New York renters may see large rent increases or a change of heart with their current building. Some may have realized they are paying way too much for what they’re getting for their money. 

With their annual Subway Median Rent Map, RentHop provides a detailed report to help renters visualize where they can save by riding the train to affordability.

This year, 84% of Subway Stops saw increases in rent. This is lower than last year, but the median rent is currently at $4,400, 3.5% higher than the same time last year.

New developments and renovated units caused spikes in rent in the outer boroughs, so for renters concerned about their rent changing in the coming years, keep an eye out for construction and updates.

Tenants with lower rents aren’t moving, which is decreasing the current inventory for lower-priced units. This could cause problems in the future if these tenants move out and owners renovate and charge higher rents.

Where to Live if You Work Remotely or Hybrid in NYC

With remote and hybrid work becoming more popular, does it make sense to shell out for an apartment in the city’s heart with a quick commute that may only happen 1-2 times per week? Increasingly, renters look to their local neighborhood communities to find nightlife, meals and social happenings. If one’s community provides everything they need, why fork over large amounts of rent?

Below, CitySignal looked at some of the best stops to live off of for renters wanting to be in proximity to a certain Subway line.

Best NYC Subway Stops to Live Off the 1-2-3 Line

Apartments off the Cathedral Pkwy 1 train stop at 110th Street saw a 1.4% dip in rent. While the median rent is higher at $3,450, you’re farther down in Manhattan and are in proximity to several parks.

135th Street Station (2-3) in Harlem has a median rent of $2,567 and only saw 2.9% growth last year. This may mean you can snag a better deal in the area.

Best NYC Subway Stops to Live Off the 4-5-6 Line

Rent along the 6 train saw the most drastic rental decreases, with some rent near stations coming down over 6%. 

Brook Ave off the 6 train in Mott Haven in The Bronx. The current median rent is $2,369, with rent dropping 6.4% since last year. 

The Franklin Ave stop for the 2-3–4-5 had one of the lowest rent growths in the Crown Heights, Brooklyn area at 2.9%. Median rent sits at $2,910 but you have access to the S train which can connect you with other Brooklyn lines.

Best NYC Subway Stops to Live Off the N-Q-R-W Line

If your budget has room to grow over the coming years, check out Astoria Blvd ($2,750/6.8%) or Broadway ($2,650/6%) off the N/W. Rent is still proportionately low; however, the area is seeing major growth, which may impact your lease during re-signing. Make sure to read the terms of your lease carefully.

Best NYC Subway Stops to Live Off the B-D-F-M Line

While 155th Street (B-D) in Harlem saw 19.3% growth this year, the rent is still sitting at $2,600. This is a great stop to live off of if you’re a Yankee’s fan, you could even walk to a game!

F Ditmas Ave (F) is a Brooklyn stop in the quaint neighborhood of Kensington.

Newkirk Ave ($2,379/-1.9%) on the B–Q lines will send you straight into Lower Manhattan or give you the chance to transfer in Downtown Brooklyn to another line.

Best NYC Subway Stops to Live Off the A-C-E Line

The A stop at 190th Street in Washington Heights, just south of Inwood. With access to green space on the west side of Manhattan, current median rent sits at $2,300 with a -2% change since last year.

Utica Ave (A-C) in Bed-Stuy has a median rent of $2,600. There are many small local businesses that you can enjoy instead of traveling into the city.

Grand Ave-Newton in Queens ($2,200/0%) gives renters access to the E–M–R trains but is also two stops away from the 7 train. 

Best NYC Subway Stops to Live Off the J, G, L & 7 Trains

J train riders should look around Kosciuszko St. in the Bed-Stuy/Bushwick area, where the median rent is $2,850, a 1.1% drop since last year.

For G train lovers, check out the Myrtle-Willoughby Ave ($2,850/3.6%) or Ft. Hamilton Pkway ($2,838/-4.9%) stops in Brooklyn. Queens G stops have seen large rent growth, and apartments near those stops have an average rent of over $3,800!

The L train is a pricey line to live off of (thanks to going through Williamsburg), but the first stop to see a bit of rent relief is Dekalb Ave ($2,728/1%) in Bushwick. How trendy.

The 7 Train has quickly become a favorite of many renters, so look to 33rd St in Queens for a median rent of $2,750.

Best Neighborhoods to Live to Have Access To All Subway Lines

For access to multiple Subway lines, consider apartments in FiDi, SoHo/Chinatown, Downtown Brooklyn, or Hunters Point/Long Island City in Queens. These are not the friendliest for budget-conscious people, but if one needs to travel, access may be helpful.

The post Which NYC Subway Stop Is The Best to Live Off Of? appeared first on CitySignal.

But for renters looking to take their first step towards buying, is it possible to buy a property in Manhattan and keep your monthly payments below the current median rent? And if so, what kind of property is it possible to afford?

Current median rent and home prices in New York City

Currently, in NYC, the median rent for a one-bedroom apartment is $4,125. On the other hand, the median list price for a one-bedroom apartment is $1.6M.

The two numbers don’t translate. Estimating a 7.29% 30-year fixed mortgage rate, a $771 HOA fee, $125 for homeowner’s insurance, and a 20% down payment, purchasing a $1.6M home would have the monthly costs fall around $9,663, more than double what the median rent cost is currently.

Shopping for a home with monthlies under the median rent price

As home buyers everywhere know, once one starts looking into the specifics of a home, that monthly payment number will fluctuate depending on the HOA or taxes, as well as the actual mortgage rate. But it’s clear from the beginning that the average one-bedroom rent is nowhere near the average one-bedroom purchase price.

