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Bidding wars come to New York rental market as prices rise


New York is back, baby — and its notoriously high cost of living, too.

As offices reopen and residents return from their pandemic hideouts, a number of rental bidding wars have begun to drive record rents even higher.

In March, an Upper East Side studio at 414 E. 88th St. listed by Joan Kagan and Rachel Zack of Triplemint for $1,950 a month — specifically, a fifth-floor walk-up whose kitchen doesn’t have a de four – eventually rented for $2,100 following a bidding war between three interested tenants.

A month earlier, a duplex in a Prospect Heights townhouse that the Corcoran Group put up for sale for $7,250 saw a bidding war push its final price up to $9,000. In February, Corcoran also listed a $6,000-a-month West Village duplex carriage house, which received more than 200 inquiries and 15 offers. The owner agreed to a $7,100 deal three days after the home was listed.

While bidding wars have become common in the New York sales market, fights for rental homes in the middle market are a new phenomenon.

The current rental market is a far cry from that of the first quarter of 2021, defined by stagnant housing demand – and median rents in Manhattan, Brooklyn and Queens continue to slide to record lows.

Competition for affordable rentals drives up rents. This fifth-floor walk-up at 414 E. 88th St. on the Upper East Side was selling for $1,950 a month in March, and even though its kitchen doesn’t have an oven, a bidding war has pushed his signed lease to $2,100.
Bernadette Pava

In February 2022, however, median net effective rents in Manhattan, Brooklyn and northwest Queens jumped, while the number of apartments listed in all three areas fell, according to the latest counts from Douglas Elliman.

And that month, amid strong demand and weak supply, the share of rental bidding wars soared in all three regions, reaching dramatic heights that industry sources said. told the Post they had never seen.

In February, 17.7% of all Manhattan-listed rentals engaged in a bidding war, up from a relatively normal 0.9% last February.

In Brooklyn it rose to 19% of all rentals from 0.7% the previous February – while in Queens it rose to 9.6% from 0.3% year-on-year ‘other.

Bidding wars come to New York rental market as prices rise
Spoils of War: On the Upper East Side and beyond, bidding battles have pushed record NYC rents into the stratosphere.
Bernadette Pava

“It’s not just the high end that’s seeing bidding wars, we’re seeing [them] everywhere, and that’s because inventory has come down dramatically — in the last six months in particular,” appraiser Jonathan Miller, who compiled the Elliman report, told The Post, adding that it’s a sub- product of excess housing inventory that burns up in a short period of time. . “The levels we are seeing now are unprecedented.”

“Something hits [the market]everyone’s phone rings…and the game begins.

Broker David Kazemi

It was a wake-up call for Lindsey E., a 35-year-old advertising industry professional, who declined to give her full name for privacy reasons. For the past three years, she’s been living in a bedroom in Crown Heights, where she’s been able to lower her rent to $2,600 a month from $2,900. But when she decided to move to Greenpoint to be closer to her friends, she was shocked by New York’s new normal.

“I thought I was going to leave and get a quarantine deal,” she said. “And then it was quite the opposite.”

After viewing a dozen apartments, she encountered something for the first time: a unit listed at $3,200, which another potential tenant offered to rent for $3,800. She agreed to match it to call it hers, but visited a nearby bedroom listed for $3,500, whose representatives told her there had been significant interest and asked what she would offer. She countered with $3,800 on a two-year lease and told brokers she would paint the place herself.

“I can’t tell you how much [apartments] I was trying to go see [and heard] it went away, so I started to feel the pressure,” she said.

Bidding wars come to New York rental market as prices rise
A washer/dryer is one of the perks Lindsey E. was looking for.
Stefano Giovannini

She moved there in February and is enjoying her spacious footprint – with features like a washer/dryer and a soaking tub. But the deal came with more than just sticker shock.

“I had quite a bit of money to pay for this place and luckily I had a career leap in the middle of it – and I have a big savings cushion, thank goodness,” she said. declared. “I kind of have to go back and remind myself, ‘You’ve already made money jumps and it’s all in line with your salary. And I think the only shame I have is, “Wow, you spend that much on rent – you could have bought a house in another state.” ”

David Kazemi, the Bond New York associate broker who listed Lindsey’s new home alongside his colleague Ann Takahashi, also attributes the interest overload to the lack of available units.

Bidding wars come to New York rental market as prices rise
Lindsey had to take a “money jump” to land in her Brooklyn apartment.
Stefano Giovannini

“Something hits [the market], everyone’s phone rings…and the game begins,” he said, adding that this unit was listed at $3,450 in January – and the asking price rose to $3,500 after interested renters sent an email every 10 minutes on the first day. “When you first post the ads you get crushed. It’s immediate.

While it may sound like a Hunger Games-style scenario, it’s legal for landlords to raise their prices in bidding wars – although it depends on what type of apartment it is.

“It’s key that they’re at the market rate,” real estate attorney Neil Garfinkel said, adding that such price hikes would be illegal with rent-regulated or rent-controlled apartments. “As long as it’s a free market, it’s a free market.”

Bidding wars come to New York rental market as prices rise
Earlier this year, this 935-square-foot, one-bedroom at 108 Leonard in Tribeca was $7,895, but eventually rented for $8,500.
H5 Property for Corcoran Group

Just because it’s legal doesn’t mean it’s not shocking.

In late 2021, Brown Harris Stevens broker Senad Ahmetovic listed an East Sixth Street alcove studio for $2,600 — the most that unit had ever asked for per month. “Two days is all it took,” he said. There was a flurry of applications and the winning party beat three competing bids by offering $3,100. “Of course the owner took that one…we weren’t expecting a bidding war.”

Corcoran agent Daniel Kandinov also felt the rush, telling The Post, “It’s definitely been the most frenetic rental market I’ve ever seen.”

Bidding wars come to New York rental market as prices rise
The 935-square-foot Tribeca spread garnered more than 100 inquiries in two weeks.
H5 Property for Corcoran Group

Earlier this year, he listed a 935-square-foot bedroom at 108 Leonard in Tribeca for $7,895, which — after amassing more than 100 inquiries in two weeks and five offers on the table — was rented for $8,500.

“I was surprised by the number of single-chamber applicants who were there to [this price]but we had 261 saves on StreetEasy for the roster in 20 days – and that’s a telltale sign,” he said.

And it wasn’t just the higher price that sealed the deal for the winning tenant, but also the fact that the new resident could live there for 18 months, which the landlord preferred to a competing offer of 12 months. .

“I think as fast as people were leaving New York at the height of the pandemic, that’s as fast as they are rushing in,” he said.

New York Post

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