Property Grunt

Tuesday, September 06, 2005

Everybody relax. It is just that time of year

This was from Curbed.

Scary Real Estate Trends: Rental Bidding War
Tuesday, September 06, 2005, by Lockhart

While the immediate future of the residential sales market is murky, it's good times for owners looking to rent out a flat. Blogger Callalillie reports on a recent hunt for a new rental apartment in Park Slope:

We began the day visiting an open house in Park Slope-- a beautiful 2BR brownstone floor through, nicely renovated with a great kitchen. The price was right, but when we got there, we realized that swarms of people had visited and that there would most likely be a rent bidding war... End Result: Nothing is really available over this Labor Day stretch. Furthermore, since when do bidding wars happen with RENTALS?
Yikes. Hey Grunt, any intel on this phenomenon?

Below is my answer.

Tell everyone to chill out and cut down on smoking so many bowls. That is what is getting everyone paranoid. What Callalillie experiencing is perfectly normal for this time of year.

First of all this is one of the heights of the rental season due in part to students coming to the city and people coming back from vacation. So the demand is definitely there.

As we all know, beginning last year there was a chain reaction from the insane residential market. Because prices were so high alot of buyers decided to sit this one out until things cooled off. This was great news for rental brokers because the assumption was that these buyers would now become rental clients. There was one problem. Alot of buyers simply resigned their leases which resulted in a huge lack of rental inventory on the market which became evident when the spring arrived and ton of rental clients entered the market but it was slim pickings all around.

Landlords are definitely enjoying this bounty and have turned the tables on clients. This has forced clients to become more creative in their housing needs. Which means expanding their search to other boroughs.

Although I do not do business in Brooklyn I have frequented the area many a time and I have noticed a significant number of young people who live and enjoy themselves in the area. So I am not surprised that Callalillie is experiencing this type of commotion. Manhattan is just too damn expensive for the majority of us. Besides they have better pizza in Brooklyn that is definitely worth the 2 bucks.

Do rental bidding wars occur? Yes. If a landlord gets a group of very qualified clients then clients have to step up to the plate and offer more to the landlord. Some clients just offer a higher rent outright in order to secure the apartment.

Is this always the case? No. Sometimes the landlord will take the first qualified person they can find because they do not have the time or patience to go through all those applications.

I strongly advise Callalillie to keep looking because they might find that deal. Even though there is a ton of demand in Park Slope, a landlord will get a ton of applications that are chock full of bad credit reports or idiot clients who attempt to haggle over the rent despite not having a leg to stand on. If you have excellent credit, a secure job and do not play games with your landlord you should be fine.

You could also wait till the winter when the rental season usually ends and landlords are more generous with negotiating with the rent. It is up to you.


On a side note, good apartments always go fast. What is left over for the winter may not be as pleasing. You will always be facing risks wherever you go.