Manhattan rent prices saw their second consecutive month of gains in October. Borough-wide median face rent, which does not factor in concessions, rose 2.8 percent from October 2017, to $3,495.
There are several factors that are contributing to the spike in rents. The most important is the inflated cost of purchasing a home. These prices are keeping some groups of renters, such as young families or upwardly mobile individuals or couples, from purchasing homes, which means they are continuing to rent. Until prices come down, this trend will likely continue.
Another factor concerns landlord concessions. 41 percent of new leases contained some kind of incentive such as a free month of rent or a gym membership. Meanwhile, trying to purchase a home continues to be a very stressful experience, particularly for first-time buyers who are often overwhelmed by how competitive and cutthroat the process can be. That renters feel as though they can get a deal and not have to deal with the struggles of purchasing a home is yet another factor working in landlords' favor.
Finally, rental inventories are low and units are spending significantly less time on the market than they did a year ago (29 days this October compared with 44 days last October). This is affecting rentals throughout the borough, as evidenced by the decrease in the vacancy rate to 1.49 percent, its lowest point in nine years. This lack of inventory has made renters quick to pounce on any units they like.
Crain’s New York has more.
According to a panel discussion held at the fourth annual MIPIM PropTech Summit on Tuesday, landlords are increasingly turning to technological solutions to address issues that they face. On top of installing new security measures or smart technologies, representatives from Brookfield Property Partners and RXR Realty said that owners are now beginning to see themselves as service providers. They are no longer just “a provider of bricks and mortar,” as Ric Clark of Brookfield told those in attendance.
Evidence of the real estate industry’s interest in technology is more than just anecdotal. An August report by MetaProp, a venture capital firm that specializes in real estate technology, found that 2017 saw $12.6 billion in investment in proptech startups—a 300 percent increase from 2016’s $4.2 billion.
Though the panel was optimistic about the future of tech in real estate, many were quick to note that the industry has been slow to adopt new technologies. However, Scott Rechler, chairman and CEO of RXR, noted that this could be a prudent business decision. Jumping on every new fad can cost a lot should the technology fizzle or the provider go out of business. “You don’t want to introduce any product to your company or customer if there’s a high degree or reasonable degree that that company will not exist,” Mr. Rechler said.
The Commercial Observer has more.
In a Landlords New York Minute – A (Very) Brief Look Around the World
The centennial for the official end of World War I will take place on November 11, China has unveiled the first news anchor powered by artificial intelligence, and the United States imposed sanctions on three Russian and Ukrainian nationals for human rights abuses stemming from the annexation of Crimea. A federal judge has blocked the construction of the Keystone XL oil pipeline, the Ninth U.S. Circuit Court of Appeals ruled that President Donald Trump cannot cancel the Deferred Action for Childhood Arrivals program (DACA) implemented under the Obama administration, and the Trump administration is planning to create new rules regarding asylum that will inevitably end up in court because these changes are likely beyond the scope of the executive’s legal authority. Former New Jersey Governor Chris Christie is evidently being considered for the job of attorney general, consumer spending and capital spending for businesses increased following last year’s tax overhaul but the effects appear to already be wearing off on businesses that are already beginning to tighten their purse strings, the Federal Reserve will likely increase rates in December from 2 percent to 2.25 percent, residents in buildings operated by the New York City Housing Authority are dealing with power outages, railroad tracks can actually get slippery and cause delays (as NJ Transit claims), the 2019 Michelin Guide was released this week and 76 restaurants in the city received at least one star, and New York may soon ban the sale of flavored e-cigarettes.
Fertility rates around the world are declining, there is a sadness circuit in the brain, Christmas music may enrage people who already find the holiday season to be stressful, nostalgia may be good for you, you can buy Vernors Ginger Ale in Buffalo, disposable straws serve a purpose, scientists will soon vote to change the definition of a kilogram, Antarctica may be comprised of multiple continents, and NY1 tried to explain why street names in Queens are so confusing.