New York City is one of the hottest real estate markets that can be found in the world. After all, it is not just one of the most populous cities in the United States but also one of the most prestigious cities in the United States as well, thus making it a place to keep a close eye on. As a result, there are lots and lots of people with a keen interest in New York City’s real estate market, including a significant percentage of both real estate consumers and real estate professionals with no direct stake in the region.
Regardless, the sheer interest in New York City’s real estate market means that it should come as no surprise to learn that there are lots and lots of people involved in collecting real estate data, compiling it into real estate statistics, and then publishing them in real estate reports for the purpose of providing useful insight to interested individuals. One such example is StreetEasy, which is a search service that specializes in serving people who are interested in New York City’s real estate market. In its latest report, it went into details regarding the performance of New York City’s rental market in 2016 while also using that information to come up with a set of predictions for the expected direction of the same in 2017. Something that should interest both real estate consumers and real estate professionals, if only because of the inter-connected nature of real estate markets.
What Is Happening in New York City’s Rental Market?
First and foremost, the report revealed that New York City’s rental market still heated up throughout 2016, but at a slower pace than in 2015. This is supported by how its prices had risen 2.9 percent year-over-year by August of 2016, which about half of 5.8 percent for the same measurement in August of 2015. Something that is more than significant enough to be noted, though whether its impact will be beneficial or harmful has lots and lots of room for interpretation because of the clashing interests of the stakeholders in New York City’s rental market.
In main, StreetEasy suggests that this trend has happened because of a slowdown in the more luxurious segments of New York City’s rental market, which is supported by how the prices of the most expensive rental properties in New York City saw the least increase at 2.2 percent. This means that there are fewer real estate consumers competing for the right to live in some of New York City’s priciest places, though that is still sufficient interest to sustain their current prices instead of letting them fall. However, that is not enough to explain the overall direction of New York City’s rental market, which is where StreetEasy’s second most interesting piece of information comes in.
Over the course of the same period of time, the price of the least expensive rental properties in New York City increased by 4.4 percent, which is about twice the level of their most expensive counterparts. As a result, it is possible to state that the rise can be attributed to the ferocious competition in the less expensive segments of New York City’s rental market, which is enough to drag up the prices as a whole in spite of less dramatic figures elsewhere.
Implications-wise, all of this is interesting because rental prices in New York City can have a great deal of effect on a great number of people. After all, it is one of the most populous and prestigious cities in the United States, which in turn, means that its real estate prices are some of the highest in the country as well. As a result, there are more people who choose to rent rather than buy in New York City, which in turn, means more people who are affected by changes in New York City’s rental market. Regardless, a slower pace of increase means more affordable housing for people who are reliant on rental properties for meeting that particular need, though this is less true for those who are most vulnerable because of the selective nature of the increase.
Then again, rising prices in real estate tend to be associated with better economic times, but once again without information about the changes in the average wage of those who live in New York City over the same period of time, it is not possible to speculate too much about it without the speculation becoming spurious that it loses usefulness. In contrast, those who are interested in the more luxurious segments stand to gain from rising but somewhat slow-rising prices in the sense that one, they are more affordable, and two, fewer real estate consumers competing for the same rental properties means better results because there is more room for negotiation.
What Is the Expected Direction of New York City’s Rental Market in 2017?
Moving on, what is not spurious is StreetEasy’s prediction that New York City’s rental market will continue to heat up over the course of 2017. Like how the rental markets in some parts of New York City saw bigger increases than others, it expects the same to remain true in 2017. For example, it speculates that Manhattan will see a 4.3 percent rise in median rent compared to a speculated 2.9 percent rise in Brooklyn’s median rent, which reflects much of what happened in those two places over the course of 2016. This is useful information for people who are planning to look for a place to live in New York City sometime soon in the future. However, they should remember that it is not enough for them to choose the right location but also take their personal circumstances into mind. After all, StreetEasy has shown that different segments of New York City’s rental market are seeing different trends, even if they are moving in the same general direction. In fact, the differences between different segments can be even more extreme in some places than others, meaning that real estate consumers should make their choices with care and consideration as always.