Landlord From NYC Chimes In On Falling Rents
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In response to NYC Apartment Rents Drop 7-10 Percent, National Vacancies Highest in 22 Years I received an interesting Email from a landlord in NYC about how much rents are really falling. JAL Responds:
Hi Mish,Thanks JAL
I'm a landlord here in NYC (as well as an avid reader of your blog) and I actually feel the 7-10% drop mentioned in the article understates the case somewhat. First off, many landlords in order to keep their rent rolls higher (possibly for mortgage purposes) will give incentives such as the free month mentioned in the article quoted, but this lowers the effective rent by 8.5% in itself. (Needless to say, those incentives are not mentioned to potential lenders, it's the civilian equivalent of "don't ask, don't tell".) In addition they also have to reduce the asking price to get that apartment rented which is why the 7-10% drop is a bit dubious.
Based on what I'm experiencing, I'd say that rents are down 10 to perhaps as high as 20% from their peaks. Keep in mind that rent stabilization and rent control the two programs we have in place on Moscow by the Hudson, distort the figures somewhat as tenants who have been in an apartment for many years may have still-below market rents and those will continue to climb but obviously that shouldn't be taken as evidence that rents are firm.
JAL
New York, NY
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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