Months of free rent! No broker’s fees! Reduced monthly rent! Last year, Manhattan was a renter’s paradise. But the market has shifted, and today, renters are no longer running the show.
“It’s a complete 180 from a year ago,” says Gary Malin, CEO of the real estate firm CitiHabitats. “You’re seeing bidding wars on rental properties that you didn’t see a year ago. And there’s a general sense of how difficult and tight this market is.”
This year, there’s a growing number of renters competing for a dwindling number of apartments. The vacancy rate stands at 0.88 percent, the lowest it’s been since August 2007. The number of available apartments is down 35 percent from a year ago.
Analysts and real estate insiders say new hires are helping drive the trend. New York City has added more than 70,000 jobs in 2010, whereas last year the city lost 125,000 jobs.
One of those new hires is Cong To, 27. Moving from Philadelphia, he started his apartment search by sending more than two dozen e-mails to brokers and landlords. He knew apartment hunting in New York would be tough. Nevertheless, he felt discouraged after those brokers and landlords started replying to his e-mails—or didn't reply at all.
“I’ll reply to their e-mail listing, and I’ll ask them is it still available and they’ll say ‘No, it’s not.’ Or, they won’t reply at all, which means it’s not available,” he says with a laugh.
To eventually found a broker to show him studios and one-bedrooms in Gramercy and the East Village. The first place he saw had beautiful hardwood floors, built-in air conditioning, even a separate kitchen. To was enamored with the rental.
To’s broker, Michael Ajisafe reminded his client to be decisive. Recently, 11 of his clients lost apartments because they waited to apply.
“Whatever is out there that comes out, it goes like in seconds,” Ajisafe says. “It’s very tight. I mean, you look at an apartment and there could be three applications on it already.”
After seeing that studio, To made what turned out to be a costly mistake: He went to look at a second apartment. While it seemed inconsequential at the time, waiting 25 extra minutes to fill out his application gave someone time to apply before him, and he lost the studio.
While new hires account, in part, for the tightening market, analysts also point to the fact that certain sectors of New York's economy are improving and that helps overall confidence.
“I just think that people feel better than they did a year ago right now,” says Malin of CitiHabitats. “People feel that although the economy is not perfect, it's not as broken as it was. Whereas a year ago everyone thought the Earth was going to fall off its axis.”
A strong Manhattan rental market is good news for New York's economy, but bad news for renters like Cong To.
The era of the renter's market is over.