NEW YORK (PIX11) — Zach Romano, a project manager who works on Manhattan’s East Side, spent months looking for an apartment, and it wasn’t an easy task.
“The most challenging part of it was finding something that fit in my budget, and I still had to sacrifice a lot,” Romano said. “I started with the proper channels, like Street Easy and Realtor.com. There were just about three or four places in my price range.”
It’s been a common feeling across the five boroughs. With the city slowly – but surely – making a comeback from pandemic closures, the exodus over the past two years appears to have peaked. Now, more people are considering moving in (or back) to the Big Apple, according to real estate expert Anthony Park.
“If you’ve been in the market at all, you noticed that was a crazy ramp up starting in late 2020 and early 2021. Prices were ridiculous for about one year, but now we feel like it’s reached kind of a plateau,” said Park, who is specialized in the New York City market. “There’s a pullback just because of the intersection of the war [in Ukraine] and the rise in interest rates.”
Rent prices are soaring in New York City, more than in any other city in the entire country. According to a study conducted by the listing site Apartment List and cited by the New York Times, rent has increased by 33% from January 2021 to January 2022. That represents almost twice the national average.
“The pent-up demand that people were not expecting to buy or to rent, and then now they’re slowly realizing new waves of people, every week and every month thinking ‘oh, I think New York City is back, or it’s going to return to its rightful place, so I think I should get into it,’” said Park.
With many companies reopening offices in phases, the wave of residents moving back tends to increase in a parallel manner, especially toward the warmer months of spring and summer.
“Since not everyone is coming back at once, it’s not surprising that rental prices and purchase prices are parallel rising exponentially,” Park added.
The COVID deals are gone
It’s a natural movement known as The Law of Demand. The lower the demand, the lower the prices. That is what drove property prices down across New York City from around March 2020 to January 2021. But now, that trend has shifted dramatically.
“COVID deals are absolutely gone,” said Park. “I personally faced it with a 100% increase in my rent. And we had two open houses where we listed right around $2 million, and they both sold for $2.4 million and $2.5 million. Those deals gone, for sure.”
After nearly three months of looking for the right place, Zach Romano had to adjust his requirements for his next home.
“Sunlight was a very important part of my search. So to find sunlight within my price range, I had to sacrifice other things, especially space,” said Romano. “I think this entire apartment is about 400 square feet; I have one closet to store things, my bed and my couch are very close together, but at least I found a good place in a very difficult time.”
Once the apartment was chosen, and the deal was done, there was another hurdle Romano would have to endure: the supply chain issue. With distribution delays all around the globe and economies still on the rebound, furniture stores are also facing long delays.
“Just like the apartments, there is not much available right now,” said Romano. “I didn’t want to go several months without a couch or a rug, so I drove five hours to furniture outlets and rented a U-haul to find furniture.”
Expert tips on how to make your apartment search less painful:
Be proactive – It is important to be more aggressive because of the lack of inventory. “Look for off-market properties. If you don’t have an agent working with you, reach out to rentals that are expiring within the year of that have been rented out to years ago, and see if they’re willing to rent before going on the market,” Park said.
Hire an attorney – “If you’re buying, make sure you have a good attorney. It can make a huge difference between whether your deal falls through or you get the deal,” Park said.
Be professional and kind – “With the amount of demand, agents are inundated,” Parker said. “So it’s important to be kind, punctual, and professional to work with.”
Zach Romano also offered a tip that helped him during his own search: “Find a realtor and a broker … It seems like a lot of money because of the fees, but it is important to have someone who knows the landscape. It was very helpful in my journey to find a place.”
NYC neighborhoods to watch in 2022
The Real Estate website StreetEasy monitors rent prices across the five boroughs. According to its latest data, the top five neighborhoods to rent in New York City in 2022 are as follows:
- SoHo in Manhattan
- Dumbo, Brooklyn
- Greenwich Village, Manhattan
- Red Hook, Brooklyn
- Gowanus, Brooklyn
Soho topped the list as downtown Manhattan’s amenities drew back New Yorkers who could afford them in 2021. The neighborhood saw a 48% increase in home searches in 2021 over 2020 and had the second-largest annual rent growth in the city behind Flatiron, another expensive Manhattan nabe. Dumbo, Greenwich Village, Red Hook, and Gowanus round out the top five as New Yorkers continued to look to Brooklyn for more space and affordability and as some of the city’s most expensive and sought-after neighborhoods saw a spike in demand when many New Yorkers returned to the city this past summer.