How Low Will They Go?

We thought we would never say it, but Manhattan is getting a little cheaper. Not if you want to shop or go out, but if you want to move into an apartment. As unemployment in the city hit 10 percent, and Wall Street jobs vanished into thin air, rents across the borough dropped 9.4 percent in the fourth quarter of 2009, according to a report by broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. On the East Side, the average rental price during the fourth quarter of 2009 was $3,774, compared with $4,092 during the fourth quarter of 2008. The median rental price for properties in the neighborhood during the fourth quarter was $2,600, compared with $3,195 in the fourth quarter of 2008. People are not just downgrading their lifestyles but also their apartments, moving into smaller, less luxurious spaces, making landlords nervous and ready to strike a deal that will keep the tenant in and the apartment occupied. This means that people looking for a new place to stay now have plenty of options. When Mona Patel moved to New York last year from Gainesville, Fla., to start a new job, she hit Craigslist to look for a place to stay.ˆ Within days, she had narrowed her search to two apartments on the Upper East Side and a few more on the Upper West Side. The difference in quality, she said, was stunning. â??On the Upper West, some of the places were large, but the conditions were so bad, she said, adding that in many places, the paint was peeling off the wall and roaches littered the floor. â??On the Upper East, however, the places were cleaner and I felt I was going to get more bang for my buck. Patel settled on a large sunny one-bedroom apartment on East 91st Street between First and Second avenues. It was listed for $1,700, but a nervous management company, eager to rent the property, dropped the price by $200. Patel didn"t even have to ask. She immediately signed the papers and moved in. â??It is a renter"s market, certainly, said Michelle Araujo of Gotham Realty Services. â??The Upper East Side is outpricing the Upper West. If someone is looking to spend $2,400, then I try to move them over to the Upper East. The best deals, she said, are being made on the East Side now's like a property she is trying to move that was originally listed for $3,400. After finding no takers, the landlord chopped the price to $2,250. â??The problem some landlords have is that they are competing against luxury buildings that offer so many incentives, Araujo said. â??There"s no way an individual landlord can compete with them. Imad Abbas, a luxury rental and sales specialist, agrees that luxury buildings have been hit by tenants who have downgraded their digs, forcing landlords to offer freebies like a month"s free rent, free gym membership and shuttle service to and from the subway. â??This is the worst year ever, Abbas said. â??My friends who have worked in this industry for 30 years have never seen so many freebies. Incentives were an important factor in driving rents down almost 14 percent, according to another report by CitiHabitats, a residential New York City broker that closed on about 13,000 rental deals during 2009. While landlords are twitching to find tenants, Michelle Araujo offers some ideas for people looking to make the switch to a new apartment. â??Assess what you want and look for that, she said. â??Do you really need a doorman, will you really use the gym downstairs? You can save yourself a lot of money if you are realistic. Tenants should scout around for a new place and use that information to re-negotiate their lease with their landlord, she suggested. Araujo also advises to keep an eye out for rentals that are up for sale's instead of paying rent and not owning the property in the long term, look for places that seem like a steal and make a down payment to purchase the place. Property is cheap now, she said, and it makes more sense to buy in some instances than rent. For the best deals on luxury buildings, Abbas suggests looking east of Second Avenue. â??Between First and York. That"s where the best deals are, he said. â??The hardest spaces to move are in the 60s and Third Avenue, he said, adding, â??most people are being frugal and those apartments don"t give as much space compared to Second and York. Most importantly, keep an eye on the market. Mona Patel"s cousin Asit Patel monitored the market movements and saw prices dipping at the start of the recession. His rent for a two-bedroom walk-up on East 90th Street and Lexington Avenue was $3,050. With some key market information, coupled with a quick call to the real estate company, Asit and his roommate re-negotiated their lease to $2,550, proving that knowing the numbers in this market goes a long way. Brokers, however, expect things to tighten up this spring. â??Once this crop [of renters] is absorbed, said Douglas Wagner, executive director of Bond New York Real Estate, â??the next wave will be in April-May, when students come into the city. He urged apartment hunters to make their move now, adding that prices will escalate in the spring and a lot of the freebies being offered now would be gone. â??For New Yorkers, the Upper East is a surprise opportunity, he said. â??It"s a great time to come over to the East Side.