Average Manhattan rent: $3,418
Rents go nuts in the Big Apple. But renters who want to buy instead are stuck if they can't qualify for a mortgage.
This post comes from Marilyn Lewis of MSN Money.
You think you'rehaving trouble finding a rental you can afford? Be grateful if you don't live in Manhattan. There, the vacancy rate is 1%, and the stampede for homes and apartments has driven the average rent to $3,418 a month.
That's more expensive than even at the peak of Manhattan's real-estate bubble in 2007, says The New York Times, in a story called "The city of sky-high rent." It's also a far cry from the post-crash days of 2008, when landlords were offering two months' free rent for signing a year lease.
Soaring rents are the result of the hot competition on two fronts: Home shoppers are having trouble getting loans, and new construction in the city is limited.
Studios for $2,000 to $2,500
The Times got its rental prices from a survey (.pdf file) by Citi Habitats, Manhattan's largest rental brokerage firm. The study covered only buildings owned by big rental companies. Properties owned by small landlords weren't included. Nor were rent-regulated apartments, which the majority in New York City are.
That may affect the numbers somewhat but not the trend: High rents are rising higher. Glance at Craigslist's Manhattan rental listings, and you'll find studios renting for $2,000 to $2,500.
New York's high rents are such a long-standing problem that a fringe political party, the Rent Is Too Damn High Party, ran its own mayoral candidate in 2005 and 2010.
To cope, Manhattanites -- already famous for squeezing lots of tenants into a small apartment -- are doubling up even more, using living rooms for bedrooms, says the Times. Many flee to the boroughs surrounding Manhattan, where rents, while relatively less expensive, also are rising. (Post continues below.)
But relocating is expensive, too -- as much as $5,000, including broker fees, security deposit and moving costs, one renter told the Times.
"I felt trapped," said Jaclyn Barrocas, who was recently hit with a big rent increase on her East Side apartment. "It was too expensive to move and too expensive to stay. And it feels like I am not even a person to the landlord."
At New York magazine, which linked to the Times' article, readers skewered some of its findings for being biased toward high-end real estate. But they, too, lament the high cost of renting in Manhattan:
I am so glad I left NYC. Disposable income! Who knew?
Added "NYCBOY73," speaking of a group of renters described in the Times' article:
Am I the only one who thinks it's sad that you can make 90k a year, and still have to share an apt with perhaps two other people? And 3 grown men paying $5,400 a month to live in a 2 bedroom on Wall St is just depressing.
This city is ridiculous.
Readers are adding their two cents at the Times' site. "Nigel" posted about rent controls and rent stabilization ("RC/RS") in Manhattan:
Landlords have a set amount they want to make in rents for the entire building and if they cannot get the rent from some of the tenants, because of RC/RS, the other tenants will pay the difference, as long as the market supports it.
A family can earn $200,000 and keep their RC/RS apartment. That means a person making $50,000 a year will pay $2,000 for the same apartment that a person making $200,000 pays $500 a month for.
What about buying?
Many Manhattan renters, if they can afford it, are deciding it's time to buy. In fact, the rent-buy seesaw has tipped against renters almost everywhere in the U.S. Buying now is cheaper than renting in 98 of the top 100 metro areas, IHS Global Insight economist Patrick Newport told CNNMoney.
Buying may sound like a great idea, with interest rates staying at record-low levels. But would-be buyers who can't get mortgages are trapped in the increasingly pricey rental market, like renters all over the country. This story at MSN Real Estate looks at the increasingly stiff requirements lenders are placing on borrowers.
In Manhattan, Kimberly and Bryan Kreuzberger, both 32, told the Times that their Greenwich Village studio loft rented for $3,200 a month when they found it in 2009. With two free months' rent for signing a lease, their rent was effectively just over $2,800. Then, last year, their landlord raised the rent, to $3,450. This spring they're being hit with another increase, to $3,795.
It was enough to convince them to buy a two-bedroom apartment in the Dumbo neighborhood of Brooklyn. They're paying more than $2 million. After putting 25% down, their total payment will be $4,250 a month.
If $2 million sounds like a lot for a two-bedroom apartment, consider that the average sale price of a Manhattan condo was $1.86 million in the first quarter of this year. That's the highest since 2009, The Wall Street Journal reports.
Why do people stay in Manhattan, then? This blog post at The Village Voice explains:
Now, one could jump ship and head to Crown Heights or Astoria or Park Slope or Long Island City or a handful of other neighborhoods that offer much more bang for the buck. But Manhattan is still Manhattan; this dream-like Eden where it's do-or-die, go-big-or-go-home (to Brooklyn) and a dog-eat-dog world.
More on MSN Money:
- Calculator:Should you rent or buy?
- Do renters ruin a neighborhood?
- The rent-or-buy test
- Should you buy a foreclosure?
- Calculator:How much house can you afford?
- Return of the 20% down payment?
