An excellent article in the New York Sun yesterday highlighted some of the major factors contributing to the enormous crush for rental properties here in the city. While I won’t bore you by recounting the entire article, I did note one particularly striking statistic: the vacancy rate in New York is nearly 0% for rental housing. This almost minuscule vacancy rate combined with the projected 1 million new neighbors we’ll be greeting to the city over the next ten years has pushed rental rates up a staggering 25% in just the last five months alone!

Having just relocated to New York myself, I know first hand how true this is. Because of the low vacancy rate, rental properties are being snatched up almost as soon as they hit the market, creating a somewhat panicked atmosphere for the renter. I’ve seen listings for rentals being published one day with ads for an open house that very same evening. By the next day, the apartment is gone. The feverish pace of rental property sales here has gotten so bad that it has forced some, myself included, to make a snap decision about an apartment they’ve seen. Once you’ve visited an apartment, it’s either sign on the spot or leave it for dead, since by the time you’ve actually considered your options and made a decision, most of those options are no longer on the table.

Understandably the raw demand continues to support the stratospheric price appreciations in New York Real Estate. And who says we were in a housing bubble?