Folks, I think we’re about to start hearing the terms,”frothy” and “bubbly” again – applied to the Manhattan apartment rental marketplace. Bloomberg New is reporting, and we picked up this reprint in Crain’s New York Business…
Manhattan rents rose 9.5% last quarter to an average $3,121, Miller Samuel Inc. and Prudential Douglas Elliman Real Estate said in a report last month. That’s about three times the rate for the 44 largest apartment markets in the U.S., according to Marcus & Millichap, a real estate brokerage firm. Manhattan rental apartment vacancy rates fell to a four-year low of 0.96% last year, down from 1.2% a year earlier and 1.9% in 2009, according to brokerage Citi Habitats. Vacancy bottomed in 2006 at 0.76%.
“The key to the strength of the rental market is tightness of credit,
” said Jonathan Miller, president of appraiser Miller Samuel. “It takes quadruple-A bizarre credit requirements to get approved.”
I am beginning to see Manhattan apartments for rent at prices that are very close to their all time highs. There are several reason contributing to this. One is that Wall Street hotshots are getting much smaller bonuses for this past year work. They will probably get similarly small bonuses this year, which means that many of the young masters of the universe will be renting rather than buying.
Another reason is that buying in a New York coop has become extremely difficult. Fannie Mae and Freddie Mac are only insuring loans in New York up to a maximum of $625, 000 – which means that many buyers above that price have to put down much larger down payments, if they can get a loan at all. Manhattan co-op and condominium sales totaled 2,011 in the fourth quarter, 12.4% less a year earlier, according to Miller Samuel and Prudential.