The Demand Rises on Summer Rentals
With college interns descending on the city for summer jobs, Millie Wang, a real estate broker at Level Group in Manhattan has been busy finding rentals for them since winter. Often, students accept early offers from big investment banks and hedge funds, and to a lesser extent from media companies, the autumn before they arrive, and so some already book places to stay in January and February. “They know how hard it is to find a summer rental,” said Wang.
Those who wait until the last minute are left scrambling. Renting a furnished one-bedroom in Manhattan often costs $5,000 a month, said Wang, leading many to share their digs with a roommate or two. Tough as it may be to find affordable space, few consider living and commuting from farther away, like Jersey City.
“They are pretty adamant that if they have in internship in the city they want to live in the city,” said Wang. “Somehow they always end up finding a place.”
Although business slows down in New York City as power brokers depart for vacation spots in the Hamptons, it never really stops—and the city’s summer-rental scene reflects that. There are plenty of people clamoring for space, among them vacationers, transplants relocating in the city and those members of the freelance economy who have the freedom to work from virtually anywhere with an internet connection.
“Everyone wants to be in New York for the summer,” said David Adams, founder of the short-term rental site HomeSuite, based in San Francisco, which requires a minimum stay of 30 days. “What we find is by June, everything is booked up.”
Often, interns and other short-term renters from out of town experience sticker shock, when they realize what it will cost to get a place. “The interns always come in starting with a price point of about $3,000 a month for a two-bedroom,” said Wang. “I have to coach them and manage their expectations.”
Some also aren’t prepared for the spike in prices that occurs as the inventory of available summer rentals shrinks. Prices in New York started escalating this past May, said Adams. Currently, HomeSuite—which has been renting in New York City for two summers—has 2,000 listings, but Adams said, “there would be tens of thousands of rentals happening just for the summer in New York City.”
As one might expect, rents are highest in popular neighborhoods such as SoHo, Chelsea and Tribeca, where short-term rentals often go for more than $4,000 a month, said Adams.
Finding most of the sought-after properties already booked, some renters are turning to other neighborhoods, Adams said. “There are some hidden gems, where we see lower prices but fantastic locations,” he said. Among them are Grammercy Park and Murray Hill. “They are great locations, super walkable and centrally located, and good for the commute,” he said.
But even for these lower-profile neighborhoods, he added, there’s competition. “Everything in Manhattan is going to be very sought-after,” he said.
And the competition will only heat up in the coming years, thanks to other trends in the housing market, notes Adams. “More and more people are looking for this kind of housing,” he said. “There are people that are moving more often. They are looking for flexible housing solutions more and more often. Millennials are more interested in access over assets, and less-permanent solutions.” For those who want to ensure they get summer space, Adams offers one piece of advice: “Start looking, at the latest, in April.”