We obviously spend a great deal of time surveying the market for Manhattan rental apartments here at the Luxury Rentals Manhattan blog -- the fact that this is the Luxury Rentals Manhattan blog might've been some indication of this. But while there's plenty of good news for NYC dwellers looking for a luxury rental in Manhattan, and we do our best to report it, the one topic we've kept coming back to over recent weeks and months is the decline (or not-decline) of the renter's market in Manhattan real estate. For the time being, we'd describe the renter's market as, if you'll pardon the real estate jargon, "still kind of happening, for the most part." But while prices are still fairly low on Manhattan rental listings, the perks that defined the renter's market at its peak -- from landlords paying fees to highly negotiable listing prices on rental apartments -- seem to be fading into the past. In the Wall Street Journal, Dawn Potapka delivers an obituary for the days of landlords gladly paying fees on Manhattan apartments. Let us bow our heads:
"At least three major Manhattan landlords have decided to stop paying broker's fees on some rental properties, signaling that many tenants need to brace themselves for extra expenses when apartment shopping," Potapka writes. "This is a shift from last year, when landlords—desperate to fill empty units—would cover the broker's fee, typically a month's rent. But with demand for rentals rising and vacancy rates falling, some of the city's biggest landlords have notified brokers that they will no longer pick up the fee. That, of course, means renters must pay up."
Just three landlords, right? Not so bad? Actually, it's a big deal, given that the landlords in question -- Ogden, Pan Am, and the Related Companies -- are responsible for thousands of Manhattan rental listings, including Luxury Rentals Manhattan favorites such as Tribeca Green, The Sagamore, The Sierra and 1 Union Square South. A quick trip to Luxury Rentals Manhattan's primer on No Fee Apartments will explain why having to pay broker's fees could prove unpopular with apartment-hunters, but it's really pretty easy to understand on its face -- landlords, desperate to clear inventory during the renter's market, paid real estate agents fees with pleasure. Thus the bumper crop of Manhattan no-fee rental listings over the last year or so. Now, less-desperate and more confident landlords are inclined to leave that payment to the renters. The fact that prices on NYC rentals are still quite low relative to their peak-year, uh, peak should mitigate the unpleasantness of this somewhat, but this -- along with declining vacancy rates -- may be the surest sign yet that the long renter's market in Manhattan real estate is on its way out. It was fun while it lasted, and it may last a bit longer, but considering that many of these mega-landlords are planning to stop paying broker's fees starting June 1, apartment hunters might be well-served to stop reading this blog post and start browsing Manhattan rental apartments. Like, right now.
