The New York City real estate market is returning to its pre-pandemic pre-pandemic state, but anyone looking for an apartment to rent should prepare for a possible post-pandemic surprise. Bidding wars – a long-standing trouble for potential home buyers – are now being fought over rent, especially in the trendiest neighborhoods that are within walking distance of newly reopening office buildings.
“What we are seeing now is that certain areas – especially the areas below 34th Street on the West Side – are in demand and in demand for rent now,” says Hal Gawzi, executive director of rentals at Douglas Elliman. “We have seen rental bidding wars where multiple bids and requests have resulted in bids that are $ 100-750 over the listing price,” he added.
Average rental prices fell during the pandemic as many tenants fled the city, and it can take months to fully recover.
Mr Gavsey said it looks like a different market from years past because while corporations are slowly returning, there is still plenty of stock in areas like Midtown East and areas like Hell’s Kitchen. But he notes that rental prices in these areas will take a little longer to reach pre-COVID levels because “they are not fully back yet,” but prices in Lower Manhattan have begun to return to pre-pandemic levels.
The big frenzy is caused by residents who fled the city before the pandemic, but are now starting to leave their home life behind and want the best possible situation when they return to the city.
“The reason we are experiencing application wars is because young people want to live in the city center, and many of the areas where they are being recruited again are in the financial district,” said Kathy Taub, associate broker at Sotheby’s International. “This prompted a search for rent near office space. So far we have been more location independent in the rental market, and now we are back to location, location, location. “
Many of these workers are willing to pay hundreds of dollars more per month to get something in high-demand areas, which include Greenwich Village, the Upper West Side and parts of Brooklyn in addition to the financial district.
Jay Glaser, an associate broker for the Corcoran Group, listed two one-bedroom apartments in a five-story building on Horatio Street in the West Village in July for $ 4,150 a month. The one on the third floor overlooks the treetops and high ceilings. has been offered up to $ 4400and another block on the ground floor with three French doors opening 615 square feet surrounding private garden, complete with Japanese maple and climbing ivy, has been offered up to $ 5,000.
“We had a lot of people who said their offices were reopening, but given the speed of recovery, office reopening was accelerated,” said Mr Glazer. “They were obliged to come, and if someone started looking in May, two months will not be enough to buy an apartment, so there is an urgency.”
Recently, a one-bedroom rent on Jane Street in the West Village, on the third floor of a five-story building with an elevator, which was valued at $ 4,850 a month, was quickly raised and rented out for $ 5,200, said Michael Miaretsky, an agent at Sotheby’s. who was engaged in real estate.
In addition to its location, he said the apartment was particularly attractive due to a recent renovation that included new floors and a floor-to-ceiling glass door that separates the living room and bedroom.
Rachel Bernstein, who owned a Jane Street condo she bought in 2015, said she received inquiries from 60 potential tenants but never expected her to move as quickly as she did, or receive bids above the asking price. “I was surprised that people walked past the $ 5,000 threshold,” she said.
Ms Bernstein said that she briefly thought about selling the apartment, but did not want to give it up yet. She moved to a different lease in the West Village, where she said she had improved working conditions from home.
Rent wars are raging outside of New York, in places like New Jersey and beyond.
Santosh Gunasilen, 38, vice president of a software company, moved to Seattle from New York during the pandemic but decided to return to the East Coast in July.
He decided not to buy the house because of the madness in the sales market. But finding the perfect lease for his family was just as difficult.
He found a three-story home in a quiet area of Summit City, New Jersey. “I didn’t even look at it, but I think we went $ 250 more for a rent that was priced at $ 5,000 a month, but I lost it because other people came up with almost $ 6,000 a month for a two-year rent. … He eventually won another war, but ended up renting a four-bedroom house in Millburn Township for an asking price of $ 5,300 a month.
With more competition in the marketplace, Joseph Hamdan, chief broker at Coldwell Banker Reliable in Brooklyn, said the incentives offered for rent have all but disappeared. “Some companies used to contribute to relocation costs, other management companies offered a month or two of free rent, and they were significantly reduced,” he said. “Many concessions began to be eliminated during the Memorial Day weekend.”
Craig Hutkoff, co-founder of the TriBeCa Film Festival and real estate investor who has been in the business for over 40 years, says the market – especially in New York – is still adapting to what it means in terms of office workers. getting back to work. “We have entered the post-coronavirus phase; by September we may well reach employment levels north of 70 percent, ”he said.
He added that the rental market is not so much speculative as it is psychological, because people are not quite sure what will happen and are trying to hedge their rates. “We are talking about rent parity analysis: if you look at an apartment that costs $ 3,000 a month, you will calculate how much it will cost to buy it compared to rent, and even at higher rates, rent can be cheaper because there is an opportunity to leave, ”he added, saying that the new coronavirus variants also created internal uncertainty in the market.
But since the owners of many properties make the final decisions, not all higher rates end up winning.
Richard Rojas, a Compass broker, listed a June rent of a two-bedroom apartment on the top floor of a pre-war home in Carroll Gardens, Brooklyn, for $ 3,300 a month. “Once the listing was up and running, I knew it would move quickly because my inbox was full of requests,” he said. “There are a lot of townhouses in this area as well as condominiums, so when a one bedroom apartment with a den comes up, it becomes a hit.”
Mr. Rojas spent two noisy open house days in the apartment. “Everyone asked to apply, and I had suggestions from some that no one else saw,” including one for $ 3,600 from a California applicant. But in the end, despite the higher rates, the owners, who also live in the townhouse, decided to go with a well-prepared applicant who offered the asking price but was willing to pay a brokerage fee that was one month’s rent.
“The owners cared about the character and integrity of the tenant as they shared the space,” said Mr. Rojas.