I guess I'm have a senior moment but I thought you had previously said a significant amount of those high end rental listings had just gotten pulled from the market as opposed to actually rented.You know I look at the RE industry with a suspicious eye, and I have no doubt there is all sorts of inventory hiding & warehousing happening. But the trends on the Miller data match what I have seen broadly.
1) Peak inventory was January according to Miller and started really coming down in March. I know of at least 1 returnee that came back in March. Think single people who were tired of wandering, living with family, etc. and wanted to get back to social life in NYC.
2) In the broad high end market, I saw individual condos with no incentive to collude, warehouse, etc. all started getting snapped up over the winter accelerating into the spring. I’m talking things like 100-unit buildings with 10 rental listings dropping to 1 or 0, with many buildings like this.
I think Prism is a bad example of what the general market did because the actions they engaged in was fairly outside of those of the majority of LLs. Also the person I know who lived in Prism said he believes they recently stopped listing everything available like the used to, but that's not really "here nor there."In terms of more standard apt buildings, I had been tracking Prism on SE threads because of their relative transparency & reactivity over the past year. Of the 269 units, listings had reached as high as 49 in late 2020. It is now 7:
Prism at Park Ave South, 50 East 28th St.: Prism at Park Avenue South is a sensational new glass tower at Park Avenue South and 28th Street, poised to redefine...streeteasy.com
Looking at the line of 440 sq ft studios I had been keeping an eye on, 2019 to present:
2/8/2019 #19A $3,710 studio 1 bath 440 3/1/2019 #18A $3,455 studio 1 bath 440 4/16/2019 #12A $3,270 studio 1 bath 440 4/20/2019 #16A $3,345 studio 1 bath 440 4/24/2019 #13A $3,450 studio 1 bath 440 6/2/2019 #8A $3,450 studio 1 bath 440 6/16/2019 #11A $3,460 studio 1 bath 440 7/1/2019 #4A $3,450 studio 1 bath 440 7/29/2019 #9A $3,615 studio 1 bath 440 8/10/2019 #10A $3,635 studio 1 bath 440 10/12/2019 #7A $3,425 studio 1 bath 440 11/29/2019 #9A $3,300 studio 1 bath 440 5/7/2020 #6A $3,180 studio 1 bath 440 5/9/2020 #7A $3,295 studio 1 bath 440 7/1/2020 #13A $3,065 studio 1 bath 440 8/21/2020 #5A $2,670 studio 1 bath 440 9/30/2020 #19A $3,380 studio 1 bath 440 10/7/2020 #18A $3,345 studio 1 bath 440 10/12/2020 #8A $2,620 studio 1 bath 440 10/31/2020 #10A $2,820 studio 1 bath 440 10/31/2020 #2A $2,515 studio 1 bath 440 1/21/2021 #3A $2,325 studio 1 bath 440 2/9/2021 #4A $2,280 studio 1 bath 440 2/13/2021 #10A $2,370 studio 1 bath 440 2/16/2021 #11A $2,490 studio 1 bath 440 3/18/2021 #19A $2,895 studio 1 bath 440 4/3/2021 #14A $2,625 studio 1 bath 440 4/15/2021 #2A $2,920 studio 1 bath 440 5/5/2021 #17A $3,340 studio 1 bath 440 5/14/2021 #16A $2,995 studio 1 bath 440 5/26/2021 #18A $3,395 studio 1 bath 440 5/30/2021 #7A $3,120 studio 1 bath 440 6/13/2021 #6A $3,430 studio 1 bath 440
It doesn't seem like they are playing games, but rather maximizing revenue via market pricing. In particular:
I think talk of "continued heavy rental activity into early 2022" will prove wrong, just like "continued heavy sales activity throughout summer" seems to be proving wrong because it's all driven by return-to-NYC-by-Sept demand. But for the moment, it sure seems like it's here. Prism played it smart, and will probably leave the summer at normal-ish near-full vacancy, with existing tenants primed for renewal increases. Those who have been warehousing will be sitting on empty inventory come the fall & winter, with reduced pricing and demand IMO.
- The lowest-priced apt available now is $6095. If they were warehousing and/or not listing full inventory, why wouldn't they have anything at a lower price?
- If they were doing serious amounts of warehousing and/or not listing full inventory, why were they showing 49 apts in winter 2020?
