The New York City rental apartment market is tied closely to the local economy, more so than the sales market. That market might see foreigners buying a lot of condos even as Americans lose their jobs. But the rental market–it tends to rise and to fall with the city’s economy. Generally, job losses and uncertainty in New York translates into more vacancies and lower rents.
So the news that JPMorgan Chase and the Federal Reserve are acquiring Bear Stearns, the world’s fifth-largest investment bank and one of New York’s most prominent employers, could ultimately be good news for the city’s renters. Grimly and pragmatically speaking, any layoffs could reduce the number of people who need to be in the city by thousands. That could free up apartments; and that greater vacancy could drive landlords to drop rents.
But not the “could” factor: The rental market, especially in Manhattan, has been remarkably bouyant as of late. Rents have ascended to records in many neighborhoods and the vacancy rate citywide rests somewhere below 5 percent (and below 3 percent in Manhattan).
Still, the landlord logic remains: less qualified renters means fewer leases means incentives, including lower rents.
We’re probably still months away from such a reality (the Bear Stearns deal isn’t expected to close until June and may yet fall through); but it’s a glimmer of possibility that renters, weighted now for years under ever-burgeoning rents, would welcome.