In Manhattan, fewer seeking shelter
The economy hasn't spared New York's real estate market: Vacancies are rising even as home and apartment prices are dropping.
Reporting from New York — It's another slow Friday morning inside the sunny, 4,000-square-foot Manhattan office of Best Apartments Inc. when the first potential client strolls in.
Senior real estate agent Kevin McGraw zeros in on the apartment-seeker, who has just visited three tiny studios that McGraw's real estate firm is offering in the $1,500-a-month rent range. McGraw, 40, an easygoing, blue-eyed actor, hasn't had a lease signing all month.
With apartment prices dropping across the city, McGraw knows now is the time to make deals. He'll ask the landlord to shave another $50 off the rent, McGraw tells the client, "if you jump on it now -- like, today."
The client fidgets, unconvinced.
Despite the river of people hankering to live in Manhattan -- where apartment prices have tripled in the last decade -- the real estate market here has not been spared the country's economic woes.
New York lost nearly 14,000 private-sector jobs in October, and across the city out-of-work tenants are breaking leases and moving out of Manhattan, real estate agents say, as landlords lower rents and fees, and sellers lower condo and home prices.
The city's rental vacancy rate has doubled to nearly 2% since this time last year, according to a report by CitiHabitats. That might not seem like much elsewhere, but this is New York.
CitiHabitats, a New York real estate firm, and experts expect that vacancy rate to grow. With fewer jobs, fewer people are moving in, creating fewer clients for brokers.
In addition, banks are holding back loans to local developers, and new construction has slowed while the prices of homes have dipped.
But the real estate market has not yet slumped as it did after Sept. 11, 2001, says Howard Feingold, president of Best Apartments, who opened his company in the aftermath of the terrorist attacks. At the time, he remembers, "more people were leaving the city. It was a psychological thing. People were scared."
People are scared again. Those who live here and have decided to stick it out are bracing for what is expected to be an even tougher financial year, and across the city many are downsizing into cheaper rentals, according to leasing agents and companies.
Inside Best Apartments, which is housed in an old printing factory, Feingold's desk sits at the front of the vast and airy room filled with rows of black chairs and birch-colored desks.
