This page has been archived and commenting is disabled.

Manhattan Apartment Rental Rates Drop For Third Month In A Row

Tyler Durden's picture




 

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

Now this is interesting. Investors looking at real estate should be aware of two main things at the moment. Those two things relate to what is really driving this centrally planned, manufactured rebound in U.S. real estate. It’s really a tale of two distinct trends. In formerly hurting markets such as Arizona, Nevada and Florida, private equity investors have flooded into what is a now gigantically crowded to “buy-to-rent” trade. Meanwhile, in the prime markets such as New York City and San Francisco, we have seen the “money laundering trade,” where rich oligarchs move their often ill-gotten gains into trophy real estate assets abroad.

We have seen many signs all year that the first key pillar to the manufactured rise in housing was becoming strained, as rents continued to rise while incomes continued to fall. It doesn’t take a genius to realize that this can only last so long, and many of the early investors in “buy-to-rent” have already gotten out or are trying to.

As far as the second pillar, well at some point the oligarchs will have purchased enough homes in London and Manhattan and then what? Interestingly, the seemingly unstoppable rental market in Manhattan is showing signs of cracking. What this ultimately means is unknown, but it’s an interesting data point nonetheless.

From Bloomberg:

Manhattan apartment rents fell for a third month in November and the vacancy rate reached the highest in at least seven years, signs the market is weakening amid a spike in homebuying and the lure of leasing in Brooklyn.

 

The median monthly rent in Manhattan dropped 3 percent from a year earlier to $3,100, according to a report today by appraiserMiller Samuel Inc. and brokerageDouglas Elliman Real Estate. The vacancy rate climbed to 2.8 percent, the highest since the firms began tracking the data in August 2006.

 

“With the scare about rising mortgage rates, it poached a lot of demand from the rental market,”Jonathan Miller, president of New York-based Miller Samuel, said in an interview. “On top of that, what else is poaching demand from the Manhattan rental market is Brooklyn.”

 

Manhattan landlords agreed to offer concessions, such as a month’s free rent, on 7.2 percent of all new leases in November, up from 4.2 percent a year earlier.

 

The number of new agreements dropped 34 percent, the biggest decline since September 2011, suggesting that landlords opted to forgo large rent increases to entice existing tenants to stay put, Miller said.

 

Leasing costs for luxury apartments, the top 10 percent of the market by price, climbed 1.2 percent to a median of $8,500.

Well, at least the oligarchs are still flush.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 12/17/2013 - 00:09 | 4252951 ShortTheUS
ShortTheUS's picture

deBlasiObama has promised to tax productive New Yorkers into oblivion. I wouldn't be surprised if rents plummet even more.

Tue, 12/17/2013 - 01:01 | 4253029 wee-weed up
wee-weed up's picture

 

 

Yep, more Marxism for free-shit in exchange for votes!

The falling rents could definitely be a harbinger of the coming collapse!

I hope all the "producers" are smart enough to abandon NYC like the plague...

And then watch it rapidly descend into Detroit II.

Tue, 12/17/2013 - 02:17 | 4253145 Clowns on Acid
Clowns on Acid's picture

Prolly about 2 -2.5 years away....

Tue, 12/17/2013 - 02:55 | 4253198 walküre
walküre's picture

NY will never ever turn into Detroit. Not in a hundred years. You forget who owns and controls NY. Not the same crowd that ran Detroit into the ground is all I'm sayin'. Detroit's former mayor is in jail. Guiliani was suggested to run for Potus and Bloomberg can do no harm either.

Tue, 12/17/2013 - 03:32 | 4253247 wee-weed up
wee-weed up's picture

You obviously have no clue whatsoever about de Blasio.

Tue, 12/17/2013 - 08:01 | 4253441 augustusgloop
augustusgloop's picture

Walküre is correct. New York is the bosom of the empire. Just as bankers, plutocrats, & oligarchs have prospered under Obama, there is little likelihood that he bankers, attornies, hedgies, scions, and their ilk will feel any sort of meaningful squeeze in New York. They move from 5th Avenue to Salt Lake City? Boise? Some other stacker haven? Unlikely. 

