If the sales market has more or less remained like Weakest Link, wherein buyers weather a barrage of insults and are left wondering where their money went, the rental market has become Millionaire, in which landlords throw a free month's rent, new stoves, and other lifelines at contestants who can't seem to get past the $32,000 question. "I've been doing this for almost ten years in Manhattan," says DJ Knight's Brian Kelly, "and in sales, I can tell you that things are building daily. But on the rental side, I'm seeing apartments that used to rent for $2,800 going for $2,300 on a great block in Chelsea, and they still have vacancies in the building."
Truth or Scare? Contrary to rumors, the whole rental market hasn't gone to pot; it's just growing soft around the middle. Prices are down 8 to 12 percent citywide, but keep your expectations low for deals on studios and large two-bedrooms. Harder hit have been the one-bedrooms and junior fours typically sought by young, well-financed dot-com, media, and banking professionals. The retreat of this particular cohort has coincided with an ongoing development boom that has introduced more than 3,000 units into the downtown market alone in the past five years. The effect -- especially in overbuilt areas like Chelsea, Hell's Kitchen, and Yorkville, or downtown areas that tenants have left in droves -- has been a quadrupling of vacancy rates, and prices that hark back to 1999.
The price is right: With its tree-lined streets and excellent subway access, Chelsea has the city's best deals. Six relatively new towers now occupy Sixth Avenue between 19th and 26th Streets, many offering up to 10 percent reductions (the Caroline, at Sixth and 23rd, is also throwing in a year's membership at New York Health & Racquet Club). And you can find even more deals west of Ninth Avenue and north of 25th Street. Richard Higgs, a manager at currency brokerage Prebon Yamane in Jersey City, found a newly renovated, 1,400-square-foot, key-elevator, two-bedroom loft at 521 West 23rd Street that had been on the market since late June. The original price was $7,000, but by the time Corcoran's Laura Wagner showed it to Higgs in November, the price had dropped to $5,500, largely because of the construction of yet more high-rises across the street. Though the place had a wall of ten-foot windows, a view of the river, a washer and dryer, and a great location near Gallery Row, Higgs managed to wrangle a $1,000 break on the rent, and then another $1,000 break for every month of construction.
Farther afield: Want character? Brownstone owners facing weaker demand in Brooklyn Heights and Park Slope are ready to talk. "Because they're so directly impacted by the loss of revenue, families are much more motivated to move quickly on the downside," says Victoria Negron of Corcoran's Brooklyn Heights office. Some owners have even begun to barter. "They'll throw in a fresh paint job, abandon their no-pets policy -- anything that can cause the deal to close," says Negron.
Buck Stops Here: In prime areas like SoHo, Greenwich Village, Gramercy Park, and Park and Fifth Avenues, one-bedrooms still rent for $2,600 a month, simply because current residents aren't leaving. Even more in demand are areas where the rents are already relatively cheap, like the South Street Seaport, Harlem, and Alphabet City. Not only have the newly frugal flocked to these neighborhoods, keeping demand high, but prices are so low to begin with that there isn't much wiggle room.
The outlook: Douglas Wagner, president of Benjamin James Real Estate, says that many management companies' offers to pay part of the broker's fee will end in March. Already, renters like Ethan Morris, a 27-year-old media supervisor for a direct-marketing company, are complaining about the ones that got away. "There was one other I liked more," says Morris, who just moved from his mom's place on the Upper West Side to a 1,000-square-foot one-bedroom that had been marked down from $2,300 to $2,000 on Remsen Street in Brooklyn Heights. He has a giant bay window, a fifteen-foot cathedral ceiling, an original fireplace, a new refrigerator, and six closets. But . . . "It's just that the other place was a two-bedroom and it had an elevator," he explains. "If that place was a 10, this place is a 9.5." JADA YUAN