The city’s residential real estate marketplace has been volatile in recent years for various reasons. Of course, 2023’s teetering economy and rising interest rates on loans meant that loans were prohibitively expensive. It meant that buyers paid a premium if they needed a mortgage, and it also meant that potential sellers were reluctant to give up a property with a 3-4% interest rate when they would need to get a new place that doubled that percentage. These factors led to an extremely low inventory of properties, even when the buyer had the money or was willing to take out the loan.
Renting offers better deals
Potential buyers willing to wait out the interest rates (or gamble that they don’t go higher) may find more options if they rent. Rental rates rarely go down, but experts see the largest number of rental options in the market since the pandemic. This fact puts more pressure on landlords to get places rented.
Manhattan is now an option?
Manhattan has traditionally been the most expensive borough, with notable exceptions elsewhere in the city, but those numbers started softening in the fall of 2023 and trending down by November.
This is a reaction to the previous surge: soaring rental rates encouraged owners to rent out their living space, causing a 16% increase in inventory.
Local Law 18 is another reason for the increase. This new regulation aimed at limiting illegal short-term rentals likely pushed some landlords back to standard rentals rather than deal with registering their property with the city and displaying the registration number on the unit’s listing. Failure to comply can result in steep fines.
Landlords may need to cut deals
Great apartments at a reasonable price are always hard to come by in New York. Still, landlords need to put people back in their units. New Yorkers love a deal, and the tried and true negotiation approach still works, perhaps offering a free first month, no fees, or simply pricing it to move.
Winter is a slow time in New York real estate, and this could change in the spring as the temperatures rise and people traditionally think about moving.