If a homebuyer was looking to keep their monthly payments below the median one-bed rent, they’d have to drop their shopping price drastically.

Using the same mortgage rate (7.29%), down payment, and maintenance & HOA costs as above, a homebuyer can purchase a $585,000 home in Manhattan to keep the monthly payments at around $4,101

So, what are some of the options for a homebuyer who wants to buy and stay under the median rent? With the below, we will assume $125 for homeowners insurance, a 7.29% interest rate on a 30-year fixed mortgage, and a 20% down payment and allow a mortgage calculator to do the heavy listing…er lifting.

Upper West Side

Address: 415 Central Park W #1D

Rooms: 1 bed/1 bath

List price: $550,000

Type: Co-op

HOA Dues: $450

Taxes: None listed

Monthly payment: $3,589

Heavy on the amenities, this full-service pre-war doorman building with a beautifully restored lobby with stained glass, a 24-hour doorman, a live-in super, a windowed laundry room on the ground floor, a playroom, and a bike room is home to a 490sqft apartment with low monthly dues. While small on space, living on the park near 101st Street may be ideal, especially if one is looking to stay under the median rent for Manhattan and the Upper West Side ($4,208)

Yorkville (Upper East Side)

Address: 525 E 86th Street #1B

Rooms: 1 bed/1 bath

List price: $495,000

Type: Co-op

HOA Dues: $1,174

Taxes: None listed

Monthly payment: $4,008

Found in the cheaper cousin of the UES, this Yorkville 1-bed is located in a full-service building. With more seemingly more space than the Upper West Side option and some hefty closets, there is a bit more room to stretch your legs. The decor on the inside is a bit outdated, but nothing that can’t be spruced up.

Midtown Apartment

Address: 105 East 38th Street #1B

Rooms: 1 bed/1bath/home office

List price: $439,000

Type: Condo

HOA Dues: $1,657

Taxes: None listed

Monthly payment: $4,187

Farther downtown in Murray Hill, a Midtown neighborhood, is this condo in a landmark boutique building. There is a laundry room and an elevator, plus the unit has been updated. At 675 sqft, it’s larger than some of the other units explored.

West Village Apartment

Address: 56 Jane Street #1B

Rooms: Alcove studio(.5)/1 bath

List price: $549,000

Type: Co-op

HOA Dues: $1,035

Taxes: None listed

Monthly payment: $4,168

For this unit in a Pre-War elevator  West Village building, you are unable to get a true one-bedroom for around the median rent costs. The square footage is not made publicly available, but the unit looks small. For this, you are paying for location, not amenities or space.

Taking it out of the city: Astoria Condo Better Deal

In the summer of 2023, Astoria was named one of the hottest areas, with renters flocking to the neighborhood. New developments and unique businesses have made this area a desirable place, and some might argue that it’s more of a hotbed of culture than Manhattan. The real estate,

Address: 14-54 31st Avenue #5B

Rooms: 1 bed/1 bath

List price: $596,000

Type: Condo

HOA Dues: $281

Taxes: $243

Monthly payment: $3,915

The Sunrich Tower is a brand-new condo building with an elevator and is designed with contemporary architecture. At 505 sqft, the unit has sleek finishes, upgraded appliances, a washer and dryer in unit, large windows, and the ability to purchase a private on-site parking space.

In terms of worth over time, nearby, there is a one-bedroom unit at 14-33 31st Street estimated to be worth 20.85% more than when it sold in 2021. But don’t forget about those pesky closing costs that might make something not worth selling so soon.

How Buying in Astoria Compares to Renting

While above the median rent for the neighborhood (a one-bedroom is $2,800), this might be considered a more affordable option. However, it still pales in comparison to a two-bedroom apartment in the neighborhood that is also updated for the same price or a three-bedroom that is three times the size. With renting, there is also no worry of repair costs or smaller homeownership costs if something breaks or it’s time for an upgrade, or you just grow tired of the lifestyle.

The post Can you buy a Manhattan property under the current median rent? appeared first on CitySignal.

What’s in the new Universal Co-brokerage Agreement, and does any of it address commissions?  There are 5 distinct changes:

1.)  Commercial and retail spaces in a residential building may be listed in the REBNY RLS.

Normally, the REBNY RLS is only for residential listings (RLS == Residential Listing Service).  However, now these commercial units will be allowed in the RLS, however, they are subject to the same simultaneous advertisement rules.  If you do choose to include the listing the RLS, it must be done within 24 hours of any public marketing of the listing.  You may not put it in a commercial database for a week and then decide to widen the net using the RLS.  That would be a violation of the RLS cooperation mandate.

2.)  Coming Soon Listings

While not new for 2024, the Coming Soon listings will now be formally codified in the REBNY RLS Universal Co-brokerage Agreement.  Also, there are new rules clarifying that unsolicited offers received on a Coming Soon status listing should be presented to the seller.  However, prior to presenting any offers, the listing status must be changed to Active.

3.) Owner Opt-out Rules

Sellers and Landlords may now opt-out of the REBNY RLS by filling out some formal paperwork.  Why would they do so?  One reason would be to give a pocket listing and exclusive to the agent, but with strict instructions that they do not want any mass or public marketing done for privacy reasons.  It might be a way to give an agent a long-standing listing agreement without the pressure of accumulating a high days on market and giving the impression of a stale or undesirable home.

