When approached by homeowners trying to navigate the hot rental market, Compass agent Carlos Aldena advises them to set rents 15 to 20 percent higher than they were before the plague.
“The homeowners have the ball on their court,” Aldena said. “They offer aggressive innovations and if this tenant says no, they know they can get it elsewhere.”
Since the rental discounts from the Cubid period expired, the tenants were left confused. Many who cannot afford steep ascents have migrated to other areas of the city when new tenants come to fill these vacancies.
It’s like a game of musical chairs.
“Most of them are moving,” said Robert Chata, an agent at Compass. “Very few are actually able to take on the full gross rent where it is today.”
New York’s median rent rose 19 percent year-on-year to $ 2,975, according to StreetEasy. Manhattan’s median rent jumped 36 percent to $ 3,800 while Brooklyn’s rent rose 17 percent to $ 2,800, both of the highest ever on StreetEasy records.
“In areas like the East Village, we’re seeing an increase in rent that we’ve never seen in the last decade,” said Living New York founder and CEO Devin Somek.
Many realtors said they had seen migration to the outer boroughs as well as to upper Manhattan.
The increase in demand transferred the power from the tenants to the property owners. Instead of giving relief to almost anyone looking to rent, homeowners now have the ability to be picky.
“Now, they say, ‘We want it all,'” said Brian Horrigan, professional development director at BOND New York. “There are opportunities for homeowners now to say, ‘We are adhering to our requirements.'”
So far, the tenants have not applied. Instead, the competition became tough.
In March, bidding wars accounted for one in five new lease signatures, and the average home spent 61 days in the market, down 9% from February and 39% year-on-year, according to a report by appraiser Miller Samuel for Douglas Aliman.
More inventory is expected to hit the market in the spring and summer, as many tenants have signed 16, 18 and 24-month leases and a stream of new New Yorkers are expected to join the manhunt for apartments.
Students, for example, who are absent from the market are expected to rent apartments with three bedrooms or more – a sector that experienced less interest during the epidemic.
“This three-bed market is the last to come back and I think we’re starting to see the pressure now,” said Josiah Hyatt, an associate broker at Keller Williams NYC and founder of the Skyward team. “It will probably take the new impetus of incoming students and these new graduates to bring this market back in full.”
The frustration from the rental market has pushed some potential tenants into the buyers market, which has its own bidding wars to offer.
“A lot of the calls were, ‘Well, hey, the rent is so high now. Why not take advantage of historically low interest rates? ‘”Said Alan Zapdinski, an agent at Keller Williams NYC.” We have seen a number of people who have just said,’ Why pay so much rent when I can pay the same, if not less, to purchase? ‘”
Still, some realtors say that renters on the verge of moving are not considering the full picture when it comes to realtor fees and other moving costs, which can reach five digits.
“Maybe at first they say, ‘Okay, okay, I’m not getting that pace of innovation, it’s such a jump, and such an increase, I’m just going to find something else,'” Blush said. “Then they will come back when they realize that if they go to the open market, they will probably spend more.”