A buddy of mine that works for a private equity shop is renting a one bedroom on the West side of Manhattan. He re-signed his lease for $3000 per month last June, $100 above the previous lease, but $100 below what the landlord was asking.
According to an ad on Craigslist, his building is now offering a similar unit for $2,390, plus a month free. That’s a net effective rent of $2,190.
That means the rent on his apartment has fallen ~27% in 6 months.
If you take a rent vs buy calculator and start plugging in modest annual rent decreases, it’s really hard to come out on top by buying. And given the amount that prices have come down nationally, it stands to reason that rents are likely to follow suit at some point. Any buyers in this market should definitely beware.