Shadow rental inventory drawbacks
Despite our sense that inventory feels unusually tight, its corresponding statistic shows that available units are up 3.6% for non-doorman units and 1.7% for doorman units. Inventory, of course, is incredibly difficult to track and is known for being less than reliable as a true metric. This is because there is no central system for tracking rental units across New York City. Yes, technology has brought us a long way towards increased transparency and empowerment. Renters can now know the management company, historical rental prices, access information and much, much more via the internet. Accurate inventory tracking, however, has reaped minimal benefits from our tech leap forward.
Sure, you have the big landlords like PanAm and Stonehenge, yet so many mom-and-pop operations fall completely under the tracking radar screen. Manhattan is peppered with so many small buildings or landlords who own a handful of apartments throughout the city; those units are under reported, if tracked at all. Further, even big landlords have different ways of calculating inventory, with various timing standards on when available units actually hit the market. Do their units get counted as available when the current tenants’ leases expire? When renovations are complete? When they know that the apartment’s lease is not being renewed? These discrepancies lead to a decent amount of shadow inventory that’s always under-reported. After all, it’s not in landlords’ best interest to unveil all of their units at the same time, should there be many, for fear of creating downward pricing pressure (much like new development units released in tranches).
Therefore, going on Streeteasy and thinking that you’ll get an accurate sense of what’s out there is bound to be limited in its fruitfulness. This is first the case because of the very shadow inventory issue we discussed above. Secondly, listings are notoriously quick to come on Streeteasy and slow to come off. It’s not uncommon for clients to send brokers 20 listings from Streeteasy only to find out that 80%+ of them have been rented. This is a situation where too much information can slow down the process. If you are going to work with an agent, know that while sending one or two listings may be additive to the process, bombarding him/her with dozens of listings from multiple sources will slow everything down. If you don’t trust your agent’s capabilities, find another one who you feel understands you and empower him/her to handle the search for you; after all, this is why you’re engaging an agent in the first place.