4.) Electronic Payments Formally Accepted

Acceptable forms of payment now include Zelle, Venmo, and other electronic funds transfers in addition to checks.

5.)  Decoupling Commissions for Broker Services

This is the big one.  It was already agree upon by REBNY in October and so far REBNY hasn’t felt like it requires any additional changes since the landmark Sitzer/Burnett suit.

First, there is no standard commission.  REBNY discourages any notion that there is a typical or mandated commission, and they are always negotiable.  Neither REBNY or the RLS fixes, controls, suggests, recommends, or maintains fees of any sort between cooperating participants on the RLS.

Offers of compensation, if any, to the buy side broker, must originate from the owner.

There is not, and never has been, a rule that REBNY prescribes a 50-50 split between cooperating brokers.  An older version of the UCBA had language that prescribes a 50-50 split only when the listing agreement between the listing broker and owner omitted any mention of compensation.  The latest version has removed these provisions.

The post REBNY Changes Their Universal Co-Brokerage Agreement appeared first on CitySignal.

Buildings are responsible for two-thirds of New York’s greenhouse gas emissions, pushing officials to scramble for sustainable solutions. Recent laws passed to curb emissions have created momentum for building green, and a looming 2024 retrofitting deadline has builders adjusting their plans to comply.  

Sustainability has become a popular topic, even in New York. At nearly sea level, in a region prone to hurricanes and storms, New York is more fragile than it would like to admit. Mayor Bill de Blasio, called the Climate Disaster Mayor, has enacted a number of laws to combat climate change, including the Climate Mobilization Act of 2019. While passing the act, De Blasio pledged to make New York City a carbon-neutral city by 2050 while reducing greenhouse gas emissions by 80%. Sustainable building is the path to this reality. 

Is NYC a Sustainable City?

Sustainable Building As The End Goal

Compared to the rest of the United States, New York is not doing poorly. With less greenhouse gasses per capita than any other city, New York is one of the most energy-efficient places in America. New Yorkers travel mostly by foot or mass transit, leading to a minimal transportation footprint, while in the United States, the majority of greenhouse gasses come from transportation, mainly single-passenger vehicles. Even so, any gains made through mass transit are quickly lost through the high-energy use of buildings. 

Multifamily and office buildings use 87% of the energy benchmarked for buildings. Half is in the form of electricity, with space heating, mostly by natural gas, as the largest end use. The US would save $20 billion in energy costs through green-improved buildings. Environmentally friendly design techniques, eco-friendly materials, and advanced technologies all save on both energy and money.

Among the laws passed within the Climate Mobilization Act is Local Law 97. This law requires buildings over 25,000 square feet to meet new energy efficiency and greenhouse gas emission requirements by 2024, followed by another set of more stringent requirements in 2030. Buildings that fail to comply will be issued steep fines.

Some folks were already prepared. A number of realtors and developers went green long ago. With “passive house” and LEED certification becoming selling points for the wealthy- this is likely a growing trend.

Sustainable Apartments and Homes in NYC

Sustainable apartments sound like a thing of the future. But people are seeking them out to reduce the overall carbon footprint. Real estate firms that list thousands of residences a month are seeing eco-friendly features on the rise- Douglas Elliman reports about 5% of listings include eco-friendly features. This number was zero in 2016.

Features like closed foam insulation, low-emission windows, solar paneling, sealed attics, energy-efficient utilities and heat pumps, and complex framing techniques all work together to reduce costs and save on energy. Not to mention green homes have higher resale value than regular homes.

Sustainable buildings are denoted through the coveted LEED certification, a globally recognized symbol, and standard of sustainability achievement and leadership. Another green term, “Passive House,” is an energy-efficient building using 1/10th the energy of a regular house. Known for being both practical and comfortable, these buildings are well-insulated, airtight, and maximize heating and cooling efficiencies to keep energy use at a minimum 

A number of green residential properties already exist. Manhattan’s first passive house was Perch Harlem, located at 542 West 153rd Street in Hamilton Heights. The building uses waste heat from appliances to warm the building, leading to a 90% reduction in energy use. 

255 Columbia Street, located in Brooklyn, was the first residential building to earn passive house status in the boroughs at large. This 13-unit condominium features triple-paned windows, mechanical ventilation, advanced insulation, and innovative heating and cooling technologies.

Another green building is 160 Schermerhorn Street, an 11-story, 116-unit building housing low-income members of the community. This building optimizes energy through a high-efficiency boiler, recycled building materials, and a rooftop garden to help with air quality and insulation.

New York City’s most sustainable condominium, Charlotte at the Upper West Side, has been turning a lot of heads lately. Located at 470 Columbus Ave, this eight-story seven-unit building is Passive House Institute certified. Other attributes include triple-layered windows, extra insulation, non-toxic finishes, and energy-efficient appliances. All marble has been locally sourced, and air within community spaces is UV treated.  

Last to look at is a Brooklyn property called Toren. Located at 150 Myrtle Avenue, this LEED Gold-certified building won certification for its rain screen system, basement cogeneration plant, and fresh air initiatives.

Sustainable Buildings

“We were doing sustainable development before there was investor pressure, but now there is investor pressure,” Sara Neff, head of sustainability at Lendlease, told the NYTimes.

Investors are beginning to prefer high-performance green assets. The effect of natural disasters on real estate has many aware of climate change. Over 88% of large companies have had at least one physical asset impacted due to extreme weather.

