Facing massive rent increases, some are doubling or tripling up with roommates, while others are moving to more affordable neighborhoods, fueling competition in areas like Queens, where the number of available apartments fell for the fifth consecutive quarter, to under 9,000, according to StreetEasy....
Commenters over there are not sympathetic. A top-rated one says:
I'm sorry, but if you thought that once-in-a-century deep discounts on rents - during the depths of Covid desolation - were going to continue once the city returned to a semblance of normal, you were deluded. I saw dozens of incredible deals in 2020, and the first-half of 2021, but it was clear this would be a short-term thing - and the cost of moving twice in 12+ months would eat into any financial benefit I'd experience.
Some people in this article gave up plum rent-stabilized spots for these short-term deals? My head spins at the bad judgement.
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34 comments:
Bozeman
meanwhile, the WSJ reports
Boise’s Housing Market Boomed Early in the Pandemic. Now It Is Cooling Fast.
‘Zoomtowns’ that drew remote workers are now expecting prices to fall as interest rates rise and companies call employees back to the office
I just have a problem with this sentence: "But big cities, like New York, Washington, D.C., and San Francisco, found themselves on the receiving end of the exodus."
The receiving end of an exodus would be the destination, would it not? The place where the exiles are received? But the writer apparently means the precise opposite of what she wrote.
Prices took a small dip in San Francisco (for buying) but have rebounded a bit.
Tough to time the market of course.
Should have bought a place in Bozeman 20 years ago when we visited.
We would have made a ton of money, but that town has turned into California...might as well be in Palo Alto.
Yep. The lesson? No matter what you do, in NYC, everybody takes a bite of the shit sandwich. Some of these people should be thankful they got out, much less trying to get back in.
Wife and I are going to spend 2 weeks in Boise next month. Part vacation and part remote work. Most of the air bnb’s we looked at showed a picture of the Speedtest network performance in the unit so you’d know if you had enough bandwidth to support remote work. Never been to that part of the country and looking forward to it.
VT’s population grew.
With vacancies soaring, landlords slashed the asking rents to attract tenants.
Rents NEVER came down in D.C. They were unaffordably high before COVID, unaffordibly high during COVID, and unaffordably high after COVID. And I doubt rents came down elsewhere. Instead, rents were largely frozen by government fiat. Meanwhile, moratoriums on evictions for failure to pay rent were instituted. At least one locality around D.C. wants to extend the COVID rent control.
As a result, especially now with skyrocketing inflation, when the controls are lifted, property owners are setting high increases in rent.
The consequence is that renters are squeezed paying rent they cannot afford, property owners are squeezed from the lack of necessary income, both are squeezed by a crapper economy, and the government goes on richer and comfortable as ever.
There's quite a bit of anecdotal chatter about the decline of quality of life in NYC. It's odd that,if the decline is real, it's not reflected in rental prices.
But big cities, like New York, Washington, D.C., and San Francisco, found themselves on the receiving end of the exodus.
The cities people are leaving are on the receiving end of the exodus?
I hope that was written intentionally as a humorous juxtaposition, not just sloppy metaphor mixing.
But I very much doubt it.
You ain't seen nothing yet. The commercial office space market is hurting in our major cities. Yes, covid cleaned out the offices, and employees have been reluctant to come back. But there are other factors- such as people no longer wanting to pay for parking, to walk over homeless or feces, or be accosted in the subways. But companies, now getting used to having remote employees, are rethinking the cost of their long leases in exorbitantly high cost cities such as New York, San Francisco, Chicago. And many are establishing regular remote work while looking for smaller office spaces that cut their operating costs.
Currently, San Francisco has an office vacancy rate of over 40%.
Now what happens when those office leases come due and companies- multiple companies in one building- do not renew, or take a smaller space? Well, the building owners still have payments to meet to hang onto their buildings. And many of those buildings will go into foreclosure as the landlord investment groups cannot make the payments.
That is all yet to come, in the process of playing out. Along with our house, auto, and student loan bubbles. But don't worry. Kamala is on it. She's the woman at the table. Wearing blue.
Rent control is why there's no apartments.
It's more complex than this:
- With COVID there was an eviction moratorium, so deadbeats just sat and there no vacancies materialized. This "gift" to those in need bit back as rampant rent inflation.
- Many people love, love, love the city lifestyle but they hate commuting. Older, established people bailed on the cities and moved to their dream destinations before retirement. Long Island, Florida, etc. Some were forced to return for hybrid work, while other people move closer to where they want to be.
- @Temujin: Yes, office real estate has been destroyed and is a major story. Decimated x 4 (decimation = 10%). To the extent that remote work persists some 2nd and 3rd tier buildings will be converted to apartments or live-work units. They'll probably fill up easily by city loving people.
