Is the Rental Market on Fire, or Just Warming Up in that Summer Sun?

Crains New York just came out with an article on the state of Manhattan Rentals* and its dropping inventory.  Dropping you say?  FREEFALLING? 

Perhaps the situation is not quite so alarming – after all, the gross change in market inventory is but 0.15%.  But when you consider it is a one month change from March (1.38%) to April (1.23%), you realize the net change in available inventory is 11% in only 30 days.  If you are looking for apartments at the moment, I recommend having all of your documents ready and a hearty mindset that you may not get tons of bonuses at signing.  As the article points out, there are fewer incentives like a ‘free month rents’ or rent flexibility in negotiation.

However, although there is relevancy of the dwindling freebies from landlords to current rental seekers, there may be a bit of sensationalist journalism going on here (perhaps there will be a theme in this blog of calling “shenanigans!” on market reports that fail to provide relevant data).  In this instance, we’re missing a check with seasonality (as I have discussed in this post).  What is not mentioned in the article is that vacancies drop every year heading into summer.  I think there may be a greater drop relative to most years, but we also had excess inventory beyond annual averages all last year as the market was wallowing at the bottom.

The most important thing is to set your expectations going into a search, and again, always ask someone knowledgable what to expect as you search by area, even within Manhattan. 

*data provided by our sister company, Citi-Habitats.

– Grant “Data Head” Braswell