- If they were "holding the line" on higher rents, why would they go from $3635 for 10A in Aug 2019 to $2370 for the same unit in Feb 2021? And then we see $3450 for 8A in Jun 2019 vs. $3430 for 6A in June 2021. 6A spent 16 days on market and was the last sub-$5500 apt listed for over a month now.
My point wasn't that if they weren't warehousing prices would be lower, it's that they are attempting to manipulate the market. Also that as large amounts of leases end in July and August I think it's not going to be as easy to just "slip them back in" to the inventory pool and get absorbed as they think.I should also say that I acknowledge and agree with your point that if warehousing LLs weren’t warehousing, the prices would be lower. But price is price: it’s the point at which buyers & sellers meet today, not where they would meet given hypotheticals.
You are right. That was an early 2021 trend I had seen in my old building, where 3 rental listings got pulled after 4/9/10 months each. One of them subsequently got listed for sale and sold. The other two had been simultaneously been listed for sale, and in May both of those sales listings got pulled too. None have come back as listings.I guess I'm have a senior moment but I thought you had previously said a significant amount of those high end rental listings had just gotten pulled from the market as opposed to actually rented.
I got that sense at some point too, but I don’t anymore. If they have a bunch of sub-$6000 apts sitting around, why wouldn’t they list at least one of them over the past month. I suppose they could be sitting on a pile of $6000+ apts, but that’d be weird.I think Prism is a bad example of what the general market did because the actions they engaged in was fairly outside of those of the majority of LLs. Also the person I know who lived in Prism said he believes they recently stopped listing everything available like the used to, but that's not really "here nor there."
My point wasn't that if they weren't warehousing prices would be lower, it's that they are attempting to manipulate the market. Also that as large amounts of leases end in July and August I think it's not going to be as easy to just "slip them back in" to the inventory pool and get absorbed as they think.
The market manipulation isn't making that decision, it's telling people they've been rented at the higher rents already rather than being pulled and that they better act fast and rent units before they are gone because of how fast units are renting.Suppose it’s Jan 2021 and you think:
Is it market manipulation to wait for the July demand? 18 months at $3600 is more than 24 months at $2400, and you don’t have the difficulty of renewing a tenant from $2400 to $3600 come 2023.
- You can get a 2-year tenant in Jan 2021 at $2400, because demand is low
- You can get a 2-year tenant in Jul 2021 at $3600, because demand will be high
- Pricing in 2023 and beyond is $3600
Now you & I may believe such a strategy won’t pan out, but aren’t they allowed to think that it will?
While I don't think that's warehousing I do think it is an example of how there is overstatement of why availability is down.You are right. That was an early 2021 trend I had seen in my old building, where 3 rental listings got pulled after 4/9/10 months each. One of them subsequently got listed for sale and sold. The other two had been simultaneously been listed for sale, and in May both of those sales listings got pulled too. None have come back as listings.
Is that warehousing? I dunno. I think they could have gotten their asking rent in this market. I’m certainly seeing a lot of fast activity at that pricing happening right now. That building has no competing listings available at the moment. I figure they had a change of heart about what they want to do with the apt. Maybe keep it as a pied-a-terre, maybe wait for the sales prices to go up.
This is a really good question David. Honestly given where we came from, I'm unsure. I think what we are seeing now is still in the area of regression to historical mean from last year's shutdownAt what point off of peak May volume do we say the decrease is greater than "normal seasonality" decrease?
Hmm, logically the Sargent makes sense and pressure would be down, but I'm hearing the rental market is staging one hell of a comeback right now with rents starting to rise againI just saw a report about increasing incomes of those signing new leases in secondary markets. The analyst concluded that this was due to many higher earners being lured away from the largest cities and although there was no chart/data the claim was that income for those signing leases in SF, LA, Boston, Seattle, Washington DC and NYC was down. If that's true what does it say about what the market pressure on NYC rents will be? View attachment 344
I don't like it I must say. Real estate Data wants to be free and transparent, but here we areIt's getting harder to tell how many listings of either flavor are actually on the market. Brokers keep pushing their clients to go the "discretely off market" route, StreetEasy both raises rates on rental listings and cuts the automatic feed on sales listings, REBNY starts charging for RLS (and who knows what else is in the works).
It seems like the transparency for Real Estate consumers movement is moving to a new level of "in lip service only."
(And that's not even talking about shadow inventory)