Search vs Reality — Renters are looking for apartments that are 10% less than market value

The cold, hard facts of the current rental market were highlighted in the last post (“July Rental Prices Continue to Sizzle”), but that doesn’t mean people want to accept it! I ran a search of all the rental inquiries made in the last week on the Citi Habitats web site, which, as the #1 rental site in Manhattan should be a pretty solid barometer of what people want.

This first chart is a simple breakdown of the type of apartments people are hoping to find. As you can see, it’s the 1-bedroom and 2-bedroom apartments that are in most demand with 27.6% percent of the total searches each. Studios are not too far behind, but the demand for 3-bedroom units has seen a significant drop in the last couple of weeks. We can likely attribute that to the fact that most of the big roommate/share clients, as well as the larger families, have already ensconced themselves in new places before the start of the new school year.

In the second chart, I compare the average search price versus the actual average rental prices from this past month. Across the board, people seem to be searching for apartments that are significantly less than the market dictates. Which means, that more often than not, a customer who comes in our door will end up having to stretch their budget by around 10% more than they initially wanted to spend.

Believe it or not, that’s actually good news as the 10% figure is pretty typical (most people, whether buyers or renters, usually give themselves around 10% of wiggle room when they start their searches). When I did a quick check of similar figures last month, the spread between “want” and “can have” ranged from 15-20%.

While we’d all like to believe that means pricing pressure has let up a bit, it probably means that, as the summer market has progressed, people have gotten more realistic about the bucks they’ll have to spend.

And them’s the cold, hard facts…

PS. Decided to add one more chart: A look at which are the most searched for neighborhoods. Enjoy.