Sustainable buildings seem a vision of the future, but really, they’re popping up all around us! With technology continuing to advance, tenant emissions can now be offset through 100 percent renewable energy. Increasingly, sustainability is a core feature of financing plans as investors begin to request sustainable components for their projects.  

Sustainable buildings are constructed to conserve water, materials and energy. The common features of a sustainable building are close proximity to public transportation, all-electric components, and solar paneling. Metrics tools are also important, allowing customers to monitor and analyze performance while calculating how much energy and money are saved. Feedback is used by developers to continue optimizing technology. 

“Carbon counting and the focus on carbon will define the decade ahead, without a doubt,” said Dan Winters, head of the Americas region for GRESB, a real estate sustainability benchmark used to analyze $5.3 trillion in assets globally.

You might be surprised by who is green and who isn’t. Some of the greenest buildings in New York City include iconic giants such as the Empire State Building, the Bank of America Tower, and One World Trade Center. If these buildings have secured sustainability status- why aren’t others making the move as well?

The Empire State Building is LEED Gold-certified, one of the few National Historic Landmarks with this title. Recycled carpets, green cleaning supplies, low off-gassing wall covers, and ultra-low-flow water fixtures helped earn this certification.

When One World Trade Center won the LEED Gold certification in 2016, it became the tallest building in the Western Hemisphere also LEED certified. The building is skinned with insulated spandrel, allowing natural light into 90% of office areas, reducing light and heat needs. The glass is designed with low-E glass coating, minimizing heat gain.

The Bank of America Tower is LEED Platinum-certified, with an emphasis on daylight, fresh air, and other natural inputs. Broadway’s first green theater, run by Stephen Sondheim, is included with an urban garden room.

Co-Op That Embraces Food Waste And Recycling

Some buildings are combating waste in other arenas through food waste and recycling. Every residential building in New York City has to recycle and have recycling containers, per law. Buildings face a fine of several thousand dollars for non-compliance. Some buildings are taking that even further with food waste.

Morningside Heights Housing Corporation, a New York cooperative building at various addresses, including 100 and 80 La Salle, was selected to participate in NYC’s Organic Food Waste Recycling Pilot Program. Designed to reduce post-consumer waste and landfill occupancy, the pilot was a major success. Convenient, on-site scrap collection reduced the building trash load by 35%.

Food scrap containers were made available to residents for free, allowing the Department of Sanitation to collect food waste and turn it into renewable energy and compost. Officials are looking at expanding this program throughout the city and teaching residents how to reduce their waste. 

The Downtown Alliance Compost Program, operating in Manhattan, features 10 public compost pins around the city. With 24/7 access to composting, residents can sign into an app to unlock the bin. Each food scrap donation moves us slightly closer to a sustainable future.

Ways You Can Help Improve Energy Efficiency

Not everyone has the resources to move into a sustainable building- some of them are quite expensive! If you’re a New Yorker looking to reduce your carbon footprint and contribute to the cause- here are three ways you can reduce energy consumption within your home:

• Improve heating- through refurbishing or replacing steam heating systems.
• Reduce AC energy loss- Repair window and wall leaks surrounding AC units to reduce heating and cooling expenses.  
• Efficient Lighting- Investing in newer, energy-efficient light bulbs and light systems reduce can drastically reduce the amount of energy spent.

Every little bit helps. Any investment towards sustainability now will be money saved in the future. “Today, you don’t sacrifice returns for sustainability, you create returns with sustainability,” added Stephen Tross, CIO at Bouwinvest, a Dutch investment firm. Perhaps LEED and passive house status will become the benchmarks of the future.

Now, how do we get rid of plastic bags?

The post Sustainable Real Estate In NYC Makes Everyone Green appeared first on CitySignal.

According to YIMBY’s Q1 Report, permit activity in Q1 and Q2 were very similar, with only 5 more filings in the first quarter compared to the second. So far, monthly construction permit filings this year are almost twice as high as monthly levels from 2021. It’s also worth noting that a strong Q2 performance proves that positive outcomes in Q1 weren’t a short-lived trend. 

The first six months of 2022 signal a strong uptick in future construction in the Big Apple, and a broader resurgence in a city that was walloped by a declining population, shuttering businesses, and reduced tourism during the Covid Pandemic. 

Q2 Data by Borough

In Q2, Queens led the pack with 309 permits, while Brooklyn came in second with 238. Staten Island was third with 161, followed by The Bronx with 117. Manhattan was in last place by far, with only 32 permits. 

Manhattan had a low number of permit filings in comparison to other boroughs because of its high density. In fact, the average floor area per permit filing in Manhattan was 55,862 square feet, almost three times as high as the Bronx, which was second place at 19,077 square feet. Not surprisingly, Staten Island had the smallest average floor area per permit filing at 4,490 square feet, since most new construction in the borough consists of single-family homes or small multifamily buildings. 

Some of the most enlightening data from YIMBY’s Q2 report are the total residential and hotel units filed per borough. As the most populous Borough, it’s not surprising that Brooklyn came in first with 3,162 units. However, on a surprising note, The Bronx was just behind at 3,115, beating out more populous boroughs Queens (2,303) and Manhattan (1,016). Staten Island was in last place with 401 units filed. 

The Bronx and Manhattan have similar populations, but the former had three times as many residential and hotel units filed during Q2. With the expiration of the 421a affordable housing tax credit, developers may be more reluctant to build new housing in more expensive areas of the city like Manhattan. Developers are likely more keen on The Bronx because the land is cheaper there, which offers potentially greater returns on investment.

