“New leases are only about a third of the market, and the new leasing activity you’re seeing now is down 70 percent year over year,” said Jonathan Miller, of the appraisal firm Miller Samuel. “Right now the market data is massively distorted. I think it’s pretty clear if you remove the distortion, rents are already going down.”
Landlords are often open to negotiation and price cuts — up to a point. Sudha Sahai owns a total of six furnished apartments in the East Village and Gramercy, which she typically rents by the month as corporate housing. When the pandemic hit in March, she listed one of the units, a one-bedroom in the East Village, for $6,000 a month with Bill Kowalczuk, an associate broker at Warburg Realty.
After the apartment sat on the market for a few weeks, Ms. Sahai told Mr. Kowalczuk to knock the price down to $5,500. A couple ultimately offered $5,000 for the space, which Mr. Kowalczuk negotiated up to $5,200, with the renters paying the full broker’s fee. “For monthly furnished I get more — so much more I’m not even going to tell you,” Ms. Sahai said. “I wanted it rented.”
Mr. Kowalczuk described that deal as a fair one, but said that many renters are being unrealistic. He’s been regularly fielding offers at 20 to 50 percent below asking prices. One opportunistic renter even tried to finagle a 10-year lease on the Gramercy Park townhouse Ms. Sahai owns, at a 70 percent discount.
A lot of landlords also feel that when real estate agents begin to show properties again during Phase 2 of New York City’s reopening plan — Gov. Andrew Cuomo said Wednesday that the city is set to begin Phase 2 on Monday — there will be a surge of pent-up demand. As brokers pointed out, landlords who have waited this long want to see that play out before cutting prices.
“It’s going to be a compression of a spring, summer and fall market,” said Jared Antin, the director of sales at Elegran, a New York brokerage. “If you were intending to move you’re still intending to move. We’ve actually seen bidding wars for some of our properties.” Among them was a three-bedroom townhouse in Prospect Lefferts Gardens asking $5,900 that garnered multiple offers after being on the market for just a day, he said.
But those who watch the market closely say that, as the economic recession sets in, prices will most likely fall, if not very fast and not by much at first. At least initially, people may not see big discounts, according to Mr. Miller, but general conditions convey a sense of weakness in the rental market.