August 22, 2007

A chill in rental game?

Some dispute firm’s findings

By David Freedlander
dfreedlander@am-ny.com

Manhattan’s overheated rental market is beginning to cool off, according to a new report issued by The Real Estate Group, a local brokerage firm.

But some New Yorkers who are looking for a reasonable rental in the city found that hard to believe.

“It’s been extremely cutthroat,” said Dalia Vann, a 19-year-old anthropology student at the New School. She said she had wanted to find a studio downtown for under $1,200 but nothing had turned up after 15 days of looking.

Most apartments were rented practically as soon as they were listed, she said, and many landlords rent them out even after prospective tenants have made appointments to come see them.

“I’d really like to be settled by now. I just want to find some permanent place and call it a day,” she said.

The report goes against the trend, as reported in Monday’s amNewYork, that the rental market typically tightens at the end of the summer as families take vacation time to look for new homes, and students and recent graduates with new jobs flood the city.

“We shouldn’t be seeing a downturn in August,” said Dan Baum, the chief operating officer of The Real Estate Group and the author of the report.

“In our opinion, landlords were overly aggressive in their increases, normally our agents would be scrambling to find apartments but we’ve more got more than usual to choose from.”

Don’t tell that though to Dana Epstein, 22, a recent college graduate from Boston who moved to the city this summer to take a job with an executive recruiting firm.

She and a friend from college found a place in Hell’s Kitchen for $2,250 a month — plus a $4,000 broker fee — only to have it swiped out from under them by two European exchange students willing to pay a whole year’s worth of rent upfront.

“It’s such an absurd process,“ she said, describing one apartment on 50th Street and Third Avenue where a broker wanted an $8,000 commission for a $3,200 three-bedroom apartment. “They put up ads all the time saying they are ‘no-fee’ apartments, but of course there’s a fee, that’s how they make their money.”

The report found rents decreasing in all kinds of units throughout the city except for studio apartments in doorman buildings and two-bedroom apartments in non-doorman buildings.

Other brokerage firms disputed the findings, which were based on The Real Estate Group’s current database of more than 10,000 available listings.

“They only have their figures, and I don’t think it’s accurate,” said Gary Malin, chief operating officer of Citi Habitats. “As far as Citi Habitats is concerned, we had a phenomenal summer run and see no sign of business slowing down whatsoever.“

Baum said it was difficult to tell what his numbers signified for the future.

“With the subprime mortgages and the financial markets, no one really knows what is going to happen in the next 12 months, everybody is speculating,” he said.