New Residential and Hotel Units Fall Significantly in Q2

While the total number of permit filings held steady between Q1 and Q2, there were significantly fewer new residential and hotel units included in those filings during the latest quarter. The decline was steep, falling from 19,337 to 9,997. The only borough to hold steady in the category was The Bronx, with 3,115 units compared to 3,160 units in Q1. Every other borough experienced a substantial decline. 

The Bronx really punched above its weight in this category, recording around a third of Q2’s new residential and hotel unit filings despite only having about 17% of the city’s population. 

Unfortunately, residential development in NYC as a whole isn’t keeping up with demand — and demand for housing in the city is very strong. The apartment vacancy rate in Manhattan declined from 7.59% in May 2021 to 1.55% in May 2022. Additionally, between May 2021 and May 2022, median rents in Manhattan grew 25%, while Brooklyn and Manhattan rents grew by close to 20%.

The post NYC Permitting Activity In Q2 Was Almost Twice as High as it Was in 2021 appeared first on CitySignal.

Rent in the United States continues to soar. According to the Yardi Matrix June 2022 Monthly Report, national rents rose an average of 13.7% between June 2021 and June 2022. New York City experienced one of the highest rent increases during that time period — from May 2021 to May 2022, rents in Manhattan appreciated 25%, while Brooklyn and Queens grew close to 20%. 

New Yorkers already know that their city is the most expensive in America, but the new Savills Prime Residential Index report confirms that the Big Apple is also one of the most expensive cities in the world, with rent continuing to outpace wages. The index, which tracks rents in 30 large world cities, found that New York was tied with Singapore with the largest rent growth of the major urban areas included in the report, at 8.5% during the first half of the year. 

Over the last two and a half years, Americans began to move to smaller cities and suburbs as demand for more space grew in the wake of the pandemic. Current rent growth in New York is largely a byproduct of residents moving back to the city once Covid restrictions lifted. High demand and a lack of adequate rental inventory are also issues pushing rents in New York City up higher. The Savills report notes that since summer is usually the strongest season for rentals, tenants could face an even higher amount of demand in Q3, with lowering vacancy rates. 

Among the 30 cities, rents climbed an average of 3.1%. In addition to NYC and Singapore, London, Lisbon, Miami, and Los Angeles rounded out the top 6. Miami rent growth was around 5.8%, while Los Angeles grew about 5.4%. Two cities, Mumbai and Geneva, experienced no rent growth, while rents actually declined in two major urban areas — Shenzhen and Hong Kong. In Hong Kong, the city with the highest decrease, rents fell by more than 1.0%. 

Two-thirds of the cities that Savills tracked now have rents that match or exceed pre-Covid levels. NYC, Los Angeles, and Miami meet these criteria, while San Fransico lags behind others in terms of rent growth. According to RentHop, rents in New York has surpassed the pre-pandemic level. Between March 2020 and July 2022, the median one-bedroom rent has risen over 26%. The median rent for a one-bedroom in San Francisco in March 2020 was $3,250. As of the end of July, it is around $3,340.

Paris and Amsterdam are the only two out of the eleven European cities tracked that haven’t yet returned to pre-pandemic levels. In Asia, only half of the monitored cities have returned to levels seen before Covid, but results vary across the continent. Dubai and Kuala Lumpur experienced high rent growth, along with Singapore. 

Major Chinese cities fared among the worst on the index. All four Chinese cities, Beijing, Hangzhou, Guangzhou, and Shenzhen ranked in the bottom eight. Hong Kong, a Special Administrative Region controlled by China, was also in the bottom eight. However, Hong Kong is still the most expensive of all cities tracked by Savills. 

The post NYC Rent Growth Tied For Highest In World appeared first on CitySignal.

The past couple of years haven’t been easy on first-time homebuyers. From being unable to view homes in person due to health restrictions, to having homes go off-market before buyers could even get an offer in, first-time homeownership has never been harder to achieve. 

According to data obtained by Fortune Magazine, the typical home price has increased 20.3% year-over-year. This comes at a time where inventory is scarce and homes are staying on the market for an average of just 18 days. 

Realtors in today’s increasingly competitive market know it’s better to set realistic expectations from the beginning than to promise results they aren’t likely to deliver. 

Putting thousands of dollars towards non-refundable fees and offering tens of thousands above asking price are some of the harsh realities prospective buyers must face to even have their offers considered. 

Difficult buying conditions are partially due to low housing inventory, but they’re also a reflection of a growing market trend—investors putting in hard-to-deny cash offers on homes and then turning them into rentals. This tendency is said to further exacerbate the shortage of available properties for first-time homeowners, but perhaps we should take on a different perspective. 

Real Estate Investors Buy Up Home Inventory

According to Nadia Evangelou, Senior Economist at the National Association of Realtors, close to 2.5 million households shopping for their first home will be shut out of the market this year, amounting to 15% of all first-time homebuyers.

“The more that investors buy up entire communities and turn them into rentals — people don’t have a choice anymore,” says Sarah Ortiz Hilton, a real estate agent who moved from New York to North Carolina in search of a more affordable market. “They either can’t afford to buy anymore, or there’s nothing to buy.”

In the fourth quarter of last year, real estate investors bought up a record 18.4% of homes sold in the U.S—up 12.6% from 2020. Even relatively affordable regions in the Sunbelt are experiencing intense shortages due to corporate influence. 

In Charlotte and Atlanta, investors claimed more than 30% of homes for purchase from October to December of 2021. In Jacksonville, Vegas, and Phoenix, real estate investors bought just short of 30% of available home inventory.

