First let me say that only recently did I find the opportunity to sieve through the multitude of spam comments and approve the real comments that were posted since the last article titled “2008 Market Starts to Warm”.  Thank you all for your readership and curiosity on the matter. Second I’d like to remind everyone reading this article that we are based in Williamsburg Brooklyn and our observations are based on the goings on of the local market here -to set the parameters of our observation field straight for the record. From what I hear from colleagues, prospective tenants and landlords elsewhere, our observations are in line with what is going on in other parts of Brooklyn, and to some extent even in, untouchable as it remains to be, Manhattan.

I’d like to look back at what has happened since the article was published back on February 23, 2008, and how the market has since reacted.  While the predictions that were made regarding more qualified buyers and rental prices, and even the predictions regarding the low inventory levels we should have expected, while those prediction came to fruition in the months that followed, I have to remark on the significant overall decline in the number of movers on the market for a rental this year.  It is unquestionable that in my market tenants appear to be holding their breath, in a way that I’ve never seen before.  

The expectation at the time of the article that management companies would continue to experience high levels of renewals has exceeded itself somewhat dramatically.  Last time this year I had to hire a full time administrator to punch in the listings because they were flying in and out at a pace myself and my agents could not keep up with.  This year in place of 7 or 8 vacancies in June 2007 from one of my larger private management clients, we have 4.  The same ratio applies throughout our client base this year.  Put simply, people are staying put. 

The number of general inquiries (ie. ‘hey whats up, need a pad for some unknown move in date somewhere between $5/mo and 2 million/month-whaddaya got?’) has gone up, and the number of actual requests for inventory has somewhat slowed.  Yet while the prices are going up just like last year and the year before, and the places that come on the market rent on time, albeit with a little more of an effort than we are used to enjoying, we are now seeing more casualties on the market -such as a 900 sqft real 2 bedroom apt in the heart of Wburg’s blazing Southside market going for $2200, still $100 more from last year, but not the asking $2400 which is $100 less than what it would have gone for last year or the year before.  The question we hear now most often in my office is “Do you have any two bedrooms -hate railroads- for under $2000 on the first three stops of the L?”  If the answer were yes, we would be back in the real estate market of 2003.  

The other interesting think I’ve noted is the number of calls I get from people who are moving out of their places because they cant afford them any longer. In spite of this dent in our fierce market place, we have continued to see the obvious signs of growth we expected in the neighborhood. There has been a rush of more qualified, wealthier, young professionals with assets into the neighborhood.  There is a definite change in the quality of the units fresh off the renovation grid -landlords have realized that it is worth investing in a good renovation of their buildings’ units to keep up with market prices. Something which the landlords will tell you themselves, that while it stems from the fact that we are experiencing a buyers market, “it’s the best thing [for the building/investment] in the long run”.  

Perhaps what they won’t say is that they are trying to improve their portfolio so that they have a more robust platform for cash on cash investing come winter when prices of homes are supposed to hit rock bottom and the market is expected to be at its most vulnerable…  its interesting, there’s a lot of perception going around, and talk like this article talks makes a part of that perception, but the realty is, even if its a hot time to buy this winter…lets say that’s true…even so, are people gonna sell, are they gonna hold?  Are investors going to succeed in cracking into the market of distressed buyers?

Its hard to say for sure but the truth is probably somewhere between the fact that Williamsburg is a robust real estate market, and the war and elections and all that, is most probably not gonna change that in a huge way.  Dents (ie normal wear and tear) excepted of course. Here’s another prediction then…

 If the market ’survives’ the winter, and somehow next spring all the ostriches realize its ok to take their head out of the sand hole, we’re going to have an awful lot of people that have spent 2 or 3 winters in the same spot on our hands, and we’re going to have a lot of inventory on our hands from the freshly sold investment condominiums which foreign investors are rumoured to be lining up for this winter.  Which is justs a polite way to say, lots of demand, and plenty of supply. Not to sound like Hoover, prosperity around the corner and all that, but more a word of encouragement to all you bruised up real estate professionals.  I think we’re all gonna be just fine.

More on the topic as things develop. Feel free to leave your own analysis of the situation here -I will publish it unedited if its free of profanity.