The COVID-19 virus has turned the Greenwich rental market on its head. We have seen the demand for lower-end rentals fall while the demand for high-end rentals surge. Much of this change in demand is due pandemic motivating New Yorkers to get out of their city apartment into larger homes, that are larger than we have seen in the past. The result is some extraordinary rental prices for our premier houses, but more about that latter.
Overview of the 2020 Greenwich Rental Market
The COVID-19 pandemic is driving both the high-end and the low-end, but in opposite directions. Below $4,000/mo, our rentals are down. Below $2,000/mo you are looking at accessory apartments, studios and 1-2 bedroom condos, i.e. something that looks very much like the rental market in much of NYC, so demand has dropped. Below $2,000/mo we have no single family home inventory and have not had a house rental under$2K since 2017.These units don’t give folks the social distancing that today’s motivated NYC renter is looking for.
All Greenwich Rentals from 2007 to 4/27/20 by Price Range
|Price Range||2007||2008||2009||2010||2011||2012||2013||2014||2015||2016||2017||2018||2019||2020||2020 Anlzd||10 Yr Avg|
From $2,000 to $4,000 apartments and condos still dominate with only 71 house rentals out of 354 total rentals in 2019. From $4,000 to $6,000 per month apartments and houses are evenly split. The house share of rentals continues to increase as you go up in price and once you get to $14,000/mo all the rentals are single family homes. But, that is market share. If you look at the market as whole, the large percentage of our rentals are from $2,000 to $8,000, which represents 61% of the market this year so far and was 72% last year before COVID-19. This market is always active with listings coming and going every week.
Our overall rental market also has a marked seasonality with rentals peaking in May a month earlier than house sales, which peak in June. Rentals are also less peaky than house sales with a decent market throughout the year. You can still rent a property in January, just not as easily as you can in May. Rentals also stay on the market for a much shorter period of time. So far this year our median days on market for a rental is 68 days, while it is 182 days on market for house sales. With rentals if you don’t see what you want just wait a little bit another new listing will come along soon.
This year we are on pace to set a record for rentals. As of April 27th, we have had 308 rentals. If you annualize that number, you come up with 961 rentals compared to 863 rentals last year and a 10-year average of 836 rentals. Nearly all that growth will be from the rental of single family homes. However, the one thing you can be sure of in this ever changing COVID-19 driven market is that just as our January market didn’t look like our April market, our 4th quarter market is going to be different than today’s market.
The Single Family Home Rental Market
- Big jump in rentals
- Under $6K down though
- Up overall, particularly over $14K/mo
- Over $20K/mo 21 rentals more than we had all last year, up 378% annualized
This year our single family home rental market looks different than any prior year. House rentals are on pace to be up 50% over 2019 with an annualized 471 house rentals compared to a 10-year average of 374 house rentals. (Please take these annualized numbers with a large grain of salt. It is just a way to compare this year’s different trend with last year’s rentals.)
We started out the year with a fairly normal January and February, then came March and the COVID-19 shelter in place requirements and the house rental market took off.
Not only was the home rental market more active, but the prospective tenants that were out there wanted bigger houses, more land and shorter rental periods. If you had a smaller house, then we saw lower demand. We actually saw a drop in house rentals from $2,000 to $6,000 (and as mentioned before we no longer have any house rentals under $2,000/mo.) This lower range is usually in heavy demand.
The higher you went in price the bigger the price change. From $8,000 to $10,000 single family rentals were up 23%, while above $20,000 per month our house rentals were up or 378% on an annualized basis. If we had more inventory, we would have many more rentals above $20,000.
|Single Family Homes Price range||2007||2008||2009||2010||2011||2012||2013||2014||2015||2016||2017||2018||2019||2020 as of 4/27||2020 Anlzd||2020 % vs 10 yr avg|
Presently, we have 199 rental listings, but only 25 of those are for $20,000 per month and only 6 of those houses are on for more than $40,000 per month. This new demand for high-end rentals is also reshaping what some Realtors business. I was showing a prospective tenant a house for $40,000/month and my client asked one of our top brokers a question about the rental and the agent replied, “I’m sorry, I don’t know, I don’t traditionally do rentals”.
I rented a house for $25,000 per month in March and we had 5 offers in a day and a half, two at full list price. The very nice woman who had made the losing full price offer lived in a beautiful Manhattan co-op on Park Avenue. I asked her why she was willing to pay $25,000 per month for a house she had never visited. She said, “Every time I get in our building’s elevator even if it is empty, I feel like I’m risking my life and my children’s lives.”. These folks are also really getting cabin fever and want to escape the confines of their condo, co-op or apartment to our beautiful open spaces.
Andrews Farm New Listing
To see what the ultra-high-end looks like check out the new listing that Jill Marchak and I put on in the Andrews Farm association. This stone Georgian is in top condition, with 6 bedrooms, 8 full and 3 half baths. It has all of the amenities that today’s renter who have to shelter in place are looking for. It comes with a well-equipped home office, a large gym, a game room with lots of activities and a home theater.
You can see the aerial of this property at the top of this post. Outdoors the gardens are extraordinary and very peaceful and will be in full bloom in the next couple of week. In the back you will also find two koi pond one with a waterfall. The backyard also has a large heated pool, with a spa, and two accessory buildings. With the weather warming, the tenant has a full outdoor kitchen for cook outs and to enjoy the longer days. It’s the kind of place for someone looking for an escape from the city on its 4.2 acres of space in backcountry with the privacy you would expect from a gated community.
As with most of the real high-end rentals, it is available to rent for a 1 year minimum term and is listed for $60,000/mo. You can have it either furnished or unfurnished.
Trends & Action Items
Clearly, high-end rentals are growing, particularly short-term rentals. With May just around the corner many of these renters are looking at extended rentals through Labor Day. The other thing we are seeing is that many of the families that are looking at short term rentals are also considering buying in Greenwich and using their rental is an exploratory mission base.
For those that are looking to rent, particularly a short term high-end rental you have a lot of competition and not a lot of choices. One rental that is on for over $50,000 per month has 12 people on a waiting list including several well-known names. Now is not the time for a tenant to get overly demanding. Despite the high rental price, this often comes down to one family renting to another family. Making a lot of demands for what you want before you move in will immediately move your offer to the bottom of the list.
Another thing we see at the upper-end is that the tenant often sends the standard GMLS lease to their New York attorney who sends it back with 20 suggested changes, some downright onerous. Such “offers” are DOA. A $50,000 a month rental is $600,000 per year and is worth having an attorney examine, but if you are looking to do a deal get a Greenwich attorney who knows what works and more importantly what doesn’t work in Greenwich.
If you have a house to rent, particularly over $10,000/mo you are looking at very good demand and limited inventory. Please give Jill Marchak or me a call at 203-969-7900 or email me at firstname.lastname@example.org.
February was a pretty normal rental market; March was not and April had it’s share changes; you can expect even more in May. It’s an especially good time to have an experienced agent who knows about another $85,000/mo rental that is coming soon.