During the final months of 2008, Upper West Side rents were high and there were a limited number of available apartments. Broker Rachel Erlich frequently saw owners tell prospective tenants with concerns to take it or leave it.
Erlich, with 18 years in the real estate industry, now sees a different environment for renters.
“Business is here if the owners are willing to give the right price,” said Erlich, who started Rachel Realty NYC five years ago, exclusively working with Upper West Side properties. “There are always deals to be done.”
New reports on the state of Manhattan’s real estate market show that overall rents dipped toward the end of 2009, when compared with the final quarter of 2008. On the West Side, the situation was slightly more nuanced. In that neighborhood, the average rent price shot up 4.5 percent since the final quarter of 2008, but the rental price per square foot decreased by 4.1 percent. There was a 3.9 percent decline in the number of West Side rentals during that time as well.
“There are too many apartments available,” Erlich said. “Studios, I haven’t seen so low [priced] in a long time.”
With a 2.17 percent vacancy rate on the West Side—one of the highest in Manhattan, according to a recent report by broker CitiHabitats—renters are gaining the upper hand in negotiations.
“Today, the owners are listening if a client likes the apartment,” Erlich said. “If they don’t like a couple of old things in the apartment, [the landlord] will change it.”
With owners making concessions and offering perks, such as footing the broker’s cost or offering a month’s rent free, average rent prices are actually lower than the reports say, according to Jonathan Miller, CEO of real estate appraiser Miller Samuel Inc.
“The rental indicators that we’re presenting are arguably conservative,” Miller said. “What has happened over the year is that concessions have been a bigger part of the process… If we factored that in, we’d see more rent falling more significantly than they are now.”
The best season for renters was the summer, because of an increase in inventory from the Upper West Side’s development boom. The new competition drove down prices and owners were willing to make deep concessions.
“You’re seeing less and less of that available in the winter,” said Stephen Kotler, executive vice president at Prudential Douglas Elliman. “As inventory has been absorbed the incentives have been more limited.”
Miller, the real estate appraiser, said the reports showed that prices in Manhattan are moving “sideways.” There won’t be an uptick in prices unless unemployment decreases and credit is eased, he argued.
“Best case scenario is moving sideways for the next two years—perhaps more—and some continuing price erosion,” Miller said. “However, I think that the worst is behind us.”
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