The Current State of NYC’s Rental Market
Why lines for apartment tours are so long and what to do.
A pre-Covid market: Summer Cycles vs. Winter Cycles
Prior to March 2020, the New York City rental market had been consistently on fire for well over a decade. While it is considered by some to be the greatest city in the world, NYC is also infamous for its exorbitant rental prices, high apartment demand, and quick apartment turnover. If you didn’t know NYC rentals moved fast, you quickly learn the hard way.
To get a full picture of where the rental market is headed, it’s first important to understand the difference between “The Summer Cycle” and “The Winter Cycle” when it comes renting an apartment. Historically, a majority of people moved during the summer months (April-August). During these months, designated by some as “The Summer Cycle”, renters typically faced higher competition, and therefore, higher apartment prices compared to those who moved during the winter. With a large portion of renters locked into 12 month leases, getting trapped into moving exclusively during “The Summer Cycle” was common, and those few renters who were able to get leases to end in Winter, often faced an easier rental experience year by year.
Summary:
Winter Cycle: Less demand, less competition, more bargaining power, less stress, better deals.
Summer Cycle: More demand, more competition, less bargaining power, more stress, worse deals.
The 2020 Covid market: A sharp decline in demand.
The Summer Cycles vs. Winter Cycle pattern was relatively consistent throughout the 2010s and up until 2020, when Covid-19 threw everything in NYC out of whack. On March 7th, 2020 then-governor Andrew Cuomo declared a state of emergency in NYC, and between March 16-22nd, a harsh set of restrictions hit the city, and put a ton of people’s plans on hold: NYC public schools closed, NYC bars and restaurants closed (except for delivery), and the NYS on Pause Program began, forcing all non-essential workers to stay home.
As NYC renters headed into Summer 2020, uncertainty was at an all time high, and unlike so many Summers prior, residents were not flocking to NYC. As many people know, NYC apartments are not typically known for their size, and when renters choose NYC rentals, a lot of times they are doing so not for the apartment itself, but rather for the neighborhoods and/or the NYC experience. With most aspects of social life shut down, work from home in full effect, and no end to Covid in sight, suddenly the standard, tiny NYC apartments were just not the rage anymore. Furthermore, real estate agents were then banned from showing apartments in person during these summer months. Rentals halted further, and the highlight of every New Yorker's day became clapping for Healthcare workers every night at 7pm. Apartment demand started to fall across the board.
To further exacerbate the decrease in demand, many recent graduates (who typically fuel the Summer Cycle) had their job offers rescinded or delayed, many employees transitioned to work from home full time, and many residents chose to head back to their parent’s house for more space. Leases were broken, demand continued to fall, and concessions were made by landlords to try to keep residents in their current apartments. Between March 2020 and March 2021, vacancies rose significantly, prices fell, and the renters who were brave enough to sign new NYC leases got big upgrades. With increased concessions offered by landlords (such as 4 months free in some cases), many renters got better deals than most would’ve imagined pre-pandemic. That fun didn’t last long.
The post peak-Covid market: Where are we now?
Those brave souls who signed their apartment leases during peak Covid got some awesome apartment value, as did those who renegotiated their current leases during 2020 or early 2021 to take advantage of Covid Deals.
In April of 2021, the market began to shift, as rumors of these great deals began to spread, and as Covid policies in NYC became more lax, allowing more NYC venues to reopen. During the summer of 2021, NYC started to feel like NYC again, and the NYC rental market quickly started to feel like the NYC rental market again. Restless renters who had been out of the City since 2020 wanted to get back, and curious renters, who had heard of awesome deals, wanted to try to capitalize on these deals before it was too late. Furthermore, people were increasingly starting new jobs and various employers began putting an end to work from home, further increasing the need for NYC apartments.
As demand continued to rise during mid to late 2021, landlords took notice and began reducing concessions across the board. Suddenly the “4 months free” Covid leases were no longer being offered upon lease renewal, and those who got great deals in 2020 were back out searching. More and more renters entered the market, and now prices are back, really back, even above Pre-Covid levels in some areas. According to The New York Post, the median asking rent in Manhattan is up 27% this month compared to last year and up 4% compared to pre-Covid levels, the data showed.
Even with prices increasing significantly across the board, demand has yet to slow down since mid 2021, and as anyone who has tried to rent an apartment in the last few months knows, the current NYC rental market is stressful to say the least. Read an example of a one renter's experience here.
That is where ApartmentsTogetherNYC comes in.
