Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By silveristhenew (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

More Troubling Signs For NYC Real Estate As Rent Concessions Soar

% of readers think this story is Fact. Add your two cents.


The October 2016 Douglas Elliman Real Estate Guide for Manhattan reveals some fairly startling hints about the “health” of NYC real estate.  For months we’ve been writing about the soaring capacity of luxury apartment buildings in New York City and it looks as though that capacity influx is starting to take a toll as the percentage of rental inventory offering landlord concessions soared to 23.9% in October, more than double the 10.4% recorded last October.

The market continues to be softest at the top.  Luxury median sales price declined 10.9% to $7,792 over the same period and the largest decline in more than 4 years.  The market share for landlord concessions more than doubled to 23.9% from the same period last year to the highest share in 6 years this metric has been tracked.  As a result, net effective median rent fell 1% to $3,322 from the same period last year.  Days on market, the number of days from the original list date to the lease date, expanded by 6 days to an average of 46 days.  Listing discount, the percentage from the original list price to the rental price, rose to 3.1% rom 2.3% in the same month a year ago.

The percent of rental inventory granting landlord concessions has surged in recent months as building owners attempt to fill new apartment capacity.  As Bloomberg points out, with several buildings still under construction, the surge in new high-end capacity shows no signs of abating at any point in the new future.

Lease-signing sweeteners, such as a month of free rent or payment of broker fees, were offered on 24 percent of new rental agreements in October, up from 10 percent a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest share for any month since the firms began tracking the data six years ago. Landlords also agreed to cut an average of 3.1 percent from their asking rents in order to reach a deal.

Property owners in Manhattan are working harder to lure tenants who now have the ability to bargain-shop amid a surge of high-end apartment construction that shows no signs of abating. The final months of the year are considered to be the slowest time for apartment leasing in New York City, adding to the urgency for landlords, said Jonathan Miller, president of Miller Samuel.

“Concessions are one way to keep the vacancy rate in check and keep the buildings as full as possible,” Miller said in an interview. “It’s a baseline metric we’re going to be dealing with for the next several years, at least.”

Meanwhile, it’s not just new capacity that’s putting pressure on rental prices and concessions.  As the following chart highlights, new leases signed in recent months have also been falling with October new leases down 3.9% YoY and nearly 23% sequentially. 

Rental days on the market also increased by 15% YoY to 46 days while listing discounts increased 80 bps to 3.1% of the original listing price.

Finally, listing inventory in Manhattan is up nearly 23% YoY while Jonathan Miller, President of New York City appraiser Miller Samuel, warned “This is probably not a temporary blip.”

“There must be great concern because of how much competition has been added to the market over the last couple of years,” Miller said. “This is probably not a temporary blip.”

For Manhattan apartments, the median rent rose 0.3 percent from a year earlier to $3,400 a month, Miller Samuel and Douglas Elliman said. But when factoring in the value of concessions, the median actually declined by 1 percent.

“Incentives remain the preferred alternative for owners to keep face rents high while creating a sense of value in the marketplace,” Gary Malin, president of brokerage Citi Habitats, said in a separate report on the rental market Thursday.

The fancier and more costly the apartment, the more landlords had to offer enticements. In Manhattan buildings with doormen, 31 percent of new leases last month came with incentives, Miller Samuel and Douglas Elliman said. In buildings without lobby attendants, sweeteners were given on 17 percent of new agreements.

With trends like this, Jimmy McMillan may be able to retire soon.


Source: http://silveristhenew.com/2016/11/10/more-troubling-signs-for-nyc-real-estate-as-rent-concessions-soar/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.