New York City’s housing market now resembles 2008 in one critical way — and it’s especially bad news for renters

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New Yorkers’ rents are rising. The same cannot be said about his salary.

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New York City’s rental costs increased 13.4% between August 2021 and August 2022 when adjusted for inflation, according to a report released Thursday by real estate platform StreetEasy. Meanwhile, real wages in the city declined 9.1% in the same time frame, StreetEasy said,

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This means that rent growth eventually outpaced wage growth in the Big Apple by more than 23%, given the widening gap between the two metrics since the 2008 financial crisis, when rent prices fell sharply, StreetEasy. Kenny Lee, an economist at the U.S. told MarketWatch.

Today, “the vast majority of the gap between wage growth and rent increase is driven by rising inflation,” Lee said.

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,Uneven growth can be especially challenging for frontline workers and those with low wages.,

Uneven growth can be especially challenging for frontline workers and those with low wages.

For typical New Yorkers employed in the nine business groups tested by StreetEasy—including workers in health support, food preparation and serving, transportation services, and more—only 10% of the city’s available rental inventory can be considered affordable on their income. Was this summer, StreetEasy said. (Assuming that workers were the only source of income in their household and earned an average salary, the report said.)

StreetEasy said the other 90% of rental units would cost the same workers, who make up about 48% of the city’s total workforce, more than half of their income on housing. that reality was already faced By renting out nearly a third to New Yorkers in 2021.

, While the city’s average rent rose 27% in September from a year ago, it is no longer rising as rapidly as it was this summer.,

And none was worse than health-support workers, a category that includes home-health aides and nursing aides. Typical annual wages in that area are about $38,730, based on state data, meaning that barely 2% of the city’s rental inventory this summer was available to people who spent less than half of their income on rent. wanted to do

Still, the report, like many other recent rental analysis, notes that better days may lie ahead. While the city’s average rent rose 27% in September from a year ago, it is no longer rising as rapidly as it was this summer. In fact, the average asking rent dropped $75 between August and September, settling at an eye-watering $3,500 still.

StreetEasy also said that about 8.6% of the city’s landlords were offering potential tenants at least a month’s worth of free rent in September, suggesting they are having a more difficult time filling vacancies – and perhaps They are not as confident as they were earlier this year.

Nationally, property management software company actual page also said in a report on Tuesday that there has been a major halt in leasing traffic: demand for apartments was negative in the third quarter of this year – making it the first third quarter with negative demand in 30 years. To be sure, though, apartment vacancies remain low at 4.4%.

So, even though the market is showing moderation, it may not be enough to help struggling renters in the near term.

“We reached the peak of rent increases based on our data,” Lee said. “It’s going to be a long winding road from the summit.”

Credit: www.marketwatch.com /

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