Tue, 12/17/2013 - 08:18 | 4253468 RSloane
RSloane's picture

No they will not. However, they will scatter to less taxed environments that are out of the city's tax reach and commute or work from home. Most of them will keep their work space in NYC until it becomes, to them, too costly to remain there. Money equals mobility. DeBlasio will eventually crumble when he sees his tax revenues severely shrinking. In Detroit, the mayor did not. He's now in jail and the monied presence that fled has kept their fortunes.

Tue, 12/17/2013 - 09:34 | 4253605 I am more equal...
I am more equal than others's picture

 

 

 

The Dictionary of Real Estate Appraisal defines external obsolescence as: "An element of accrued depreciation; a defect, usually incurable, caused by negative influences outside a site."

Defective governance creates declining rents and increasing vacancy. 

Detroit meet New York City.  

Talk amongst yourselves. 

Tue, 12/17/2013 - 10:00 | 4253676 N2OJoe
N2OJoe's picture

You say "producers" as if wall st and giant banks "produce" anything...

Seeing as how they are the in-crowd, I don't see deBlasiObama hurting them much at all.

Tue, 12/17/2013 - 08:20 | 4253462 RSloane
RSloane's picture

DeBlasio has essentially declared war on his tax base to support the ever increasing number of people on welfare and disability. New York City is also the epicenter for Special Education classes which have a very high cost of per pupil expenditure [they have the largest number of special ed kids of any other city on the globe]. Of course taxes are going up. With that will come flight to the neighboring areas where we see housing prices steadily rising as gentrification is changing the very nature of old neighborhoods [this has changed violent crime rates in some areas]. Shifts in populations from displaced populations to the city and the shift of the tax base to the neighboring areas and beyond is eventually going to choke the life out of the city. It will take decades to reach Detroit level.

This has already happened in some other notable cities like Scranton whose motto was "Pennsylvania's Progressive City". Literally, one morning the progressive mayor got up and announced to all city workers that they would immediately be on minimum wage because there was no money left for anything nor anyone. The tax base, except for the city workers, had all flown.  

Tue, 12/17/2013 - 10:33 | 4253803 Hippocratic Oaf
Hippocratic Oaf's picture

I've posted before that chasing a zip code is no longer a priority in mine and my families life.

We left NYC in June and never looked back. The gimmedats have taken over. I feel as if the city will decline over time, not to the degree of Detroit, but the cocaine and fun days of Giuliani are history and the midget cleaned it up and sanitized it and built all the bike lanes for the next generation of welfare rats. Headed back to the 70's me thinks.

After 15 years, fuck NYC.

Tue, 12/17/2013 - 18:17 | 4255232 artless
artless's picture

I live in NYC. As far as I'm concerned about the 70's coming back BRING IT. NYC has become a disney inspired sanitized playground for the uber rich and euro trash who can collectively all go fuck themsleves as they and about 4 million folks leave the sooner the better. Then perhaps NYC might be slightly liveable.

But in reality nothing like this will happen. NYC has rent control. Over time prices NEVER go down. It's kinda like that FED thing people talk about an them boys PLANNING inflation as atheir method. Besides NYC is still a formidible financial hub. The banksters are the source for all the criminal class statist pols like DeBlasio. The middle will get raped as always. The uber wealthy will role on and the Free Shit Army will get more free shit.

Oh, and by the way, thye cocaine and fun days of Guiliani are what began this whole mess so he and his liitle facsist prick ploce state tool Ray Kelly can leave as well. Perhaps that will save the lives of at least a few UNARMED black youths that the NYPD seem to have a penchant for murdering.

 

Tue, 12/17/2013 - 05:08 | 4253313 the0ther
the0ther's picture

"Producers" that's a good one lol.

Tue, 12/17/2013 - 09:03 | 4253528 Papasmurf
Papasmurf's picture

"Producers" that's a good one lol.

Not in NYC, that's for sure.

