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New York is back, baby — and so are its notoriously high costs of living.
As offices reopen and locals return from their pandemic hideouts, a number of bidding wars for rental units have begun driving record-high rents even higher.
In March, an Upper East Side studio at 414 E. 88th St. listed by Triplemint’s Joan Kagan and Rachel Zack for $1,950 per month — specifically, a fifth-floor walk-up whose kitchen doesn’t have an oven — ultimately leased for $2,100 following a bidding war between three interested tenants.
A month earlier, a duplex in a Prospect Heights townhouse that the Corcoran Group listed for $7,250 saw a bidding war boost its final price to $9,000. In February, Corcoran also listed a $6,000-per-month West Village duplex carriage house, which received more than 200 inquiries and 15 offers. The landlord accepted a $7,100 deal three days after listing the home.
While bidding wars have become common in NYC’s sales market, showdowns for rental units in the middle market is a new phenomenon.
Today’s rental market strays far from that of the first quarter of 2021, defined by flatlined housing demand — and median rents in Manhattan, Brooklyn and Queens continuing their descent to record lows.
In February 2022, however, net-effective median rents in Manhattan, Brooklyn and northwest Queens surged, while the number of listed apartments in all three areas plummeted, according to the latest Douglas Elliman tallies.
And that month, amid the high demand and low supply, the share of rental bidding wars soared in all three regions, reaching dramatic heights that industry sources told The Post they’ve never seen.
In February, 17.7% of all listed Manhattan rentals went into a bidding war, up from a comparatively normal 0.9% last February.
In Brooklyn, it grew to 19% of all rentals, up from 0.7% the previous February — while in Queens, it increased to 9.6% from 0.3% year-over-year.
“It’s not just the high end that’s seeing bidding wars, we’re seeing [them] everywhere, and that’s because inventory has fallen significantly — in the last six months especially,” appraiser Jonathan Miller, who compiled the Elliman report, told The Post, adding it’s a by-product of excess housing inventory burning off in a short span of time. “The levels that we’re seeing now are unprecedented.”
“Something hits [the market], everyone’s phone pings … and the game begins.”
Broker David Kazemi
It was an awakening for Lindsey E., a 35-year-old advertising-industry professional, who declined to give her full name for privacy. For the past three years, she had been living in a Crown Heights one-bedroom, where she was able to talk her rent down to $2,600 per month from $2,900. But when she decided to move to Greenpoint to be closer to friends, she was shocked at NYC’s new normal.
“I thought I was going to leave and get a quarantine deal,” she said. “And then it was quite the opposite.”
After eyeing some 10 apartments, she encountered something for the first time: a unit listed for $3,200, which another prospective tenant offered $3,800 to lease. She agreed to match it to call it her own, but visited a nearby one-bedroom listed for $3,500, whose reps told her there’s been significant interest in it, and asked what she would offer. She countered with $3,800 on a two-year lease, and told the brokers that she’d paint the place herself.
“I can’t tell you how many [apartments] I was trying to go see [and heard] it’s gone, so I started to feel the pressure,” she said.
She moved there in February and enjoys its spacious footprint — with features including a washer/dryer and a bathtub. But the deal came with more than just sticker shock.
“I’ve had quite the little money climb to pay for this place and thankfully I had a career jump in the midst of that — and I do have a big savings cushion, thank God,” she said. “I kind of have to go back and remind myself, ‘You’ve taken money jumps before and everything is in line with your salary.’ And I think the only bit of shame I have is, ‘Wow, you’re spending that much on rent — you could have bought a home in another state.’ ”
David Kazemi, the Bond New York associate broker who listed Lindsey’s new home alongside his colleague Ann Takahashi, also attributes the overload of interest to a lack of available units.
“Something hits [the market], everyone’s phone pings … and the game begins,” he said, adding this unit listed for $3,450 in January — and the asking price grew to $3,500 after interested tenants emailed every 10 minutes on the first day. “When you first put the listings out, you get crushed. It’s immediate.”
While it may seem like a “Hunger Games”-style scenario, it’s legal for landlords to increase their prices in bidding wars — though that depends on what kind of apartment it is.
“That’s the key, that they’re market-rate,” said real estate attorney Neil Garfinkel, adding that such price hikes would be illegal with rent-regulated or controlled apartments. “As long as it’s free-market, it’s a free market.”
Just because it’s legal doesn’t mean it isn’t shocking.
In late 2021, Brown Harris Stevens broker Senad Ahmetovic listed an East Sixth Street alcove studio for $2,600 — the most that unit had ever asked per month. “Two days, that’s all it took,” he said. There was a flurry of applications and the winning party beat three competing bids by offering $3,100. “Of course, the landlord took that one … we didn’t expect a bidding war.”
Corcoran agent Daniel Kandinov has also felt the rush, telling The Post: “This has definitely been the most frenzied rental market I’ve ever seen.”
Early this year, he listed a 935-square-foot one-bedroom at 108 Leonard in Tribeca for $7,895, which — after amassing more than 100 inquiries in two weeks and five deals on the table — rented for $8,500.
“I was surprised by how many one-bedroom candidates were there for [this price], but we had 261 saves on StreetEasy for the listing in 20 days — and that’s a telling sign,” he said.
And it wasn’t just the higher price that sealed the deal for the winning tenant, but also the fact the new resident could live there for 18 months, which the landlord preferred over a competing 12-month offer.
“I think just as quickly as people were leaving New York at the height of the pandemic, that’s as quickly as they’re rushing back,” he said.
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