The economic crisis has opened up opportunities for apartment tenants. The inventory of vacant apartments is expanding, and rents are dropping quickly in major metros across the country.
For renters with leases about to expire, it’s time to negotiate. Landlords are working extra hard these days to keep units filled.
The New York metro area, including New York City and its New York and northern New Jersey suburbs, saw a 3.7% drop-off in effective rents in the fourth quarter (compared with a 0.5% increase in the fourth quarter of 2007), according to Axiometrics, which surveys landlords across the nation once a month.
The situation has changed dramatically in the expensive Manhattan market, where tenants are suddenly in control. The layoffs on Wall Street have forced landlords to cut rents; offer one, two, or even three months’ free rent; and pay the broker fee that the tenant would otherwise pay (often 12% of the annual rent).
Vacancies are rising most in the high-end doorman buildings, particularly in the Financial District, said Daniel Baum, chief operating officer for the Real Estate Group NY, a residential sales and rental brokerage firm. But rents are falling all across Manhattan, in all price categories, he said. Some landlords have dropped rents as much as 20% to lure tenants, he said.
“The luxury high-rise market, especially new construction, is the one taking the worst hit,” Baum said. “There’s a building offering three months’ free rent in the Financial District.”