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Rental auction wars (iStock)
Housing market bid wars are starting to ease after a pandemic fever spikes. But they’re not completely gone – instead, they’re popping up in the rental market.
Apartment rents are rising as New York City landlords abandon free rent grants and other perks made to lure tenants amid the peak vacancy rates caused by the pandemic. Brokers told the Wall Street Journal that as discounted units return for lease renewals, the landscape is heating up and starting bidding wars for apartments in demand.
“We just saw the rental market explode,†David Schwartz, director of real estate investor Slate Property Group, told The Journal.
Bidding wars are not uncommonly rare in the housing market, where bids and counterbids are part of the industry ecosystem. However, they are generally not seen in the rental market, as landlords often name a rent, which tenants will or will not be willing to pay.
The median rent in Manhattan was $ 2,743 in November, a recent low for the market, according to valuation firm Miller Samuel. The borough’s median rent rose in the months that followed, to $ 3,118. Adjina Dekidjiev, real estate broker at Warburg Realty, told the store that some ambitious landlords are looking to capitalize on this summer’s frenzy by raising rents by as much as 80%.
As homeowners raise prices, they are faced with their own form of backlash in the market. In July, 9.1% of StreetEasy rental listings in New York City were listed as discounts. In August, that number rose to 11.1%, suggesting that homeowners have adjusted after noting that not everyone is ready to pay premiums for apartment space.
Rents are on the rise across the country, although it remains to be seen whether bidding wars will emerge in other rental markets as well. America’s 30 major subways saw rents increase year-over-year in August, the first increase in any major city since the pandemic.
[WSJ] – Holden Walter Warner
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