2013 NYC Rental Market Forum

[nycbl10]

After looking through some old NYC housing threads, it seems like things have changed a lot in the rental market since 2011. I was in the city last weekend with my SO and we looked at 1b rentals throughout different neighborhoods both on our own and with a broker. Old threads suggested that you could find a decent 1br for about $2600-2800. We found that it was more like $3100-$3500 for a no-broker or 2800-3200 with a broker. When you add in the broker fee it breaks about even. That number is certainly doable for us, but it means we will not be able to aggressively (i.e. double minimum) pay loans until after firm advance is paid back.

Anyway, has the NYC rental market really gone up that much recently? Or am I missing something?

[tfer2222]

After looking through some old NYC housing threads, it seems like things have changed a lot in the rental market since 2011. I was in the city last weekend with my SO and we looked at 1b rentals throughout different neighborhoods both on our own and with a broker. Old threads suggested that you could find a decent 1br for about $2600-2800. We found that it was more like $3100-$3500 for a no-broker or 2800-3200 with a broker. When you add in the broker fee it breaks about even. That number is certainly doable for us, but it means we will not be able to aggressively (i.e. double minimum) pay loans until after firm advance is paid back.

Anyway, has the NYC rental market really gone up that much recently? Or am I missing something?

interested in this as well.

[xcountryjunkie]

Generally speaking those numbers are accurate from my experience. There are definitely apartments below those price ranges, but you have to move very quickly on them because the market is quite hot. Follow StreetEasy like a hawk, act quickly, and don't feel forced into making a bad deal just because your moving day is coming up. Last minute deals are the norm in NYC. Personally, I wouldn't recommend using a broker, but I've had friends with success using them.

Happy to describe my specific apartment-hunting experience in a PM.

[JamMasterJ]

what neighborhoods are you looking in?

[funnyguy]

Short answer: Yes.

NYC RE is out of control. Period. There are a few good points of reference:

ny.curbed.com
streeteasy.com

I highly recommend dealing through a broker unless you know the area extremely well.

If you are trying to save $, avoid places like Williamsburg, East Village, etc. that have lots of cache. NYC RE prices track with a neighborhood's "hip factor" (we'll call it), and everyone in these neighborhoods is wealthy; even if they are unemployed, someone/something is paying the bill on their behalf.

Live in Hoboken, live on the Upper East Side (one bedroom apartments there are especially inexpensive because demand for small apartments is lower there). Harlem isn't so bad, but again, be careful. If you decide on an "edgy" neighborhood, before you settle, you ought to walk around the block at 2am and feel it out.

Just know that "cool" neighborhoods are going to cost you. If you're okay living in a 400s/f studio with no AC because you'd rather have a view of Washington Square Park, well, that's your choice.

Good luck.

[nycbl10]

UES, UWS, Chelsea, FiDi...want to be relatively close to the office for first year or two and then move out of the city after becoming familiar with work and NYC more generally.

[Helmholtz]

We found that it was more like $3100-$3500 for a no-broker or 2800-3200 with a broker. When you add in the broker fee it breaks about even.

These numbers seem to coincide with my experience.

[Hutz_and_Goodman]

These numbers are so crazy. Where I live I own a house with 15 year mortgage and my payments are $900 a month. I've owned it for a few years, so my payments are like 2/3 equity. Big law here pays about $120k. NYC pays $160k but rent will be an extra $25k per year over and above what I pay for my mortgage, without building any equity. But still thinking about going that direction. At least the scale for associate pay is off the charts in NYC for years 2-7 as compared to where I am.

[xcountryjunkie]

UES, UWS, Chelsea, FiDi...want to be relatively close to the office for first year or two and then move out of the city after becoming familiar with work and NYC more generally.

To save money go north. UES/UWS are your best bets out of that list. UWS by Columbia is nice and relatively cheap. UES over by first ave is also relatively cheap because the commute is harder.

[nycbl10]

"These numbers are so crazy. Where I live I own a house with 15 year mortgage and my payments are $900 a month. I've owned it for a few years, so my payments are like 2/3 equity. Big law here pays about $120k. NYC pays $160k but rent will be an extra $25k per year over and above what I pay for my mortgage, without building any equity. But still thinking about going that direction."