For those of you who don't live in NYC, count your blessings. I have to live here because my family is here. I commute from the suburbs because there are no jobs in the suburbs. Manhattan truly is hell for so many reasons. People think it's "so cool" to live in the city and if you don't, you have three heads. It now costs $12 to cross the George Washington Bridge and $10 a day to park if you're lucky to find a garage that cheap. Many people are shallow and treat others as disposable. They are judgmental if you put in 2 pounds or don't look fashionable enough. Many people are rude, aggressive, inconsiderate and selfish. NYC is what I imagine hell to be like quite honestly. If I wasn't born here, I would never live here.
I lived there in my mid twenties to mid thirties. Was shocked when I left that the rest of this country does not revolve around NYC. It was fun while I was there, but now only if I were a Zillionaire would I consider moving back to that overpriced rock between the Hudson and the East River. I agree about the rude, pushy, driven, hip people, but life is too short to spend that kind of money for a shoebox and have to share it with 3 others... For what a four dollar orange??? Makes no sense! :)
I've been thinking about moving to Manhattan.
Are their nine other people out there who want to share and apartment with me?
And people say we're crazy here in Arizona.... I own a 2800 square foot home, on 3/4 of an acre, just out side Phoenix that i bought for $ 160,000 just 7 years ago.... after down payment my monthy payment is under $1000.00 a month.
The stupidity of people is amazing... we see so many NY winter visitors every year and they cant get over how nicer it is here and soooo much cheaper..... no wonder they flock here every year.
@Blondieny3, It sounds like you need better friends not a better place to live.
@quasimoto33, What abandoned buildings?!
I love NYC. My Carnagie (hill) section is the best but you don't have to live in the city. You can commute. Take the subway, LIRR and be at a beach, lighthouse, fishing, crabbing on Long Island or the Metronorth and be at the RODEO, hiking a mountain trail up state with in 2hours max. You can be on Coney Island,Staten Island or in the Bronx at a City Island or Yankee game in minutes. This rent thing is a bold face lie. They are talking about a certain limited area like SOHO and other "Trendy" areas.A bidding war can be costly anywhere. This article is all hyped up for shock value by stuck up bitches who are afraid to go above 96St because they think anyone who doesn't need to tan don't have what they have and will hurt them to get it. Paranoid pampered princess/prick.
@huangnu It helps to be legal and have a good education.
I've been to many of other states including TEXAS where I have a family. I had a blast.
Could I list some things that were strange for me or that I didn't expect or like? Sure but it doesn't mean that other people won't like those things and find them normal. So, please don't base your opinion of NY on disgruntled or bitter people. Furthermore, people pay for what they want. And there's no accounting for taste no matter where you live. It doesn't have to make sense to you. I know people who wouldn't be caught dead on ranch even in up state NY. I suggested a friend go hiking with me in the NY Mountains and she over-rode her Botox expressing her horror. She would have been less shocked if I suggested her and her husband Swinging with us.In order to enjoy anywhere you visit or relocate, take the stupid expectations out of your head and stop comparing it to what you are used to. Appreciate it's beauty and it's uniqueness. There is hardly a place I've gone that I don't like except that back road in Tennessee which I'm sure (by the confederate flag and "private property; tresspassers will be shot in sight sign) led to the White supremacist compound. Big price to pay for a wrong turn. Other than that, I had a great time.
@Whocares173 Oranges are .50cents at the greencart but you can buy a whole bag for 2.00, Bananas 25Cents .69per Lb outa season 39 in.People are rude everywhere when they want to be.
Quasimoto: Huh? How many buildings are abandoned? I don't know where you get your information. The majority of time, buildings are sold before even getting posted, especially in Manahattan. Some storefronts can remain empty for a while, but rarely for long.
And for everyone else who questiosn why people would live here...I am an Iowa boy, and proud of it. I hope to move back there someday. I lived in Manhattan for a few years and then moved to Brooklyn. And while there are days that I miss the quieter life, most days I am perfectly happy here. People have mentioned the lakes available in Minnesota and Wisconsin. Yep, and they are beautiful. But we are surrounded by water. I go kyaking almost every weekend during the summer. I go parasailing on the Sound. Play on the boardwalk of Coney Island and Brighton Beach. People have mentioned how much nicer peopel are from other places. Absolutely, but you have to understand, when you get here, you are surrounded more by others who have also moved here from other places, than you are by born and bred New Yorkers. And most of the NY'ers are as nice as anyone else, just not as demonstrative. How long do you think it would take to get down a crowded Manhattan sidewalk if you were expected to greet everyone you passed? By being in or around the city you also have access to museums, concert venues, world class parks, theaters, movie theaters and festivals, street fairs, 24 hour food options and more FREE events than just about anywhere else. Yes, it is expensive to live here. But to the majority of people who do live here and make it their home, the expense is worth it. If it isn't, they have the right to move. That is the beauty of it. For all of you mocking those of us who chose to live here...do you REALLY want all 8 million of us moving into your area?
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