By Orlando Lee Rodriguez
Levels of inventory for all categories of rentals and sales have fallen throughout the city to lows not seen in quite a while, according to multiple first quarter reports released by the city’s residential brokerages and real estate associations.
A sign that the last of the stock accumulated during the housing crisis may be disappearing, active inventory has dropped as much as 36 percent in Manhattan since 2011, according to data released by Warburg Realty.
Douglas Elliman reported similar findings over the quarter, saying their Manhattan inventory has fallen for seven consecutive months to its current level of 1.46 percent.
“Right now the inventory is the lowest I’ve seen it since the peak in 2007,” said Robb Pair, president of both Harlem Lofts and the Manhattan Association of REALTORS. “We had an open house yesterday and over 60 separate clients came through.”
Pair said that inventory is down, at least in Harlem, because customers are end users looking to settle in for the long term and not investors looking to make a fast buck.
That has led to record sale prices for townhouses uptown, with one brownstone selling for close to $3 million, according to the Harlem Quarterly Townhouse Report.
Harlem has a much smaller stock of brownstones than the borough of Brooklyn, yet that market is finding itself in a similar situation when it comes to inventory.
Douglas Elliman reported inventory has hit its lowest level in five years. While The Corcoran Group said that there is “impressive demand for lingering low levels of supply.”
Like Harlem, inventory levels are having a positive effect on Brooklyn sale prices, with the average home price up 14 percent over 2012, according to the Real Estate Board of New York.
Meanwhile, average prices for Brooklyn condos have risen 20 percent and co-op prices have gone up by nine percent in the past year, according to REBNY.
Manhattan, however, was a mixed bag.
Median sale prices in Manhattan rose, with REBNY reporting a seven percent hike compared with the first quarter of 2012 and Douglas Elliman reporting a 5.9 percent increase.
But rents were down, according to AC Lawrence and Citi Habitats, as much as 4.2 percent in the three bedroom category.
SoHo and Tribeca continue to command the highest rental prices, averaging between $2,415 for a studio to $7,217 for a three bedroom with a doorman just for the month of March, according to AC Lawrence.
Citi Habitats reported similarly, finding SoHo and Tribeca rents averaging between $2,500 to $7,484 in the same period.
Washington Heights and Inwood continue to have the cheapest Manhattan rents. Studios there begin at $1,647 a month, according to AC Lawrence, and $1,173 according to Citi Habitats.
Upper Manhattan may, at the very least, be fielding more inquiries on the rental front in the coming months. Brokers say that in light of the job market slowing, customers are beginning to look for cheaper deals.
“We have noticed that the average [client] is looking to pay less rent and is more interested in areas where they can save,” said Marc Lewis, chairman of AC Lawrence Real Estate, in a statement.
“With a relatively tight vacancy rate of around one percent, many tenants are forced to renew and pay a much higher rent than they can afford.”
But with demand outstripping supply before the busy summer season and prices on the rise, brokers may face challenges in finding enough stock that is within the borrowing reach or the rental capacity of their clients.
With the lending sector still cautious, there is some unease on what these combined factors may bring, but overall the outlook remained positive.
“We are concerned about the impact of the lack of inventory,” said Steven Spinola, president of REBNY in a statement.
“However, we are confident that the market will continue to improve as we progress into the second quarter of 2013.”