Diana Parkhouse
Volume of proposals of apartments in New York fell by 20% in the III quarter compared with the same period last year. This is linked the fact that buyers are leaving the market, and sellers are lowering prices too slowly.
Wall Street Journal was one of those who wrote about the problems. The edition noted that rent for residential property fell in San Francisco, San Jose and New York.
"San Francisco and New York are leading the fall," - said Ken Rosen, Head of Fisher Center of Real Estate and Urban Economics at the University of California at Berkeley.
The trend towards urban living resulted in 7 million new households for rent after the market peak in 2006, as level of real estate ownership decreased to the lowest in 51 years.
According to Zerohedge, one of causes for the weak market was a big jump in residential areas and simultaneous slow growth in number of jobs that could fill these new residential complexes.
The main reason for decline is the sharp increase in rent proposals. There are more than 555 thousand apartments under construction in the 100 largest US metropolitan areas. Tenants are also starting to save as rentals have increased by 60% in some markets since 2010. Meanwhile, number of high-paying jobs is slowing down in New York, San Francisco and Silicon Valley.
According to Axiometrics data, almost 6,700 apartments will be built in San Jose and almost 6500 in San Francisco by the end of 2018. The number reaches 42 thousand in New York for the same period. San Francisco, Oakland and San Jose marked the largest surplus of new residential areas, which can be seen in an increase of 76% in 2016. Not surprisingly, the employment rate peaked.
This led to the fact that the San Francisco luxury apartments offered significant bonuses, according to Yahoo! Finance:
"Proposals that previously went off in two or three weeks, can now be unclaimed from two to three months - says e representative of Skybox Realty. - In the last 18 months, at least four new apartment buildings were opened near each other in the San Francisco area, where the majority of large IT-companies such as Airbnb, Pinterest and Yelp (YELP) are located.
In addition, excess of the market offers in cities such as New York is initiating decrease rents for already built housing.
Eugene Korsunsky, President of real estate Agency Intempus Realty in San Jose, said that finding customers for the rental of apartments took about a week over the past couple of years. Now, he can look for a tenant for nearly a month.
Property owners are haggling, as they know that tenants prefer to avoid having to move.
Overall reduction of the rent can be an advantage, but weak job growth will bring no potential tenants for a large number of residential areas, and this will reduce profits of real estate companies.
source: wsj.com, yahoo.com, zerohedge.com
Wall Street Journal was one of those who wrote about the problems. The edition noted that rent for residential property fell in San Francisco, San Jose and New York.
"San Francisco and New York are leading the fall," - said Ken Rosen, Head of Fisher Center of Real Estate and Urban Economics at the University of California at Berkeley.
The trend towards urban living resulted in 7 million new households for rent after the market peak in 2006, as level of real estate ownership decreased to the lowest in 51 years.
According to Zerohedge, one of causes for the weak market was a big jump in residential areas and simultaneous slow growth in number of jobs that could fill these new residential complexes.
The main reason for decline is the sharp increase in rent proposals. There are more than 555 thousand apartments under construction in the 100 largest US metropolitan areas. Tenants are also starting to save as rentals have increased by 60% in some markets since 2010. Meanwhile, number of high-paying jobs is slowing down in New York, San Francisco and Silicon Valley.
According to Axiometrics data, almost 6,700 apartments will be built in San Jose and almost 6500 in San Francisco by the end of 2018. The number reaches 42 thousand in New York for the same period. San Francisco, Oakland and San Jose marked the largest surplus of new residential areas, which can be seen in an increase of 76% in 2016. Not surprisingly, the employment rate peaked.
This led to the fact that the San Francisco luxury apartments offered significant bonuses, according to Yahoo! Finance:
"Proposals that previously went off in two or three weeks, can now be unclaimed from two to three months - says e representative of Skybox Realty. - In the last 18 months, at least four new apartment buildings were opened near each other in the San Francisco area, where the majority of large IT-companies such as Airbnb, Pinterest and Yelp (YELP) are located.
In addition, excess of the market offers in cities such as New York is initiating decrease rents for already built housing.
Eugene Korsunsky, President of real estate Agency Intempus Realty in San Jose, said that finding customers for the rental of apartments took about a week over the past couple of years. Now, he can look for a tenant for nearly a month.
Property owners are haggling, as they know that tenants prefer to avoid having to move.
Overall reduction of the rent can be an advantage, but weak job growth will bring no potential tenants for a large number of residential areas, and this will reduce profits of real estate companies.
source: wsj.com, yahoo.com, zerohedge.com