The Douglas Elliman RENTAL REPORT just came out and Manhattan rents soared 10.2 percent in the past year as tenants scrambled for new apartments in the tightest, fastest-moving market in years, new figures show. The median rent hit $3,195 a month — and $3,500 with a doorman. Apartments are being snatched up at the fastest pace in 20 years. Apartments were on the market for an average of only 39 days, compared with 55 days last year. Tenants are looking to move to new neighborhoods or to cheaper apartments in response to rising rents. Many are also looking at buying as an alternative for the first time in years with record-low interest rates: I just re-financed a mortgage of mine yesterday, dropping my monthly payment to just under $ 4,000/month. I am 100% certain that for $ 4,000/month plus the common charges and taxes, I would be renting a significantly lesser apartment. I will however say that the demands on obtaining the mortgage were very strict, so by limiting buyers, I see the potential for further rental escalation as the pool of buyers is kept smaller. But don’t believe rentals are only for those who cannot afford (or qualify) to buy…we just rented a $ 30,000/month apartment and received an offer on a $ 100,000.00/month rental….
Amazingly, housing costs are not a factor in our nation’s inflation figures (HUH????) even though in New York they account for the largest percentage spending item of income (for most)……so while everyone may tell you inflation is not that bad, throw a 10% rent escalation in with rising food costs, cab fares, subway fares, etc,etc and you can be CERTAIN Manhattan is experiencing MAJOR INFLATION. I estimate close to 10%. One of the best hedges against inflation is owning real estate…..and many who buy real estate in Manhattan are capitalizing on the fact that Manhattan’s inflation rate is consistently high, higher than anywhere else in the USA in my estimations.