Apr
30

New York City Rents continue to Climb

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According to an analysis of the rental market by Citi Habitats, the average rent in Manhattan is a mind-boggling $3418 a month, surpassing the all-time high set in 2007 during a booming economy.

Tenants are feeling resentful; already staggering from a year or more of rent increases.  Many feel trapped, because it is too costly to move or stay.  This could cause renters to shift their focus from renting to buying, but that may not be an option for some due to lack of down payment or credit issues.

According to Jonathan J Miller, president of the appraisal firm Miller Samuel, “When you see rents rising, it is usually reflective of a strong economy, but that is not the case now”.  Prices are being driven up by a tight credit market that forces people to stay in the rental market and limits new construction.

Some renters will opt pay more for less – a smaller apartment for less or the same rent they’re paying now.  Even so, moving expenses, broker fees and deposits can take even that option off the table.  Others are making the decision to share, even putting up temporary walls where allowed and sacrificing a living room.

Even the outer boroughs like Queens and Brooklyn are seeing spikes in the rental prices. 

Rental averages are up in every category, with one-bedrooms rising the most, by 6.5 percent over the past year, to $2,747, according to the Citi Habitats report. Studios rose 3.6 percent, to $1,953; two-bedrooms climbed by 6.1 percent, to $3,865; and three-bedrooms rose 4 percent, to $5,107.

There are some exclusions to the average rental price.  Since the majority of New York’s rental apartments in Manhattan are rent-regulated in some fashion, they are not included in the average.  Also, smaller landlords that do not use brokers   would not be included.  Renters could find that smaller landlords are more willing to negotiate because they would rather keep a happy tenant with a good payment track record, than to have a vacancy for an extended period of time.

There seem to be few options for renters until developers start to bring more new units to the market, or until another market crash to contain the out of control rents: 

  • Stay put and try to negotiate or suck it up
  • Get a roommate or two
  • Move to another rental, neighborhood or town
  • Buy

Based on New York Times article.

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