The Manhattan real estate market is a volatile and complicated thing. Given that you're almost certainly at Luxury Rentals Manhattan because you're searching for a rental apartment in Manhattan, you already know about the "complicated" part. But the volatility of the NYC rental market is what makes Manhattan real estate such a fascinating thing. Well, that volatility and the volatility of NYC real estate market watchers, who tend to freak out about even the smallest bit of real estate news. The Wall Street Journal's recent report that Manhattan rents rose 0.9% in the first quarter of 2010 is one such bit of real estate news, but the freakout it has precipitated is not entirely uncalled for. The rise in Manhattan rental prices was the first such bump in NYC rents in five quarters, and has Curbed, among other websites, wondering if the long renter's market on Manhattan rental apartments is drawing to a close. So, is it?
The short answer, as it almost always is here at the Luxury Rentals Manhattan blog, is that we just don't know yet. But the shorter answer is that we wouldn't bet on the renter's market being toast just yet. The report notes that vacancy rates on New York City rental apartments held steady, and while that five-quarter slump in NYC real estate means that the stock of new Manhattan rental apartment listings is going to be fairly small, the minimal increases in supply (of NYC rental apartments) won't nudge prices up much without an increase in demand (for NYC rental apartments). And it's that last part that we really don't know about yet. The bump in NYC rental prices -- and, remember, it's just 0.9% -- could reflect landlords betting on improved consumer confidence, or trying to raise money to pay off construction costs, or any number of other things. The experts quoted in the Journal echo this assessment.
"[Reis Inc. research chief Victor Calanog] said that a 'slow recovery' was likely and that landlords shouldn't expect 'galloping rental growth' until the job market firms up, particularly because younger workers that are more likely to rent have borne the brunt of job losses," the Journal's Nick Timiraos writes. "Others warned that gains were fragile and that landlords could continue to offer concessions to fill units. 'Rent reductions are not over yet,' said Hessam Nadji, managing director at real-estate firm Marcus & Millichap. He said he didn't expect to see sustained rental growth until the second half of the year."
Of course, the Luxury Rentals Manhattan blog will be keeping an eye on the Manhattan rental market. It's our job. But let's not let the bump in apartment rental prices obscure the fact that this is still a pretty great time to be looking for a rental apartment in Manhattan. No renter's market lasts forever, of course, but this one should probably last a little bit longer.