I agree with everything you are saying. But I just want to note that I did not start this thread to complain about the price of housing. I feel very luck to have gotten NYC biglaw and look forward to the opportunity. If housing is expensive, that is fine--I will still be able to pay my debt and live reasonably comfortably. Rather, I just wanted to gauge whether the price ranges I listed were accurate or whether I was missing something.

[funnyguy]

There are certainly perks that come with living in NY. For one, your commute costs $2.75 each way (Subway), or $2.25 each way (Path). Second, you have limitless entertainment options, and scores of opportunities to experience things that 99% of Americans never will.

I agree with above posters that the Upper East Side is going to save you a buck; but only to the extent that you are living in a small apartment. The commute has nothing to do with those prices; one bedroom are cheaper uptown because fewer singles/younger couples live there (no one is going to deny the lack of "fun" or "cool" places to go out on the UES/UWS when compared with the East Village, for instance). Therefore, there is significantly less demand for smaller apartments in those neighborhoods.

The only neighborhoods where prices reflect a "commute" dent are those located so far outside of Manhattan (think, Bay Ridge) that you might as well live in the burbs.

[Lubberlubber]

Interested in this as well.

Also, unique to my situation, someone who loves me very much has offered to make a largish down payment for me to buy an apartment instead of rent.

What's the buying market like in NY? Can a nice 1BR be gotten for around 1 mil? How about a 2BR (so I can rent out the other BR and maybe pay my mortgage with that) What are y'alls thoughts on buying (if you can) vs. renting in general? Is the market looking up still?

Thanks

[Hutz_and_Goodman]

"These numbers are so crazy. Where I live I own a house with 15 year mortgage and my payments are $900 a month. I've owned it for a few years, so my payments are like 2/3 equity. Big law here pays about $120k. NYC pays $160k but rent will be an extra $25k per year over and above what I pay for my mortgage, without building any equity. But still thinking about going that direction."


I agree with everything you are saying. But I just want to note that I did not start this thread to complain about the price of housing. I feel very luck to have gotten NYC biglaw and look forward to the opportunity. If housing is expensive, that is fine--I will still be able to pay my debt and live reasonably comfortably. Rather, I just wanted to gauge whether the price ranges I listed were accurate or whether I was missing something.

Just thinking out loud. If I were to live in NYC I would probably spend like $3500-3700 per month bc you are already spending so much it's worth the few extra hundred to live in a better area than UES in terms of bars/restaurants/fun.

[imchuckbass58]

Interested in this as well.

Also, unique to my situation, someone who loves me very much has offered to make a largish down payment for me to buy an apartment instead of rent.

What's the buying market like in NY? Can a nice 1BR be gotten for around 1 mil? How about a 2BR (so I can rent out the other BR and maybe pay my mortgage with that) What are y'alls thoughts on buying (if you can) vs. renting in general? Is the market looking up still?

Thanks

The condo market is very hot right now - inventory is very thin and prices are inflated 10-15% year-over-year as a result. You probably don't want to go co-op route because of board approval and restrictions on renting if you have to move.

Here's a report based on 1Q2013 to give you an idea - market has gone up more since then: http://www.millersamuel.com/files/2013/ ... Q_2013.pdf

The short answer as to whether you can get a 1BR for $1m is that it depends on your definition of nice. If by nice you mean doorman, elevator building, very close to the subway, stainless steel appliances, new finishes, etc., it's not going to happen in a prime area . If your definition of nice is more lax (e.g., no need for doorman, walkup ok, 5-10 minute walk to subway is ok), you could definitely make it happen. In between, it will depend.

I personally faced this same decision and would not advise buying (I ended up renting). The market is just too hot right now - for good apartments, there were situations where there were upwards of 7 bidders and the apartments went for 10% above ask. Especially with rates starting to rise it's not as financially advantageous vs. renting. Just an opinion - take it for what it's worth.

[imchuckbass58]

Just thinking out loud. If I were to live in NYC I would probably spend like $3500-3700 per month bc you are already spending so much it's worth the few extra hundred to live in a better area than UES in terms of bars/restaurants/fun.

