One year ago, it was quite common for landlords to offer incentives or discounts to attract new tenants to lease the vacated apartments, but now that the vacancy rate is floating around 1 percent, the incentives and discounts are starting to disappear. Moreover, landlords are trying to justify rent increases. However, it is unlikely that the prices will move anytime soon because of the city’s report on the stagnant unemployment rate and increase in the vacancy rate in August. Landlords are also more careful with who their new tenants are because it is difficult to tell how long they will be employed for.
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Brokers and owners are hopeful that the market will become stronger in the 2011 when the inventory brand new apartments decrease significantly, causing a decrease in supply and giving favor to the landlords. Furthermore, it is important to keep in mind that the trends in each neighborhood, in New York City, are quite different. Renters might still be able to negotiate concessions or incentives in one area, while finding it quite impossible to fight off an increase in another.
This trend seems to follow the patterns of a self-fulfilling prophecy. The landlords are eliminating discounts, and pushing for rent increases because they feel the market will improve shortly; all the while, the employment rate is predicted to be stagnant for the next couple of years, and Wall Street banks have suspended hiring because of low volume trading and are even starting to lay off employees.
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