Companies such as Zillow have arguably played a major role in funneling available homes into the hands of investors. Late last year the real estate giant had to offload $2.8 billion worth of houses onto investors after the company reportedly “bought too many.” 

Although Zillow had the intention of buying up property and selling it to prospective homeowners and landlords, its ambitious plans came to a halt when the company found itself with an excess of inventory and not enough conventional buyers to sell to. 

In an effort to make up for its losses, Zillow decided to sell more than 7,000 of its excess housing inventory to “institutional investors.” Although the real estate browsing app still lost half a billion dollars in home value, it wasn’t left with much of a choice after its house-flipping side of the business came to a standstill.

Skyrocketing Rental Prices Further Hinder Chances at Homeownership

As investors continue to dominate home purchases in areas where first-time homeowners are looking to buy—or renters are looking to simply live—it’s obvious who gets the short end of the stick. 

In places like Tampa, where the average studio apartment is renting for 30% more than what it was just a year ago, aspiring homeowners are starting to lose hope. 

“No one is taking into consideration the people who are really trying to live and not just make this a vacation home, or an extended home. We actually live here, and we can’t afford it,” says Crystal Robles to ABC News Tampa Bay. Robles is a Tampa resident in search of a new apartment. 

With rent increasing faster in Tampa than almost anywhere else in the country, it’s hard to believe that in 2019, the city was one of Florida’s most affordable places to live. Currently ranking 4th in the U.S. for the worst change in renting affordability, that’s no longer the case. 

However, it’s worth noting that there are different kinds of real estate investors. Various studies have found that corporate landlords are worse for renters than smaller landlords. Large corporations are more likely to raise rents, evict their tenants, and poorly maintain their properties. 

In 2018, the Department of Housing and Urban Development found that corporate owners in Atlanta were 68% more likely to file eviction notices than local landlords. 

Local landlords Are Better For Renters Than Corporate Owners

It’s hard to say beyond a shadow of a doubt that real estate investors are robbing first-time buyers of their chances at becoming homeowners, when many of these investors are actually local landlords operating under an LLC.

While corporate landlords tend to be more demanding of their tenants, local landlords are often more forgiving, allowing for stable price increases that don’t overwhelm renters. 

For tenants in the process of saving up for a down payment, this consideration on behalf of landlords makes a major difference in their financials and ultimately, their ability to own a home.  

Tenants Pressure Landlords

Local municipalities across the country have taken it upon themselves to combat the encroachment of corporate buyers in their neighborhoods. Tampa residents have requested landlords notify their tenants of rent increases a minimum of 6 months in advance. 

In certain communities throughout Charlotte, homebuyers are required to live in the unit for a year before renting it out, similar to laws in New York regarding subleases. Although this specific measure has been enacted in favor of renters aspiring toward homeownership, some industry officials have described these efforts as discriminatory toward renters. 

“Why should a young family who is not in a position to buy a home for whatever reason be prevented from living in a neighborhood that is close to schools, close to jobs, and other neighborhood amenities?” says David Howard, executive director of the National Rental Home Council. 

“Companies are coming in and trying to satisfy demand [for rental homes]” he adds. He also mentioned that large corporations are doing their part to address supply shortages by building new rental home communities from the bottom up, wielding resources the average local landlord simply does not have. 

These differences in opinion point to perhaps a bigger issue at hand—the ability to live in a better community and enjoy access to quality neighborhood amenities. 

Residents Struggle To Stay In Their Ideal Zip Codes, Regardless If They Rent or Own

Homeownership offers many Americans the opportunity to build wealth and establish long-term stability. However, it’s worth noting that homeownership is not right for everyone at all times. Sometimes renters aren’t in need of a home nor in a position to buy one, they simply need to live in a certain area for an extended period of time. Such is the case Jameisha Wilkes shared with the New York Times.

After months of searching for a home that would keep her close to her mother’s house, her job at a food services warehouse, and her daughter’s therapy for autism, Wilkes gave up and decided to instead rent a one-bedroom within the zip code she preferred. 

Having only been approved for a mortgage of $180,000 in a neighborhood where homes start at $300,000, her chances at becoming a homeowner this year were unfortunately slim. However, her goal of living close to her job, child’s doctor, and mother’s house was achieved. 

Ms. Wilkes’ decision to rent in her ideal neighborhood while saving up for a home speaks to the importance of living in a community that caters to your needs. Ultimately, this is what first-time homeowners are looking for when searching for a house. 

If landlords can find a way to meet renters’ needs at a reasonable price point, then perhaps there’s an alternate solution to the housing crisis, one that doesn’t involve pressuring renters into a home they can’t afford. 

The Rent Guidelines Board in NYC Recently Voted to Increase Tenants’ Rents

Perhaps the housing crisis is felt nowhere more strongly than in New York City, where the median rent for a 1-bed has reached $4,000. The RGB, which is made up of nine mayoral appointees, cast a preliminary vote to increase rents up to 6% last month. Out of the two tenant advocates, two landlord advocates, and five members appointed to act on behalf of the general public, a total of five board members voted in favor of the proposed hikes. 

If approved in the final upcoming vote, one-year leases could increase between 2 and 4% while two-year leases are looking at a 4 to 6% increase. These percentages mark the biggest margins in nearly a decade and would affect the city’s 2.4 million rent-stabilized tenants living in 940,000 apartments across all five boroughs. A third of these tenants are estimated to learn less than $40,000/year for a family of four. 

