Bidding wars in the housing market are beginning to ease from a pandemic fever pitch. But they aren’t gone altogether — they’re popping up in the rental market instead.
Apartment rents are rising as New York City landlords are ditching concessions of free rent and other perks made to entice tenants amid pandemic-fueled vacancy rate spikes. Brokers told The Wall Street Journal that as the cut-rate units come back up for lease renewal, the landscape is heating up and sparking bidding wars for in-demand apartments.
“We just saw the rental market explode,” David Schwartz, principal at real-estate investor Slate Property Group, told The Journal.
Bidding wars aren’t exceptionally rare in the housing market, where offers and counteroffers are part of the industry ecosystem. They are not typically seen in the rental market, however, as landlords often name a rent, which tenants either will or won’t be willing to pay.
The median rent in Manhattan was $2,743 in November, a recent low point for the market, according to appraisal firm Miller Samuel. The median rent in the borough has risen in the months since then, up to $3,118. Adjina Dekidjiev, a real-estate broker at Warburg Realty, told the outlet some ambitious landlords are looking to capitalize on this summer’s frenzy by raising rents by up to 80 percent.
While landlords are raising prices, they are facing their own form of blowback on the market. In July, 9.1 percent of StreetEasy rental listings in New York were listed as discounts. In August, that number rose to 11.1 percent, suggesting landlords adjusted after finding not everyone is ready to pay premiums for apartment space.
Rents are on the rise across the nation, though it remains to be seen if bidding wars will emerge in other rental markets as well. All 30 of the top American metros saw a year-over-year rise in rent in August, the first increase in every major city since the pandemic.
[WSJ] — Holden Walter-Warner