Ali’s article is from over a year ago. The narrative in it (at the high end) was right. Now, not so much: it all seems fully rebounded at the very least.I also have to question if luxury rentals in NYC are still down or has the rebound off the bottom negated that?
Yah, inflation sucks. Somewhere I read that beating down inflation this time is gonna be extra hard / prolonged. Pressing the gas on already-low rates moved home prices up, which can be sticky. As rates increase and home prices remain high (even in a detente), cost of buying becomes higher, driving rental demand. Since rent / rent-equivalent is 1/3rd of inflation, pressure on inflation does not get relieved by higher rates. Eventually, it’ll kick in of course, but it’ll take time.I know I have been beating the drum of "it's getting harder and harder to be middle class" since before the Pandemic, but another data point: We are outgrowing our current place (an extremely large Four) and are keeping our eyes peeled for a Five and there is certainly nothing to rent in our current neighborhood, or its environs, under $7K/month. (Technically there are a couple of units that are Fives or can pretend they're Fives, but they're no bigger).
It's interesting that for a number of years millennials were blaming Boomers and claiming they would never be able to afford to buy houses. Then with ZIRP they not only started buying them, but in their usual YOLO gusto went all-or-nothing.
It will be interesting to see what happens to the studio market which was always geared towards the "I'm not home much anyway" crowd.I blame corporations: without full RTO people still want/need home offices, and the people who can afford those are the ones with high-paying jobs, so they're bidding up the price of that fifth room on the margin (by a lot; the difference between a good Four and a good Five, at least in my neighborhood, is roughly $750K).
Here in NYC I think one of the reasons that lower priced units are rising so much is artificial scarcity. Recently CHIP (a landlord advocacy group) published that its members are keeping 20,000 Rent Stabilized units off the market on purpose, implying they were holding them hostage until NY State changed the Rent Stabilization act so they could charge whatever they wanted for them. I suspect they are trying to get the official vacancy rate over 5%, the rate which in the statute will trigger an end to Rent Stabilization. Both DeBlasio and now Adams delayed the official survey of vacant units.
The Real Estate industry in NYC got themselves in this jam to begin with (i.e. Housing Stability & Tenant Protection Act of 2019) due to extreme hubris and overestimation of lobbying power in Albany, plus failure to read a shift in sentiment in both the legislature and general public. It's my opinion this is being done again because if they tried to do away with almost a million Rent Stabilized units there would be bedlam.
There have also been many non-Rent Stabilized units kept vacant on purpose since the start of the pandemic.
NYC landlords are sitting on apartments because rent is getting too cheap. They'd rather keep them empty.Landlords in New York City are holding out for a spring-summer rent rebound, but experts say pre-pandemic rents won't return until 2022.www.businessinsider.com