The media stories about people fleeing the city in droves mean plummeting apartment prices in the sales and rental market, right? Not so fast. The lease on my family’s 2-bedroom ends November 1 and we’ve decided to stick it out in Brooklyn, rather than wither in the suburbs. We thought this would be a great time to finally score that NYC apartment deal we always wanted. I spoke to a few realtors about what’s been happening in the real estate market, and the results were surprising.
Where are the deals?
The first thing I noticed in my apartment hunt was that the Brooklyn rental market didn’t look that different now than it did a few years ago. There are still over-priced troll holes renting for thousands more than they are worth and buying a brownstone could easily set you back $5 million. Perusing Street Easy doesn’t tell the full story, and after I spoke with Dan Fishman, Associate Broker at Corcoran, I realized you have to know where to look.
“This is a good time to buy,” Fishman says. “There is currently a tremendous amount of inventory, rates are near historic lows, and prices have slid for the last two years only to be further punctuated by Covid.” Everyone can take advantage of the low-interest rates, so it might be a good time to dip a toe into the marketplace, but unless you have some pretty deep pockets, you may not find an investment steal. “The market for sub-$1MM remains fairly active, but for those with bigger budgets, there are deals to be had, especially if willing to take on a project and do some work,” Fishman says. Surprisingly, those deals in the luxury marketplace are not in Brooklyn, which seems pretty stable, but in Manhattan. “While Brooklyn is doing relatively well, the Manhattan luxury market has stalled considerably with transactional volume at a relative snail’s pace,” Fishman says. “The Upper West and Upper East Sides have been particularly affected as much of the buyer pool for the larger apartments is questioning their long-term plan.” A brief scan of Streeteasy showed many examples of this, but you’ll have to have the capital to take advantage of these potential deals.
Even though the prices remain pretty consistent, this could be a good time to get those things you always dreamed of in an apartment. Victoria Alexander, President at Realty Collective says, “It’s really a good time to consider looking for a new place, particularly if you’re interested in leveling up—maybe you want outdoor space or a washer/dryer, for instance.” Personally, I found a better apartment selection overall than in the last few years. Although the rents have stayed consistent, I found more spacious options or better amenities like a dishwasher than what I have previously seen.
Some renters may be leaving Brooklyn during Covid, but those apartments are being rented by Manhattanites who are looking for a bit more breathing room. Even within the borough, people are moving towards neighborhoods that are a bit more open.
“I’ve noticed a lot of migration within Brooklyn and some neighborhoods like Sunset Park and Red Hook are especially hot right now,” Alexander says. Plus, after months of being stuck indoors, it makes sense that “anything that offers outdoor space is competitive right now and tends to go quickly.”
Where does that leave the potential renter looking for an apartment deal? “Landlocked neighborhoods like Bed-Stuy are seeing significant price drops,” says Alexander. What you don’t get in outdoor space, you might make up for with extra interior space. “If you’re a renter, now is a great time to ask for what you want and not be afraid to do a little negotiation. Lock in a great lease for this next year at least.”
Ask for concessions
“In my ten years in the real estate business, I have only experienced a buyer’s market like this once before—in the couple years following the financial crisis,” says Elizabeth Johnson, Real Estate Salesperson at Compass. “It’s a good time to look for a new rental as well. There is a lot of available inventory and landlords are having to make concessions to renters.” This rings true for me since I’ve been finding free months available for signing a new lease in all types of buildings. “New developments in Brooklyn and Manhattan are also offering really great incentives and concessions for buyers now,” Johnson says.
According to an article by Luke, an app that will curate listings for you, the average number of months offered free as a concession has risen across the city since February. Here is their breakdown by area:
- Downtown Manhattan: up 26.2% (now 1.47 months)
- Midtown Manhattan: up 10.7% (now 1.7 months)
- Brooklyn near Manhattan: up 26.8% (now 1.6 months)
- Upper East Side: up 23.5% (now 1.47 months)
- Upper West Side: up 29.2% (now 1.83 months)
Additionally, there seems to be an increase in “No Fee” apartments, where the landlord is willing to pay the realtor fee themselves to get a renter in the door. For sure, it’s a renter’s market right now, and renters have the chance to ask for more. “There does seem to be a higher number vacancies for renters across the board,” says Johnson. “Most renters I have encountered since the pandemic are requesting concessions from landlords because of the increase in available inventory.” All of these concessions will certainly help in the short-term, and for those moving into a new place, this is a good time to really negotiate.
But for me, concessions are a short-term salve on a long term lease, and with the prices still feeling bloated, I may be better off staying where I am.