New York City’s real estate market boomeranged in the second half of 2021: Renters and buyers returned to the city and snapped up apartments. Thanks to that burst of demand, Covid discounts and concessions nearly evaporated as owners and sellers gained the upper hand. Now that Omicron infections are skyrocketing, it feels like New Yorkers are collectively holding their breath—waiting to see if we are in for another bad stretch.
Omicron is a major question mark, but there are some indications of what 2022 will bring: There will be less competition for rentals since the stampede of returning New Yorkers is largely over, although you can expect rents to continue to rise. And for tenants battered by job loss and unable to pay rent, there may be more federal funds and legislative protections.
Bidding wars for rentals may come back this summer
Robert Morgenstern, principal of Canvas Property Group, a property management company that owns 2,000 NYC apartments, says last year’s market was unique, but “this summer could be equally intense.”
He predicts offices will “continue to reopen after what we can only hope is a temporary spike of Covid.” That will draw renters back, but he says they’ll be hampered by a lack of apartments. Morgenstern blames the shortage of rentals to a lack of tax incentives for developers and changes to the rent laws that discourage landlords from deregulating apartments.
“We have seen the most demand for apartments in primarily residential areas where the retail and restaurant scenes are booming,” Morgenstern says. “We saw the market explode in direct correlation to the nightlife scene.” Neighborhoods like the East Village, Lower East Side and Williamsburg were “all thriving, while the type of building and amenity offerings seemed less relevant,” he says.
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