The last time stabilized rents rose was in 2013, when one-year leases went up 4% and two-year leases saw a 7.75% increase. After almost a decade of Mayor Bill de Blasio’s tenant-friendly RGB and a year and a half rent freeze due to the pandemic, to say NYC landlords are frustrated would be an understatement. Landlords are pointing to increases in the cost of fuel, maintenance, and insurance as reasons for struggling to break even on their rental properties. Many argue that the proposed rent increases aren’t steep enough. 

“These preliminary ranges have proven our biggest fear – that the RGB continues to believe its duty is to operate solely as an affordability program for tenants,” said Joseph Strasburg, the president of the Rent Stabilization Association. “The process is not meant to provide rent relief to tenants – that’s government’s job through subsidy programs – which is why the RGB must now consider the highest end of the preliminary ranges so that owners can meet across-the-board increases in inflation, property taxes, water bills, and heating oil and other operating costs.” 

President Biden Announces the Housing Supply Action Plan

In response to a housing market that is increasingly out of reach for buyers, the federal government has decided to act by releasing the Housing Supply Action Plan. The plan is intended to alleviate the burden of housing costs for Americans across the country by improving the supply of quality housing in every community. 

Over the course of five years, a combination of legislative and administrative actions will help close the housing supply shortfall we’re seeing today. This starts with the preservation of existing affordable housing units and the creation of new ones over the first three years laid out in this plan. 

While building and preserving rental housing for low-and moderate-income families is a priority, it’s not clear whether this will actually help them attain homeownership or further exacerbate the housing crisis. Rental units are profitable ventures for real estate investors and there aren’t many policies limiting just how many of these properties investors can accumulate. 

Rental subsidies and the building of new affordable units may help alleviate the cost of living, but it won’t solve the underlying issue of unattainable homeownership unless real estate investor activity is regulated.  

The post First-Time Homeownership Increasingly Difficult for the Average American Family  appeared first on CitySignal.

The median rent in the borough grew from $3,195 in May 2021, to $4,000 in May 2022, a 25.2% annual increase, but not all regions of the borough are the same. The median rental price is $4,495 in Downtown Manhattan, $4,200 on the Westside, $3,750 on the Eastside, and $2,500 in Northern Manhattan. Rents in Northern Manhattan, the cheapest region of the borough, grew 11.1%, while rents in other regions grew close to 30%. 

Rental prices for studios and one-bedroom units appreciated by 26.3% and 25.0% respectively, much higher than two bedrooms (15.4%) and three bedrooms (8.4%). Higher rental increases among studios and one-bedrooms suggest that rental demand in Manhattan is primarily driven by single professionals, as opposed to families or larger households. 

A lack of adequate housing units is a clear culprit for Manhattan’s rapidly rising rents. In May 2021, the borough had a vacancy rate of 7.59% with 19,025 available listings. In May 2022, the vacancy rate dipped down to 1.55%, with only 5, 776 available listings. Because of low vacancy, rental homes are on the market for an average of only 52 days, down from 107 a year prior. 

Because of low vacancy and high demand, landlords can charge high rents with few concessions. The Douglas Elliman report found that, when factoring in diminishing concessions from landlords, effective rents in Manhattan are up a staggering 29.8% compared to last year. 

The report also revealed data for Brooklyn and Northwest Queens. In Brooklyn, the median rental price is now $3,250, up 18.2% compared to a year prior. Listing inventory is down a staggering 78% from last year, from 13,410 to 2,954, causing headaches for prospective renters in the borough. Northwest Queens isn’t any better. Median rents there are up 19.6% to $2,950 and listing inventory is down 87.5%. 

How to Save on Rent or Negotiate Your Lease Terms

New York City has the most expensive and competitive rental market in the country, so residents need to know how to save on rent. The most obvious answer is getting a couple roommates, as it lowers costs. On top of that, rents on two and three-bedroom apartments didn’t grow as fast as rents on studios and one-bedrooms. Taking a macro view of all the neighborhoods and their average rental prices can also give you an idea of where to find a good starting point to find a place that fits your budget.

Negotiating favorable lease terms will be tough in this market, as landlords don’t have to offer up many concessions to lease their space. However, the average rental listing still sits vacant for about 50 days, so a landlord may be willing to offer up some concessions or slightly reduced rent if a tenant negotiates once their lease is up. The landlord won’t want their apartment to go vacant, but even quality tenants won’t have much negotiating power. 

Another option is offering to sign an extended lease, such as a two year agreement. Tenants may be able to reduce their rent a bit with this method. Of course, having a solid credit score and consistent income will only work in your favor.

The post The Median Rent in Manhattan is $4,000, Up 25% Annually appeared first on CitySignal.

Redfin also found that the number of homebuyers touring and offering on homes experienced its largest annual decline since April 2020, just before home prices began to skyrocket. The Redfin Homebuyer Demand Index, which tracks the touring and offering data, found a 12% year-over-year decline in requests for tours and other home-buying services. Searches for “homes on sale” during the week ending May 21 were down 13% compared to last year. 

Additionally, touring activity from the first week of January through May 22 was 29 percentage points lower than the same period in 2021, according to ShowingTime, a home tour technology company. Mortgage purchase applications were also down 16% from a year earlier. 

The data and verdict are in. Significantly fewer Americans are searching for a home to buy, touring a property, offering on a house, or applying for a mortgage. The comparatively low number of home tours, searches, mortgage applications, and offers is due to a combination of high mortgage interest rates and asking prices that make homeownership out of reach for too many Americans. Redfin researchers say that the latest data suggests that home prices may finally start stabilizing and appreciating at a normal clip. 

