April 22nd 2015
AM New York
The summer rental rush is coming.
If you want to rent a new apartment, experts suggest you do it now.
With the city’s unemployment rate falling to 6.5% in March and average hourly wages ticking up, that promising data suggest young adults could move out of their parents’ houses and renters might look to relocate, said to Eric Mendelsohn, an associate broker at Warburg Realty.
“That’s going to create some downward pressure on vacancy rates,” he said, adding that vacancy rates fell to 1.1% in the last two Julys.
Limited inventory drives up prices every summer, said Mendelsohn. And they’re already rising this year, according to real estate group MNS. The average rent in Manhattan rose 1.71% between February and March, hitting $3,966. In Brooklyn, rent increased .38% over that span.
Nevertheless, limited space and ballooning prices haven’t stopped New Yorkers from renting.
Seventy percent of the city’s residents are renters, according to Jeff Segal, founder of the no-broker site PadSpin. They vie for roughly 10,000 rental units available per borough per month. The competition heats up during the summer, as 65% of renters who will move this year will do so between June and August, Segal said.
“It’s becoming such a nightmare,” he added. “If you know you’re definitely trying to find a place, lock in a place now. You don’t want to subject yourself to the summer market.”
At the same, said Gary Malin, president of the real estate group Citi Habitats, the low vacancy rates, while not ideal, are also nothing new.
“The reality is the rental market always has its ebbs and flows,” Malin said, adding that it typically cools down along with the weather.
Malin suggested studying the market and to be willing to look outside of Manhattan. Queens Plaza in Long Island City is a transit hub and a short commute to Midtown and the Upper East Side, for example.
Mendelsohn added that more new rentals will hit the market this year than any since its peak in 2009. Micro apartments are coming to Kips Bay, and new rentals are sprouting at 70 Pine St. in the Financial District. Brooklyn will have more than double the new rental inventory this year than it had in 2014, Mendelsohn said.
But, “a few thousand properties aren’t going to solve it all,” Segal countered.
He agreed with Malin that the outer boroughs offer the sweet spot, particularly since many renters will look toward Manhattan this summer.
“In the last few years, people retreated to the other boroughs,” Segal explained. “Now they see an opportunity, now that they’re making more money, to move back to the city.”
TOP SPOTS FOR RENTERS
Here are the best nabes to look to rent in this spring, according to market experts:
Manhattan: Kips Bay, Financial District, Upper East Side, East Village
Queens: Long Island City, Astoria, Woodside, Jackson Heights, Sunnyside
Brooklyn: Crown Heights, Prospect Heights, Fort Greene, Greenpoint, Bushwick, Gowanus