How Apartments Together NYC can help
There are many obstacles that renters may face when searching for an apartment in NYC, and when apartment demand is as high as it is now, these problems become increasingly more common. The process of moving is stressful in and of itself, and in NYC’s market, stress and confusion for renters seems to be the norm, especially for first time renters. ApartmentsTogetherNYC aims to address this problem.
Obstacles renters are facing right now and how we can help.
1. Lines for an apartment tour are out the door.
If you’ve recently attended an open house for an apartment rental, you may have had to wait in a long line. This is a result of both the increased apartment demand, as well as the calculated choice made by the real estate agent/broker who is advertising the listing.
Setting open houses for apartment tours is a common practice for a number of reasons:
1. It is most convenient for the real estate agent/broker. They set a designated time to be at the building and then simply let the interested renters come by during this time.
2. Open houses emphasize the demand for the unit. Seeing all the other renters in one place at one time adds a ton of pressure to move quickly, which is what the broker/agents want.
3. Having a long line forces renters to move through the unit quickly, and having a packed apartment makes asking the broker any important questions difficult. This makes doing your due diligence nearly impossible; if an apartment has issues, you’ll probably miss them. For the Broker, open houses are typically a win/win. For you, it’s usually hectic, disorienting and often a big waste of time.
How We Help
ApartmentsTogetherNYC offers a variety of services to help clients avoid these stressful situations, or at the very least, mitigate their effects. With our ABC Reports, we do the due diligence for you. Similar to a CarFax Report for cars, our ABC Reports provide our clients with a ton of relevant information about an apartment listing. In a lot of instances, this information may make or break your decision, such as severe building complaints or violations.
You can order an ABC Report before you see a listing, to avoid wasting time (Ex. An apartment that already has 3 applications on it and will probably be rented soon may not be worth your time to see OR an apartment building that has a noisy bar downstairs may not be worth your time).
You can also order a report after you see a listing, to make sure you didn’t miss anything during your tour. Noise complaints, pest infestations or landlord reputation may alter your opinion of an apartment and its value. ABC Reports provide relevant landlord information so you have an idea of what to expect once you move in. In some instances, our ABC Reports even help you avoid a broker’s fee altogether by letting you go directly to the landlord.
With our A&S Prep Service, and our Apartment Concierge Service, we help set our clients’ expectations early, weighing pros and cons and establishing our client’s top priorities, wants and needs. We then prepare our clients’ apartment applications BEFORE they go on apartment tours, giving clients a competitive advantage over other renters. Through our diligent preparation in making sure that our clients’ applications are organized, by offering our client’s our expertise and support throughout the entire application process, and by often scheduling a showing before other people can get in, we are able to make our clients’ apartment search go smoothly.
2. “The broker’s fee is too high”
The NYC rental market is quite a monster, and you’ll notice quickly how these problems all feed into each other. Typically, an increase in apartment demand allows a broker to charge higher fees (sometimes, renters will enter into bidding wars which include offering higher fees and this is why open houses are so attractive to brokers). Since broker fees can typically get as high as 15% of the yearly rent, knowing whether or not you have to pay a broker’s fee, or if there may be room for negotiation is incredibly valuable information.
How We Help
ApartmentsTogether offers several services to address this obstacle for renters. By offering ABC Reports for apartment listings clients find online, we help some clients avoid a broker’s fee altogether. By analyzing current market trends, we can set your expectations and arm you with the information you need regarding your potential apartment.
ApartmentsTogether also offers our clients Application & Search Preparation. With A&S Prep, we help our clients keep their search and applications organized so they can maintain a competitive advantage over other renters. With so many other renters competing for the apartments you want, being prepared and organized is essential, and will give you the leg up you need.
3. “The listing doesn’t look like the photos”
Bait and switch listings are all too common in today’s rental market. Oftentimes, clients will take time out of their busy days to view listings, only to find that the listing was already rented, or that the listing looks nothing like the photos posted online. With an emphasis on getting the maximum number of deals done, some agents may post fake listings in an attempt to get as many renters in the door as possible. This may be a good trick for them, but it is NOT good for renters whose time is valuable.
How We Help
ABC Reports are great for renters who are trying to avoid fake or inaccurate listings. With our team of rental experts, we can identify key indicators in ads, such as virtual staging, which may indicate a misrepresentation of actual apartment proportions.
Conclusion
The NYC rental market can be a scary place. Rentals definitely aren’t cheap, and to avoid a bad situation, renters should always be prepared and have expectations set. In the past, renters had to rely on themselves or buyer’s brokers to get an apartment. This often resulted in confusion and renters getting taken advantage of. By arming renters with all the information they need, without charging a brokers fee, we aim to change the way you rent in NYC. Learn more at www.ApartmentsTogetherNYC.com.