“The picture of a softening housing market is becoming more clear, especially to home sellers who are increasingly turning to price drops as buyers become more cost-conscious under higher mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “For now, mortgage rates have stabilized, and I expect prices to do the same. This will remove some uncertainty for buyers. That means that as long as a home is priced conservatively, it still has a good chance of selling quickly.”

Americans increasingly can’t afford a home. According to Redfin, the median home sale price was up 16% year over year, a staggering and unprecedented rise. For newly listed homes, the asking price grew an even greater 18%. Home prices aren’t the only factor pushing up the cost of purchasing a home. The average interest rate on a 30-year fixed-rate mortgage is now around 5.1%, a substantial rise from the 2.95% interest rate from last year. 

High home prices and high-interest rates worked together to push up the average monthly mortgage payment by 42% compared to a year earlier, from $1,708 to $2,425.

The post The Housing Market May Be Cooling Down, According to a Redfin Study appeared first on CitySignal.

Nevertheless, it is also clear that markets have been “heading towards a recession”—at least in the eyes of most economists from all sides of the spectrum—many times before, and everything ended up being alright. So, before you start liquifying your current assets, it will be important to take a closer look at some of the most important financial and economic stories in the news.

Let’s take a closer look at what has been going on over the course of the past week, and how these developments might directly affect your financial well-being.

Federal Reserve Formally Raises Rates

Bounded by its “dual mandate”—to simultaneously minimize unemployment and also minimize inflation—the Federal Reserve decided to raise interest rates by half a percentage point.

While many economists and financial analysts have been expecting this decision for quite some time, the official announcement which was made last week was immediately reflected in other components of the economy.

Whenever the Federal Reserve, currently headed by Chairman Jerome Powell, decides to raise rates, the cost of borrowing will increase, which affects consumers, lenders, homebuyers, and pretty much every other participant in the broader economy. The decision was, as the Fed helped explain in its most recent meeting, fairly logical and unsurprising—unemployment is currently very low and inflation is currently very high, which is usually the prime moment for raising rates. Nevertheless, the economic fallout that results from this decision will likely be felt by nearly all Americans.

NASDAQ Experiences a Terrible Run

The NASDAQ 100—a composite index that includes some of the largest tech stocks in the United States—just completed its worst three-day run since 2020, losing more than $1.5 trillion in value in less than 72 hours.

The most dramatic drop of the tech-dominated index—which includes several multi-trillion dollar companies, like Apple, Microsoft, Amazon, Tesla, and Alphabet (Google)—occurred on Monday, which included a stunning value drop of more than 4 percent. During the most recent downturn, these stocks have collectively lost about 10 percent of their total value.

In total, the NASDAQ 100 Index has lost about 25 percent of its value since the beginning of the year, which has created a sort of snowballing effect as many high-cap investors begin looking for more stable investment options.

It wasn’t just the NASDAQ 100 that saw a sharp drop following the Fed’s announcement last week. The S&P 500 also experienced a 3.2 percent drop, pushing it below the elusive (though arbitrary) 4,000-point cut-off. Keep in mind, markets are typically overreactive to developments in the news, so it is quite possible that some of these losses will be reversed within the week.

United States Commits More Resources to Ukraine

The ongoing war in Ukraine has exhibited a few signs of a possible peace deal but, at least in most cases, continues to escalate. As part of its commitment to helping Ukraine defend itself from the Russian invasion, the United States has committed an additional round of funding to the war effort, with more support expected in the near future (pending congressional approval).

As the war rages on, the United States is contributing an estimated $100 million per day in aid, which consists of a mixture of humanitarian aid (including food) as well as military weapons. Currently, nearly $40 billion in aid is waiting to pass the House and Senate. Supporters of the aid package claim it is necessary in order for Ukraine to defend itself against a much larger force. Opponents claim the package is wasteful and might inadvertently escalate the war. Regardless, it is clear that these financing efforts will have an impact on the global economy.

Gas Prices Back on the Rise

After what appeared to be a brief period of relief, gas prices have once again jumped to record highs. As of Tuesday, May 10, gas prices across the nation are averaging $4.37 per gallon, just a little bit higher than the previous highwater mark of $4.33 which occurred on March 11.

High gas prices affect not only people who are driving but also the cost of most goods and services dependent on transportation. In addition to the ongoing conflict in Ukraine, the current high prices are also likely a result of inflation and supply restrictions introduced by OPEC.

Mortgage Rates Reach Post-Recession High

During a period when the costs of most goods and services have been on the rise, mortgage prices are no exception. According to the Federal Reserve, the average price for a 30-year fixed-rate mortgage is now sitting at 5.27 percent—the highest it has been since 2009. This also represents a significant jump from the market’s all-time low point, less than 3 percent, which occurred in the fall of last year.

Increased mortgage rates have made it significantly more expensive for prospective homeowners to purchase a home—a two percent increase for a $300,000 home can increase monthly mortgage payments by more than $500. However, due to the existence of a genuine housing shortage (and other factors), it appears that the current market is in a very different position compared to the 2007-09 housing crisis.

While none of these trends seem to be present much of a reason for optimism, there is still a lot of time for things to change before anyone should declare we are experiencing a recession. Still, be sure to follow up next week and stay tuned to the most important economic developments.

The post Market Update: May 11, 2022. Gas, Inflation & Rates On The Rise, Market Down. appeared first on CitySignal.