clock menu more-arrow no yes

Filed under:

More on Landlord's Regaining Control; The Hunt in Brooklyn

New, 3 comments

If reading The Hunt stokes your deepest hopes that someday everything in life could work out, then you, too, are obsessed with the New York Times Sunday Real Estate section. Join us as we venture into the depths of this weekend's installment, figuring out along the way what the subtext of each story tells us about the state of the NYC real estate market using our bona fide Market Point system.

1.) We keep hearing more and more about how landlords have taken the power back, and the Times decided to put their two cents into the conversation. It's looking like the numbers are reflecting the boom years again, and there's even a nice neighborhood breakdown.

-TO the chagrin of many renters in New York City, the balance of power in the rental market has tipped back toward landlords — if not far enough for landlords to start celebrating quite yet. -Overall vacancy rates are again hovering around 1 percent, where they were during the boom. Some landlords have started to push for rent increases.

A...typical scenario might involve someone who rented a $3,000-a-month apartment last year but received two months of free rent, bringing the net effective rent down to $2,500 a month. Most landlords in this situation will probably try to renew the lease this year at $3,000 a month, without incentives, although they might be willing to meet the renter halfway.

Some landlords are asking more from renters during the application process. Brokers at the Real Estate Group New York have noticed that landlords in smaller buildings in particular are requiring a guarantor or more money upfront, either as prepaid rent or a bigger security deposit

East and West Village — Brokers say that because everyone seems to want to live south of 14th Street, these neighborhoods were the first to bounce back.
Landlords stopped paying broker fees months ago, and concessions are nonexistent.

Midtown West and Downtown Brooklyn — Landlords at many of the new apartment buildings in these neighborhoods are still offering to pay broker fees, and in some cases free rent for a month or two. A renter who signed a lease last year for a $3,000-a-month apartment with two months of free rent effectively paid only $2,500 a month. At renewal time that renter will be looking at a new lease for $3,000. But depending on the number of vacant units in the building, the landlord may be willing to negotiate.

Upper East Side — Renters may be able to negotiate deals, because the area has the highest vacancy rate in the city. According to Citi Habitats, the rate on the Upper East Side is 1.8 percent, significantly higher than the 0.5 percent in the West Village. Rents are generally lower as well. The average rent for a studio is $1,711 on the Upper East Side and $2,175 in the West Village.

2.) The Hunt this week showed us a family initially looking for a 5 bedroom in Kensington or Windsor Terrace, with the search transitioning into looking for a house. There were some ups and downs but they eventually found a house with enough room for the whole family.

-Ideally, that would be a five-bedroom home. “We thought it was really important for all the kids to have their own rooms,” she said. “I had never seen a five-bedroom, but I thought they must exist. They hoped to stay in their part of Brooklyn — Windsor Terrace or Kensington. -So, around two years ago, the couple crunched the numbers and decided they would have better luck buying a house. They settled on a top price of $735,000.

-The first real possibility in their price range was a two-family brick house with seven bedrooms and three bathrooms on Seeley Street in Windsor Terrace.... But the house was “kind of a disaster inside.

-Another Windsor Terrace possibility arose: a four-bedroom house with a finished basement that could be a bedroom. The kitchen was new and the yard nicely landscaped. Their offer of $725,000 was accepted. But the living room was tiny, and they had second thoughts....She also disliked the carpeting and the brown bathroom fixtures. There would be little money to spare for renovations, so they reluctantly withdrew the offer.

-A listing for a pretty Victorian on East Fifth Street in Kensington proclaimed seven bedrooms and a price of just $729,000 — so low that Ms. Rosenberg thought it was a misprint.The place was perfect. The couple offered the listing price. But the seller balked at their 5 percent down payment, fearing that it would make securing a mortgage difficult. Then the price rose by $20,000....“I was just so upset,” said Ms. Rosenberg, who walked past the house every day for months.

-But the selling agent mentioned a four-bedroom two-bath house on East Third Street in Kensington. This one, a Victorian with a front porch and stained-glass windows, was listed at $665,000....The selling agent there, Tina Del Toro, an associate broker at Fillmore Real Estate’s Avenue J office in Midwood, alerted them to the Federal Housing Administration’s 203(k) Rehabilitation Program, which insures loans covering renovation costs as well as purchase price, and which allows a down payment of 5 percent.
Two contractors came to check out the house. Factoring in the price of necessary repairs, if the couple could get the house for $600,000, “the numbers worked,” Ms. Rosenberg said. “Any other house required either too much money to do the work, or cost too much money and still needed work.”

-Their offer was declined. Undeterred, Ms. Rosenberg went online and located the owners, a brother and sister. She wrote them a letter, assuming that “if I told you about us, we might be a family you want to do business with.” And she prevailed upon the brokerage to restate their case. Eventually, the sellers relented.

-The couple closed in January, with a down payment of $30,000 on a purchase price of $600,000. Their loan, for around $705,000, included money for construction.
The family looks forward to the holidays, when friends and relatives will gather there. “We love being able to offer friends from out of town a place,” Ms. Rosenberg said. “It is a very happy house.”

This week was somewhat conflicted, the loss of all those sweet rental perks really sadden us, but is there anything sweeter than a big happy family. The executive decision is +3 MP for the week!