High Rents Push More New Yorkers Into Buyers Market
The story of rent in Manhattan is an oft-told tale on New Construction Manhattan, but while most realtors agree that the rental market will remain strong, one firm predicted in a recent report that rents could rise by as much as 10% in 2012. And with rental inventory at 1.3% vacancy and landlords raising their prices, many New Yorkers, particularly younger ones who traditionally rent, have begun looking at apartments to buy.
The report, released by BOND New York, looked at leasing price data over the past four years and determined the market would likely increase in strength, pushing rent in New York City up between 8 and 10 percent. This information came out around the same time as a DNA Info article that quoted several realtors as saying they were seeing an abundance of buyers looking at cheaper “starter” apartments. Some realtors even said they’d seen bidding wars for apartments in areas that tend to be sleepy. Starter apartments in Chelsea, Kips Bay, and Gramercy aren’t seen as hot commodities, but in February they became ground zero for buyers trying to out-leverage one another.
The early winter months are known in real estate circles as the slowest time of the year, offering the market a lull before the hyperactive spring months where buyers are fervently searching for new apartments. But in 2012 there has been no such lull, according to many realtors, and the market for starter apartments has already jumped into high gear. Downtown Manhattan and the Upper West Side are particularly hot right now, according to brokers. Both neighborhoods are seeing their inventory of affordable apartments fly off the shelves.
The recovery of the housing market over the past year has been one of the dominant stories in real estate. And while the entire market has risen, it’s been buoyed by foreign investors and the super-rich buying $5 million condos, or homes that are even more expensive. Medium-end and affordable apartments—though they did better in Manhattan than in most other places in the United States—still lagged behind. But this increase in sales of starter homes could mean that the low end of the market is beginning to pick up on its own.