Tenants could also consider suburbs, where rental prices have grown more slowly than urban rents, he says. That means that people who could have left their rentals to move to a home they bought, instead, stay there. A year ago, bidding wars for rentals were unheard of, and now tenants expect to offer a higher rent than requested. Thus, since the rental market currently follows the fundamental principles of supply and demand, Rosenblatt says that there are no signs of rents falling in the coming months.
Tenants living in rent-stabilized housing experienced the biggest price increase in more than a decade, and one-year leases increased by 3.25%, while the board voted in favor of a 5% increase in two-year leases. According to a recent StreetEasy study, the gap between real wage growth and rental prices in August was 23% when inflation is taken into account. After a summer in which moving to a new apartment or renegotiating the lease seemed to be confronting the last New York City boss, the rental market seems to be cooling down a bit. According to the apartment rental website Zumper, the average rent in New York fell by 2.3% between September and October.
This has forced many potential homebuyers to remain in the rental market, exacerbating the already high demand. If your lease has expired, staying and negotiating with the landlord might be a better option than trying to move, at least until the rental market slows down even more, said Paula Munger, assistant vice president for industrial research and analysis at the National Apartment Association. Demand for rentals will remain strong due to rising homeownership costs, especially since mortgage expenses have nearly doubled since January, Hale says. Many prospective buyers with off-market prices tend to decide to rent (or continue to rent), which increases demand for rentals.
One of the main reasons for the rent spikes has been the increase in demand from people who are excluded from a booming housing market. Appraiser Jonathan Miller told Curbed that, according to his analysis, the slight change could lead to a more balanced rental market, in which broker fees could fall and bidding wars could end. Earlier this summer, New York City witnessed increases in rents for both apartments with stabilized rents and units at market price.