Manhattan rents down; still stupidly expensive

Though I bought an apartment a little over a year ago, I still check out the Manhattan rental market report every couple of months or so, just to see what’s going on. According to the January update, average rents in Manhattan are down overall due to economic factors, though some neighborhoods are bucking that trend, notably TriBeCa (I blame you, Bobby DeNiro). Notable neighborhoods to find “bargains”: midtown (both east and west), Greenwich Village, the east village, and the LES all had rent drops, but are still averaging ridonkulously high rents. Harlem remains the cheapest in the city. Looking to spend more? Head to the aforementioned TriBeCa, Gramercy Park, Chelsea, and Battery Park City.

I’m interested to see what happens in the upcoming months – economic downturns that start with giant screw-ups in the financial industry usually affect NYC earlier, longer, and harder than most other parts of the country (see economic downturn, 1989-1992, where the city lost 1/10 of its jobs and the median home price in Manhattan dropped by a quarter). Not that rental prices are necessarily the only bellwether of the city’s economic downturn, but the nationwide real estate mess is going to affect everyone, especially when the axes start falling more in the financial industry.

Kind of scary.

2 Comments so far

  1. john morris (unregistered) on February 15th, 2008 @ 1:29 pm

    Things would have to totally cave in to create housing in the affordable range for most people in Manhattan and I doubt that will happen.
    much more interesting would be to see trends citywide.

    The thing about Manhattan today is that it now stands as one of the few cities in America, that truely fuctions as a city, in terms of providing a very strong level of convenience and the potential to not need a car.

    This is becomming more ands more valuable due to three major trends. One is the aging of America, which means more empty nesters without kids looking for the convenient lifestyle and healthcare infrastucture of Manhattan. Many of these people cashed out of huge homes at high prices, have large amounts of savings and high disposable incomes and are not too price sensitive.

    Two, is the fact that the pace of economic change and technlogical development has actually increased the value of face to face interaction. Manhattan sits at the hub of thousands of informal business networks that cannot be replaced or replicated. A lot of people seeking NY apartments are self employed and need these pads for vital business reasons. They cannot earn the same incomes somewhere else. The difference between being able to have 10-15 meetings in a day and 3 or 4 because you have to drive between them is worth a whole lot of money to people.

    A third trend which affects buyers more than renters is the influx of foriegn investors. Dense cities are the normal thing so these buyers see little value in investing in sprawl type developments.

    The 4th big factor is the decay of the nation’s infrastructure and road system which should increase the value of areas with density and semi functional infrastructure.

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