Tue, 12/17/2013 - 09:41 | 4253619 yogibear
yogibear's picture

New York, San Francisco, Chicago and other cities  have been abusing their citizens by the continued increase in cost. People are responding by fleeing.

Nice thing about renting is you have no skin in the game. You can just pack up and leave. The landlords are stuck paying ever-increasing taxes and fees, to the point of bankruptcy.

Starve the beast by using a trailer instead of a permanent structure.

Tue, 12/17/2013 - 00:16 | 4252960 Larry Dallas
Larry Dallas's picture

This has has nothing to do with Mortgage rates and Brooklyn. In my opinion it's lack of financial services jobs and, perhaps Madison Ave.

Tue, 12/17/2013 - 00:23 | 4252969 Handful of Dust
Handful of Dust's picture

I drove over to see my daughter in North Austin area. I could not believe how many houses are up for sale. What's the scoop?

 

Tue, 12/17/2013 - 00:51 | 4253021 Skateboarder
Skateboarder's picture

Grandpas are either startin to kick the bucket or move. I've recently seen a surge of old folk sales in my area in Silicon Valley.

Tue, 12/17/2013 - 09:38 | 4253606 j0nx
j0nx's picture

I agree. The family and I are thinking of moving to Austin from the NoVa area and the amount of homes on the market there is staggering. Has made me rethink my decision to move there until more research is done. You can't even get a 2 bedroom condo in the NoVa area for the amount that a full fledged mini mansion would cost you out there with land. Something is indeed up.

Tue, 12/17/2013 - 00:43 | 4253006 Dazman
Dazman's picture

Probably just the time of year. NY'ers come south when it gets cold. Lower demand. 

Tue, 12/17/2013 - 01:23 | 4253072 Bobbyrib
Bobbyrib's picture

If anyone is ever interested in renting or buying an apartment in NY, what realty company do you work for?

Tue, 12/17/2013 - 02:01 | 4253109 Freddie
Freddie's picture

I don't work for any real estate company.  I did have some discussions about something once with a guy at Douglas Elliman mentioned in the article.  They seem to be very professional.   I am not sure what you are asking. 

The Yelp page on the company in Manhattan is not very favorable but who knows. 

http://www.yelp.com/biz/douglas-elliman-real-estate-corporate-new-york

Go to the bottom for other firms with good ratings like Cooper & Cooper, Lamatto, Braswell.

Tue, 12/17/2013 - 02:14 | 4253142 Clowns on Acid
Clowns on Acid's picture

There are a few "good" realtor companies, the strategic element is the actual realtor that you are working with.

Tue, 12/17/2013 - 09:02 | 4253533 Papasmurf
Papasmurf's picture

"Good realtor" is a contradiction of terms. 

Tue, 12/17/2013 - 09:52 | 4253667 Bobbyrib
Bobbyrib's picture

I was asking Dazman since he seems to think any decrease in rents was seasonal. My statement was really that that statement is such bullshit only a realtor could come up with it.

Tue, 12/17/2013 - 00:59 | 4253041 Kasperfx
Kasperfx's picture

 

IMHO all the rising rental rates hype was and still is nothing but smoke and mirrors, to get the suckers thinking all that need to do is buy a couple homes/condos and get a great return and become Donald trumps. LOL  I am a proud renter  in south fla and have spent the past 5 summers in NYC and always keep my eyes on the RE market to see what's new othe market just becouse i like to move a lot . i have and still do see a lot and i mean a lot maybe 75% of the same homes available as last year, 20% of them are not listed but the realtor tells us their still available usually at a 20/35% cheeper monthly then it was listed last year. Im also sure that the rental market is not tracable to get a solid statistics from as i know most of the listed prices is what the tracking is theirs a substantially  cheep fees being paid by the smart rentor, no one is dumb enough to pay what the homes listed as at least I'm not, every home/condo i rented i was easily  able to get the prices down at least 10% from listed buy simply asking  
Tue, 12/17/2013 - 01:05 | 4253053 Peter Pan
Peter Pan's picture

I get the feeling that banking and finance jobs are starting to shrink due to outsourcing overseas, automation and cash transactions slowly shrinking as well as cost cutting by banks which leads to branch closure.

