By Diana Olick @CNBC
If you are a first-time renter or looking to upgrade to a bigger, newer apartment, now may be your best chance.
Demand for rental apartments fell short of new supply by about 100,000 units nationwide, according to RealPage, a real estate analytics firm. Apartment occupancy is still high, but it is softening a bit, dropping to 94.5 percent in the first quarter of this year, compared to 95.1 percent at the end of 2016. Occupancy has been falling for the past six months.
“There are lots of available units at just-completed projects,” according to Jay Denton, vice president of RealPage’s Axiometrics business group. “Also, top-tier existing projects are losing performance momentum for the first time in this market cycle. Some renters from established luxury projects are opting for the newest deliveries in order to take advantage of rent discounts often offered during the initial lease-up process.”
In New York City, where luxury apartments have been going up at a fast clip since the recession, landlords are increasing both amenities and concessions. The share of rentals with landlord concessions set a new record at the start of this year. Over 30 percent of New York landlords offered concessions, with the heaviest use within 2-bedroom apartments, according to Jonathan Miller, of Miller Samuel, who provides monthly reports for real estate broker Douglas Elliman.
Most of the concessions are monetary — a month or two of free rent — but others are more creative.
“What we’re seeing more of now is discounted deposits in addition to free months of rent. You only have to put down $500 or $1,000 deposit. It impacts what people are looking at, and that sweetens the deal for a lot of people,” said Gabby Warshawer, director of research for CityRealty.com, a New York City real estate listings and analytics company. “There are also stray offerings for gift cards — a $1,000 MasterCard gift card when you sign the lease or, in some cases, free access to the building’s amenities package.”
While concessions are hitting the luxury end, rent growth is still relatively strong moving down the rent scale. Pricing is strongest in the middle-market, so-called Class B properties, which tend to be older b