last year for most folks who can afford a $2,500/mo apartment.
What has journalism come to? Why bother when the reporting is this bad?
In regards to the piece on "higher rents", consider that this paper was bought by a kid who's convict father bought him into Harvard with a major donation. Are we really expecting intellectual honesty here?
It takes real nerve to pretend that this is journalism. We have a headline saying rents are going up, with an article showing only evidence that they are dropping.
It is clear that the term "editorial independence" doesn't get used much at the Observer.
Iam a Broker with over 35 years in the Real Estate Experience and the firms quoted in this article do not remotely know what is going on in the rental market in NYC as they are not active brokers. The truth is there is a recession going on in NYC which has been here for about six months and owners and brokers are struggling mightily to fill the "hole" of tenants who are either losing their jobs or not being able to afford Manhattan rents now. The expenses have gone up so much for Owners in the last ten years leaving them with little choice to try to push the envelope with tenants. Unfortunately the tenants cant afford to pay what the owners need to make money and this is leaving us with a very soft/flat rental market at a time when rents should be rising. The "rental season" is from May to September 30th. each and every year and this year there are too many vacant apartments and so far with a flat hiring season not enough qualified tenants looking to rent in NYC.