NYC Apartment Agent

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Posts Tagged ‘The Wall Street Journal

Manhattan Vacancy Rate At Five-Year Low

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NYC Apartment Agent: Manhattan Rents Climb, Vacancies Drop

NYC Apartment Agent: Manhattan Rents Climb, Vacancies Drop

NEW YORK — If you think rental apartments are becoming scarce and more expensive, you’re right.

Nationwide, apartment vacancies dropped to a 5-year low last quarter to 5.6 percent, according to research firm Reis.

In Manhattan, it’s less than 1 percent.

Research also showed a corresponding rise in effective rents, or what tenants pay after landlord concessions are included, year over year in 81 out of the 82 metropolitan areas.

Bloomberg reported: “San Jose, California, led with 5.5 percent growth in effective rents from a year earlier, followed by San Francisco at 4.5 percent and New York at 3.7 percent, Reis said. Only Las Vegas experienced a decline in rents.”

Of course, that figure represents all five boroughs: Manhattan, Brooklyn, Queens, Staten Island and the Bronx.

In May, Manhattan saw rent increases of 9 percent for studios, 10 percent for one-bedrooms and 11 percent for two-bedroom apartments. July’s year-over-year increases were similar.

Forecasts of record-high rents earlier this year have largely been realized.

“There’s also concern more consumers will take on roommates to cut costs, something last seen following the financial crisis. Should that increase the vacancy rate, landlords could be forced to bring back profit-eroding freebies such as a month or two of free rent,” wrote The Wall Street Journal.

Those “freebies” include no-fee apartments, which means the landlord pays the 15 percent broker’s fee.

Such concessions are becoming increasingly rare since apartment vacancy rates hit a 22-year high — back in July 2009.

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Looking to Buy? Now Might Be the Time

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To buy or not to buy. That is the question.

To buy or not to buy. That is the question.

Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody’s Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer’s market: There were about 15 million vacant homes in the U.S. last year, according to John Burns Real Estate Consulting, Inc. — some 3.1 million more than normal. — “Why It’s Time To Buy,” The Wall Street Journal, June 4, 2011.

NEW YORK — To buy or not to buy.

That is the often the question, perhaps more so in a market characterized by soft demand and oversupply.

One figure stands out in the April 2011 price index accompanying the Wall Street Journal article cited above:

While overall home prices fell 7.5 percent in April from a year ago, just five states (and the District of Columbia) actually saw prices marginal gains up to 4.5 percent: Alaska, New York, North Dakota, Vermont and Mississippi.

As always, if you or someone you know is thinking of buying, selling or renting in New York City, please let me know.

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