It's personal preference, but for me, I'd think the opposite. You're probably only going to be out 2 nights per week (max) because of work. It takes 20 minutes to get downtown by subway or cab. I'd put up with that for several hundred dollars per month.

But, different folks different strokes.

[Lubberlubber]

Interested in this as well.

Also, unique to my situation, someone who loves me very much has offered to make a largish down payment for me to buy an apartment instead of rent.

What's the buying market like in NY? Can a nice 1BR be gotten for around 1 mil? How about a 2BR (so I can rent out the other BR and maybe pay my mortgage with that) What are y'alls thoughts on buying (if you can) vs. renting in general? Is the market looking up still?

Thanks

The condo market is very hot right now - inventory is very thin and prices are inflated 10-15% year-over-year as a result. You probably don't want to go co-op route because of board approval and restrictions on renting if you have to move.

Here's a report based on 1Q2013 to give you an idea - market has gone up more since then: http://www.millersamuel.com/files/2013/ ... Q_2013.pdf

The short answer as to whether you can get a 1BR for $1m is that it depends on your definition of nice. If by nice you mean doorman, elevator building, very close to the subway, stainless steel appliances, new finishes, etc., it's not going to happen in a prime area . If your definition of nice is more lax (e.g., no need for doorman, walkup ok, 5-10 minute walk to subway is ok), you could definitely make it happen. In between, it will depend.

I personally faced this same decision and would not advise buying (I ended up renting). The market is just too hot right now - for good apartments, there were situations where there were upwards of 7 bidders and the apartments went for 10% above ask. Especially with rates starting to rise it's not as financially advantageous vs. renting. Just an opinion - take it for what it's worth.

Jeez.

Appreciate the help. You see any cooling down of the market in the near future? I'd just really hate to throw away 40K/year on rent when that could go into literally anything else.

As far as the areas, I do mean nice as in doorman, new finishes, etc., but I wouldn't mind renovating myself, and I don't really mind the area, as long as it's not Harlem.

I'll keep scoping out the market to see what it looks like when I graduate. Again, appreciate the help.

[imchuckbass58]

Jeez.

Appreciate the help. You see any cooling down of the market in the near future? I'd just really hate to throw away 40K/year on rent when that could go into literally anything else.

As far as the areas, I do mean nice as in doorman, new finishes, etc., but I wouldn't mind renovating myself, and I don't really mind the area, as long as it's not Harlem.

I'll keep scoping out the market to see what it looks like when I graduate. Again, appreciate the help.

Ha - I wish I knew what the market is going to do. My feeling is it has to cool down eventually, either when rates go up or when more inventory starts coming on the market, but when that will be, I have no idea.

If you want to take a look yourself, streeteasy is pretty good way to access most NYC listings. It's free unless you want advanced features like comparable sales data, etc: http://streeteasy.com/

Also, I totally get the idea that you don't want to throw money away on rent, but renting for one year doesn't preclude you from buying later. If you rent for a year, you'll know the city better, have a better idea of whether you want to stay long-term (a must, if you're buying - it's not worth it if you plan on moving out in less than 6-7 years), and hopefully the market will be more stable then. Sure, you spent $40k on rent, but when you're talking about $1m apartments, you could easily save that by buying in a stable market versus a hot market.

[jitsrenzo]

It seems like padmapper has so many more listings than streeteasy, or maybe I'm just looking at a few neighborhoods. Is that true? I can't find anything I want with streeteasy

[Anonymous User]

What's the best place to look for Jersey City/Hoboken apartments?

[Anonymous User]

What's the best place to look for Jersey City/Hoboken apartments?

If you are commuting to NY from Jersey City, you want to be in either the Exchange Place, Newport, or Grove Street areas. Don't really know much about Hoboken.

[5ky]

It seems like padmapper has so many more listings than streeteasy, or maybe I'm just looking at a few neighborhoods. Is that true? I can't find anything I want with streeteasy

What neighborhoods and price range are you looking at? Have you made sure to hit the 'show all' button for the map? If you don't, it only shows you a few on the map.

[jitsrenzo]

Places under $3000 in Midtown East / Sutton Place. Padmapper just had a lot more results in the specific part of Midtown East I was interested in in that price range.