At the end of the day it is interest rates and wage levels that prop up property values and rentals more thn anything else.

Spain of course was a little different in that during their boom decade their population increase was met with a 1 to 1 increase in the number of dwellings.

Tue, 12/17/2013 - 01:25 | 4253079 Bobbyrib
Bobbyrib's picture

I also think it is the lack of finance jobs. Hopefully that will mean there will be more bitter ex-financial employees if/when the public comes to their senses regarding the Fed, QE, and the actual state of the economy.

Tue, 12/17/2013 - 02:13 | 4253137 Clowns on Acid
Clowns on Acid's picture

All the data centers for the Exchanges and Inv banks are in NJ. Nobody wants to live in NYC and work in NJ. Investment banks are trying to move as many jobs as possible to NJ as the price per sq ft per employee is 50% less in NJ.

Manhattan is only maintaining rent levels because of the increasing sprawl of Chinatown, and foreign buyers / renters. Crooklyn is a whioe 'nother story.  

Tue, 12/17/2013 - 09:57 | 4253677 Bobbyrib
Bobbyrib's picture

That would mean vacant office space would be going up and the rent for that would be going down as well. The finance jobs and data centers seem to be centered in Jersey City. If/when the gentrification of Jersey City is completed the prices of Jersey City rents will start to be as ridiculous as Hoboken.

Tue, 12/17/2013 - 01:29 | 4253083 Douglasnew
Douglasnew's picture

Uncle Ben has just been re-rolling the printing presses. They'll fire them harder and faster first sign of trouble and you'll see this is just a hiccup.

Tue, 12/17/2013 - 02:26 | 4253162 Canoe Driver
Canoe Driver's picture

There are a lot of things governments can do to keep property values high, even when interest rates are already at a minimum. Wages are going nowhere, but we can still have the 50-year mortgage, which is coming, soon to be followed by the 100-year mortgage. This is inevitable, count on it.  In Australia, the government has gone balls out on keeping the property values climbing, even though wages are quite pathetic. One method is "negative-gearing," which is a tax deduction for losses on investment property. Another method is tax credits for home-buyers. Still another method is to remove all restrictions on foreign ownership of real estate. A Chinese owner of an Australian home need never set foot in Australia, for example. I am not even Australian, but I can tell you that homes there are not and have not been affordable at all for young Australian families, yet the bubble kept growing. Augmentation of bank collateral, bank capitalization, and bank balance sheets have taken over as priorities. Why? Because bankers finance the operation of the government too. 

The sheeple have been sold out.

And if they don't rise up against it, they clearly deserve it.

Tue, 12/17/2013 - 07:39 | 4253420 Big Johnson
Big Johnson's picture

I'm lost as to why govts have to mess with property values in the first place...Love that interest rate deduction in the US done under the guise of making housing affordable.... Wrong! it actually makes them less affordable because Mr. Market discounts this write off immediately with higher values.

Tue, 12/17/2013 - 07:58 | 4253436 sessinpo
sessinpo's picture

Big Johnson    "I'm lost as to why govts have to mess with property values in the first place.+

 

Comment:

If you are at a loss as to why govts get involved in anything, you may never get it.

The truth is, govts have no business getting involved with the majority of things but they do through force to gain and maintain their power over the citizens.  Through their manipulation, they distort the markets so that markets are not free, citizens are not free and extreme bubbles are created.

Tue, 12/17/2013 - 11:37 | 4253984 Big Johnson
Big Johnson's picture

Well said. Must consider all of this when entering the worm hole

Tue, 12/17/2013 - 09:11 | 4253545 Papasmurf
Papasmurf's picture

In Australia, the government has gone balls out on keeping the property values climbing, even though wages are quite pathetic.

The more that governments intefere in the marketplace the worse the ultimate reset is going to be. 