- The workweek service industry (e.g., lunch restaurants, happy hour bars, transit) stand to be transformed as remote workers avoid commutes. Some workers will shift to the new resident's needs while others will work in the deep suburbs or booming southern cities.
- To the extent that remote work persists, careers will grow ever farther away from home base. You won't be able to predict politics or income based on location.
A whole bunch of people think rolling out of your bed and working 3-4 hours a day is "working".
My daughter bought 5 acres in the Idaho panhandle, near the Canadian border. She has been offered twice what she paid 5 years ago. No building yet; just trees.
It's not a good idea for people who are still mentally and spiritually in California, New York, or Illinois to be voting in Montana or Idaho. They avoid the consequences of Blue State policies and impose those policies on the Red States.
And yes, that "receiving end of the Exodus" is nonsense. Where are the editors?
It may be time for some of these NYC renters to go back to Nebraska:
“We are all alike; we have no ties, we know nobody, we own nothing. When one of us dies, they scarcely know where to bury him. Our landlady and the delicatessen man are our mourners, and we leave nothing behind us but a frock-coat and a fiddle, or an easel, or a typewriter, or whatever took we got our living by. All we have ever managed to do is to pay our rent, that exorbitant rent that one has to pay for a few square feet of space near the heart of things. We have no house, no place, no people of our own. We live in the streets, in the parks, in the theaters. We sit in restaurants and concert halls and look about at the hundreds of our own kind and shudder.” - Willa Cather, 1913
Well, the building owners still have payments to meet to hang onto their buildings. And many of those buildings will go into foreclosure as the landlord investment groups cannot make the payments.
That's fine. A lot of these buildings are HIGHLY leveraged. The developers/owners pitch in a couple of pennies, the banks put up the rest. If it is successful, the developer/owner cleans up $$$$$. If it fails, the developer/owner is out only a few cents.
That's how we end up with hyper-development here in the D.C. area. It is low risk for the developers.
3-4 hours a day???
No. Way.
With big city office vacancies at 30%+, and little sign of improvement, I imagine many owners will begin to transition whatever space they can into condos/apartments.
A good friend, neighbor, and corporate attorney, took her Seattle-based executive position in health care to Walla Walla*. She now operates from Walla Walla, and occasionally flys into Seattle for meetings.
*It's so nice they named it twice.
Had a second house just north of Boise. Bought in 2016, unloaded it last summer for 2.5 x purchase price.
Rents are being driven by massive immigration. And buying of real estate by overseas investors. Its going to be even worse when we have 400 million people instead of 330 Million.
All the libtards love open borders. if they're paying high rents, well you asked for it.
Saw that one coming a year ago.
Vicki from Pasadena
Can’t be really real. Rents will follow home prices, and landlord shenanigans can’t hid the decline forever (for example they never lowered the nominal rents, just gave away 2-4 months, so they didn’t have to write down their investments). As a lifelong NYer I really don’t understand why by anyone with children would ant to raise them in what’s become a shithole prison of a city that’s dedicated to further abusing our kids. Or anyone else for that matter, why surround yourself with the neurotic conformists who beg for ever more restrictions on our lives and liberties? Because it used to be cool?
Quick check with a broker friend: bullshit. They’re still using all kinds of incentives like free months and reduced rent for several months to get people to sign. For a variety of reasons related to rent stabilization laws and private capital investment partnerships landlords will do a lot not to reduce nominal rent and in fact increase it by the annually allowed limit, even if realized rent is declining—which it is.
"But don't worry. Kamala is on it. She's the woman at the table. Wearing blue."
This made me laugh out loud.
Enigma- to follow up on your comment on my comment.
Yes, those 2nd and 3rd tier buildings will be converted to condo or apartment buildings...in time. It'll take time for that to happen. Especially in California where environmental studies, city, county, state regulations will need to be met, and payoffs will need to be made. And new sources of money found to invest in all of it. It'll happen. But it'll take a few years.
In the meantime...your points are spot on. The best line: You won't be able to predict politics or income based on location. This will be the new landscape in a few years.
Fun for people while it lasted though!
If you grew up around cities like Little Rock, St. Louis, and Memphis, the idea that NYC has a lot of crime is funny.
My name is Wild Swan. My pronouns are she, her. My hair is short and wavy and I'm here wearing my Radio Shack T-shirt and shorts. I have nothing to say but now you do this if you're present.
If you grew up around cities like Little Rock, St. Louis, and Memphis, the idea that NYC has a lot of crime is funny.
If you’re in your 30s, yeah.
wildswan said...
My name is Wild Swan. My pronouns are she, her. My hair is short and wavy and I'm here wearing my Radio Shack T-shirt and shorts. I
Tell us more, just getting interesting.
Damn man.. outstanding house!!!
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