It seems like padmapper has so many more listings than streeteasy, or maybe I'm just looking at a few neighborhoods. Is that true? I can't find anything I want with streeteasy

What neighborhoods and price range are you looking at? Have you made sure to hit the 'show all' button for the map? If you don't, it only shows you a few on the map.

[quakeroats]

Just thinking out loud. If I were to live in NYC I would probably spend like $3500-3700 per month bc you are already spending so much it's worth the few extra hundred to live in a better area than UES in terms of bars/restaurants/fun.

It's personal preference, but for me, I'd think the opposite. You're probably only going to be out 2 nights per week (max) because of work. It takes 20 minutes to get downtown by subway or cab. I'd put up with that for several hundred dollars per month.

But, different folks different strokes.

If you work a lot, this really is the correct answer. Having a commute time under 10 minutes 6 days a week makes up for the day or two you have to burn an extra 20 minutes to get elsewhere. Unless you value a neighborhood you'll rarely see over time and money, live as close as you can to work.

[Lubberlubber]

Ha - I wish I knew what the market is going to do. My feeling is it has to cool down eventually, either when rates go up or when more inventory starts coming on the market, but when that will be, I have no idea.

If you want to take a look yourself, streeteasy is pretty good way to access most NYC listings. It's free unless you want advanced features like comparable sales data, etc: http://streeteasy.com/

Also, I totally get the idea that you don't want to throw money away on rent, but renting for one year doesn't preclude you from buying later. If you rent for a year, you'll know the city better, have a better idea of whether you want to stay long-term (a must, if you're buying - it's not worth it if you plan on moving out in less than 6-7 years), and hopefully the market will be more stable then. Sure, you spent $40k on rent, but when you're talking about $1m apartments, you could easily save that by buying in a stable market versus a hot market.

Great point on the last paragraph.

I see a bunch of great buildings on here for under/around $1m, but what didn't occur to me is that the "luxury" buildings will also have maintenance fees in the thousands. Guess that's also a consideration, if you're paying a mortgage IN ADDITION to a $3,000 maintenance fee (which comes out to like $5000/month).

Well, I'll keep playing around with this and see what I find.

[Ixiion]

Ha - I wish I knew what the market is going to do. My feeling is it has to cool down eventually, either when rates go up or when more inventory starts coming on the market, but when that will be, I have no idea.

If you want to take a look yourself, streeteasy is pretty good way to access most NYC listings. It's free unless you want advanced features like comparable sales data, etc: http://streeteasy.com/

Also, I totally get the idea that you don't want to throw money away on rent, but renting for one year doesn't preclude you from buying later. If you rent for a year, you'll know the city better, have a better idea of whether you want to stay long-term (a must, if you're buying - it's not worth it if you plan on moving out in less than 6-7 years), and hopefully the market will be more stable then. Sure, you spent $40k on rent, but when you're talking about $1m apartments, you could easily save that by buying in a stable market versus a hot market.

Great point on the last paragraph.

I see a bunch of great buildings on here for under/around $1m, but what didn't occur to me is that the "luxury" buildings will also have maintenance fees in the thousands. Guess that's also a consideration, if you're paying a mortgage IN ADDITION to a $3,000 maintenance fee (which comes out to like $5000/month).

Well, I'll keep playing around with this and see what I find.

Just one suggestion. I live in NY so I've dealt with the whole rent/buy debate as well. If you're looking to buy, I'd suggest waiting a little (if you can) until after hurricane season is over (Nov). If a hurricane hits NY for the third time in three years (which, according to analysts, is a decent possibility this year), I imagine the market will either level off and stop going up or even decrease a little. People are still unsure of whether the last 2 years were merely anomalies or becoming part of the norm. Since NY's buildings/homes are not built to "hurricane codes", like other hurricane prone states are, prices for non-code houses/apartments in zones A & B & maybe even C will likely drop if people think hurricanes are becoming part of the norm.

Kind of morbid, I know. But I noticed on Long Island that some prices in said zones went down after Sandy, then back up after everyone forgot about it. If another one hits, there's a decent chance prices will drop again. Maybe. Rent wouldn't drop though, likely it'd just be selling prices.