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Consumer Confidence Continues to Drive Rent Prices
If you were planning to live off-campus this year, think again. According to Bond New York, New York City's largest growing, independently-owned residential brokerage, rent may soon become even more of a monetary burden.
Rent is expected to increase from 6 to 10 percent for current tenants and from 8 to 12 percent for new vacancies. On average, overall rent in Manhattan is expected to increase by 8 to 10 percent in 2012.
Based on a four-year study of Manhattan's rental market, Bond released a report predicting a rise in Manhattan rent prices in the coming year. The study drew its data from quarterly patterns in pricing since 2008 using statistics from Bentley, Bond's proprietary listings database.
The report shows Manhattan's rental market pricing progress from historic lows in 2009, as a result of the financial crisis, to its gradual push toward stability in 2010. In 2011 it surged to record highs, exceeding pre-financial crisis levels. From these trends, Bond concluded that prices would continue to rise in 2012.
"We weren't really surprised [with the results] because we have seen prices rise steadily over the year, so it's just a continuation of that trend," Bond agent Noah Freedman said.
Bond attributed the rent increase to the job market in New York City and to consumer confidence in one of the most expensive places to reside in the country.
"A continued robust job market in Manhattan [fuels] high demand for apartments throughout the city," Freedman said. "The broad perception among landlords is that more and more people will be coming to the city to work, which will push our already historically low vacancy rates to an even more critical mass."
However, Stern professor Stijn Van Nieuwerburgh said this expected rent increase might affect the relationship between not only residents and landlords, but also employers and employees.
"If this trend continues and this kind of rent increase, in fact, materializes, the city should allow for more construction of apartments to keep housing affordable for its residents and employers will have to pay more to keep attracting workers to New York City," he added.
Evelyn Cheng, a CAS sophomore who lives in her own apartment on 1st Avenue, expressed concerns for off-campus students.
"An increased rent will probably force me to move farther from campus or commute from Long Island because my family can't afford it," Cheng said.
Given the continuous trend of increasing prices, now may be the best time to get an apartment, according to Freedman.
"My best advice to a prospective tenant is to get an apartment sooner rather than later, if possible," he said. "[The] longer you wait, the more you will have to pay for your apartment."