Tue, 12/17/2013 - 09:15 | 4253557 Never One Roach
Never One Roach's picture

Canoe is right. There are two new people in our library...both from Australia who say exactly that, "local Australians are priced out of the market...salaries very low..." and so on. The flood of money in China and the Middle East finds its way into RE in Canada, USA and Australia and pushes houses prices to the sky.

Tue, 12/17/2013 - 05:18 | 4253318 orangegeek
orangegeek's picture

The Demics

 

Oh yeah (whisper)
I'm getting pretty bored
And I want to get out
I'm getting pretty angry, Man
And it's no good to shout
Will I catch a bus
Or will I catch a train
I need out now baby
Cuz I'm going insane

I wanna go to New York City
Cuz they tell me it's the place to be
Ah I wanna go to New York City
I just know that it's the place for me

I'm getting pretty tired
Of going downtown
You know the same trip everyday
It's kinda bringing me down
Will I get out
Well I wonder how
I gotta get it movin' Man
I gotta move it right now

I wanna go to New York City
Cuz they tell me it's the place to be
Ah I wanna go to New York City
I just know that it's the place for me

I'm getting pretty tired
And I want to get out
I'm getting pretty angry, Man
And it's no good to shout
I'm getting fucking pissed off
You know I'm tired of going downtown
You know the same trip everyday
It's kinda bringing me down

I wanna go to New York City
Cuz they tell me it's the place to be
Ah I wanna go to New York City
I just know that it's the place for me

I wanna go to New York City
Cuz they tell me it's the place to be
Ah I wanna go to New York City
I just know that it's the place for me

Oh Yeah

Tue, 12/17/2013 - 07:23 | 4253402 FormerTurbineGuy
FormerTurbineGuy's picture

We have a new mayor that is slightly to the right of Fidel Castro and they wonder why high end rental rates have topped? Ya think anyone with half a brain is in vamanos mode before said new mayor turns the clock back to almost Dinkens error law enforcement techniques that might make the city less safe? Do you think those with the income for said appartments will feel welcomed with a more wealth redistribution mentality?

IMHO the smart money has already left, this maybe an tangent warning sign....

Tue, 12/17/2013 - 10:03 | 4253703 Bobbyrib
Bobbyrib's picture

"Ya think anyone with half a brain is in vamanos mode before said new mayor turns the clock back to almost Dinkens error law enforcement techniques that might make the city less safe?"

So under Bloomberg the NYPD was allowed to be the gustapo, but under DeBlasio the city will be less safe? TPTB will never allow the city to become the craphole it once was until the collapse happens (at which time they will have no control whatsoever).

Tue, 12/17/2013 - 08:11 | 4253457 Stanley Lord
Stanley Lord's picture

Banking jobs in NY are declining rapidly and law firms are not expanding but beginning to decline also.

Tue, 12/17/2013 - 09:59 | 4253692 Bobbyrib
Bobbyrib's picture

You would think that it is the restructuring of the US economy, but really it is the financial firms feeding off of the Fed's teat and not needing as many employees to make earnings. The law firms are not needed since the Justice Department under Obama turns a blind eye or gives "slap on the wrist fines" to the bankers. The lawyers who voted for Obama can now enjoy the slow consolidation that is their industry.

Tue, 12/17/2013 - 10:32 | 4253797 MarcusLCrassus
MarcusLCrassus's picture

Amazing.  Its almost as if rental rates are affected by seasonality. 

Tue, 12/17/2013 - 11:13 | 4253932 jballz
jballz's picture

 

 

 

no fuckin taper ever! But the collapse of Manhattan rentals!

Buy BUY BUY bitchez!

Thu, 01/23/2014 - 15:40 | 4254449 Kasperfx
Kasperfx's picture

Just look at the places between the prices of $3000/6000 for rent on craigs list, thirs now  7 to 10 pages each day with around 75 listing per page each day. granted theirs multiple realtors listing the same places  this is a huge amound of invetory and this is just on CR. south fla seems to be even biger and asking prices are crazy, you have 4/3 3000sf homes with small lots being listed for 3/4k it's crazy 

Do NOT follow this link or you will be banned from the site!