Real Estate competition is heating up
If you think the perfect way to kick off summer is with a move to Manhattan, you might want to reconsider your plans.
For apartment hunters looking for a new place in the city, this spring and summer are set to be one of the biggest real estate rat races in recent memory, according to experts. Coming off an unusually mild winter that saw a higher flurry of activity than usual, rental prices have skyrocketed. They were 6.5% higher in February than the year before, according to real estate firm MNS. So now the warmer months - the real estate market's busiest time of the year - will have fewer apartments up for grabs and more renters fighting over slim pickings.
Now or never
Lauren Weitz thought that she had the perfect moving plan. Coming from Oceanside, Long Island, she would take the first few months of this year to look around and see what's out there. By April, she would have seen plenty of places and picked the best one, and by May, she'd be ready for a summer move to the city.
So her head was spinning when she was suddenly forced to whittle down what she expected to be a months long process into two weeks. She put down a deposit on a West 98th Street pad that she viewed that same day and made the move in the middle of March - two months sooner than she expected. It wasn't necessarily because this place was her dream home and she was sold the second she saw it. It was because if she had waited until May like she planned, the competition for apartments in Manhattan would be so fierce that her chances of scoring a place at all could have been dashed.
As her broker told her: In this market, it's either now or never.
A tight squeeze
Realty firm Citi Habitats projects that a total of only 2,230 new apartments will hit the Manhattan market in 2012 - the lowest figure since the company began tracking it in 2005. In a city of 8.2 million, that serves less than 0.1% of the population.
A report by StreetEasy.com out this week showed that asking prices for new apartments for sale in the city rose 12.4% this past year to an average of $1.46 million. The demand for housing is at a fever pitch. Meanwhile, inventory in the buying market dropped nearly 8%, according to the StreetEasy report.
When Weitz was looking earlier this year, she felt the pinch.
"One [apartment] I liked was gone before I even had a chance to see it," said Weitz, 31. "I thought I would have a couple leisurely months to look around."
"Those days are pretty much gone," said Gary Malin, president of Citi Habitats. Vacancy rates in the city are the lowest they've been in years - less than 1%, he noted.
"An apartment literally could be gone while you're [viewing the listing online]," Malin said. "The market moves so fast."
One thing he said renters should do if they're dying for a Manhattan home is adjust their expectations. If they can be flexible on what they're willing to pay or when they're willing to move in, it will widen their options.
Morgan Turkewitz, an agent at Citi Habitats who helped Weitz score her Upper West Side pad, has seen cases where clients come to apartment viewings at 11 a.m., and when they call at 2 p.m., the apartment has already been scooped up.
"The scary thing is it gets even tighter over the summer," Turkewitz said. So she tells her clients to come prepared with the paperwork ready to sign a lease on the spot if they find an apartment they like. "The one thing they can control is the paperwork."
"You can't wait on the market," she added. "It's New York - thousands of people are looking for apartments."