Tuesday, August 17, 2010

Lack of Rental Vacancies
If you have tried to rent at any point in the past year, you already know how difficult it is to find a vacant apartment. In the rare case an apartment does go on the market, it is ferociously attacked and is typically gone in a matter of days. This may seem odd, especially in the summer when there is usually a large influx of renters. In fact, if you follow rental trends for the past few years, the spring & summer is when most of the rental business heats up. However, this summer an odd number of wistful tenants are left empty handed. In fact, most tenants are choosing not to leave at the date of expiration of their lease – choosing instead to renew it, even if it means accepting a higher rent.

While this may not make sense at first, after some consideration there is concrete logical reasoning behind this odd new phenomenon. While the rental rates for this year remain low, mainly because of the lack of vacancies, rental rates for last year are extremely healthy. This is due to the fact that people who wanted to upgrade their apartment did so last year, when rental rates were low and there was a lot of diversity in the market.

Many New Yorkers simply wanted an upgrade when the rates were still low. After this wave of upgrades, people simply stopped moving out. They were content with their new homes and saw no reason to move when rental rates dropped a bit. As a result, there are a lot of content New Yorkers and very few vacancies.

There are, of course, numerous new developments springing up across the city, but for the most part they are all luxury buildings with $4,000+/mo rental rates. However, even if you can afford one does not mean you will get an apartment in one of these new developments. A savvy buyer will seize the opportunity to get an apartment as soon as one is available. Having a fastidious and competent broker who will not miss a potential rental opportunity is of course highly beneficial.

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