Waiting It Out
That, brokers say, is the core issue: Rich renters aren’t in the city, and rich apartment owners normally interested in cashing in on their empty apartments are willing to wait for the market to pick up.
“Normally, some of these people, if they’re renting, would have started looking in June or early July for a September rental so they could be in place for when their kids come back to go to school,” says Bill Kowalczuk, a broker at Warburg Realty. Most of his clients who rent an apartment for $30,000 a month rather than buy a $6 million apartment, he says, “are in finance. They can make their millions grow faster in the market than if the money is sitting in real estate.”
Now some of these clients are waiting “until their private school tells them what the rules are going to be. If they’re going to continue online education, they’re going to stay put [in the country],” he says.
Clients without school-age children are also waiting. “It’s not like you can go out to go shopping, or go to the theater,” he says. “You can’t do anything, so why bother coming back?”
The owners of top tier rentals, Kowalczuk continues, have no interest in letting their listings languish on the market. “The longer it sits,” he says, “the less likely you are to get an offer close to asking price.” A few clients have removed their listings; others are waiting until people return to Manhattan for work or school.
Lower Prices
The apartments that have listed are often dramatically lower in price than last year. Seven of this year’s top 10 rentals are below $50,000 a month; none of last year’s 10 was below $65,000, according to StreetEasy data.
In 2019, the top 10 rental apartments during the time period from March 22 to today ranged from $256,000 a month, for a 6,000-square-foot, 56th-floor furnished penthouse at 56 Leonard Street, to $65,000 a month for a furnished penthouse at 45 East 66th street advertised as a “private modernist oasis.”
This year’s top listing is listed at a comparatively modest $125,000 a month for a furnished, 7,241-square-foot penthouse at the Puck Building in SoHo, which has an additional 5,158 square feet of outdoor space. The cheapest of the top 10, according to StreetEasy, is a penthouse at 400 Park Avenue South in the NoMad neighborhood that’s listed at $39,500.
Even those lower prices might not be enough.
Kowalczuk says he had some listings in that price range, but he removed them. “People were making really dumb offers,” he says. “I had a whole townhouse listed for $24,000, and I was getting offers between $12,000 and $15,000.” He decided, he says, “to take it off the market. We decided to wait until there are actually bodies back that really need to move.”
This article was provided by Bloomberg News.