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NYC rental market reaps the benefits of uncertainty in the for-sale market in November

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Photo: Robert Clark

Some would-be New York City homebuyers are starting to “camp out” in the rental market until some of the uncertainty facing the sales market eases, according to a new report by New York brokerage Douglas Elliman.

“Although mortgage rates seem to have stopped rising, they are higher than last year and the new tax law adds to homeownership costs. Plus the apparent disconnect between the housing market and the economy itself,” Jonathan Miller, CEO of the appraisal firm Miller Samuel and author of the report, tells Livabl.

In other words, Miller says the economy is projecting strength but the housing market is not.

The Manhattan rental market was characterized by rising concessions, falling vacancy rates and price trends skewed higher by the influx of new development rentals in November.

Average rents in Manhattan rose 1.5 percent year-over-year to $4,151 in November. Compared to last year, there were 27.6 percent fewer Manhattan rental apartments on the market in November. Listings spent an average of just 29 days on the market, 20 days less than last year at the same time.

Landlord incentives rose year-over-year for the 42nd consecutive month in November. Some 42 percent of leases contained incentives, up from 29.6 percent last year. The average size of the incentive was 1.2 months of free rent or equivalent in November, down from 1.3 months last year.

Landlords typically provide incentives in the form of a period of free rent, in order to keep units occupied and vacancy rates down.

Manhattan’s vacancy rate was 1.65 percent in November, down from 2.35 percent last year. The vacancy rate has fallen on an annual basis for the last sixth consecutive months as incentives have kept buildings full.

Meanwhile, landlord incentives dominated the Brooklyn rental market in November, as incoming new development units skewed overall rents higher despite weakening market conditions.

“I don’t think it’s as much about next year’s L-train shutdown as an ‘affordability threshold’ that has been reached,” says Miller.

Some 8 out of 10 new construction rentals had incentives in November, while the market share of leases that contained incentives has increased on an annual basis for the last 34 consecutive months. Nearly 47 percent of new leases contained incentives in November, up from 18.6 percent last year.

Average Brooklyn rents jumped 2.2 percent year-over-year to $3,149 in November. Listing inventory fell by 20 percent from last year. Units were on the market an average of 27 days in November, down from 43 days last year at the same time.

In Queens, the recent decision by Amazon to locate their HQ2 in Long Island City (LIC) hasn’t had any apparent impact on the local rental market — yet.

“For now there won’t much of an impact but the sentiment about the market has improved significantly. Since the complex has to be approved and built and the market already contains a significant oversupply of rentals, it may actually be a few years before there is a meaningful tightening of the market,” says Miller.

Average rents in the northwestern section of the borough (which includes LIC) rose 6.6 percent year-over-year to $2,985 in November, with high levels of new construction rentals skewing overall rents higher.

November marked the fifth consecutive month of large annual gains in the number of new leases, prodded by rising incentive market share. Almost 60 percent of new leases across all unit types contained incentives in November, up from 44.5 percent last year at this time.

Miller says that the first sign of Amazon’s impact on the Queens housing market will be the “melting” of concessions. In November, more than 80 percent of all new constructions rentals had a landlord incentive.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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