In a Tight Market, Creative Marketing is Crucial
- Aug 15, 2008
This week, MHN reported that New York-based residential firm Metro Loft Management will be waiving security deposits for renters with strong credit histories at its 20 Exchange Place building.
Condo and co-op sales have been strong in New York in the past year, despite a national housing slump.
The average condo price increased 36 percent from a year ago to $1,663,533, according to Halstead Property’s second quarter Manhattan sales report.
In some markets, strong home sales can weaken the rental market. That’s not the case in New York, however.
- Yes, selling prices have remained fairly high through the housing slump. As prices fell throughout the rest of the country, the New York condo and co-op market stayed strong.
As standard single-family owners struggled to hold on to their declining equity–many of them discovering that they suddenly owed more on their home than it was worth–the New York market was so robust that buyers were eager to purchase luxury condos.
In fact, sales of units in two luxury developments–The Plaza and 15 Central Park West–alone pushed average Manhattan condo prices up.
Even without those numbers factored in, the average condo price would still be a respectable $1,656,210–which is 16 percent higher than 2007 levels.
- The weak dollar attracted foreign buyers–which also helped fuel demand in New York. We can thank foreign investors, who the New York Times said "have helped keep apartment prices at stratospheric levels."
Yet, as the for-sale market increased, the rental market also remained highly competitive.
As of June, the Upper East Side showed the highest vacancy rate in Manhattan–which was just 1.45 percent. Overall, Manhattan’s vacancy rate was a scant 1.21 percent, according to Citi Habitats’ June rental market report.
It’s still expensive to buy a place in New York–$1,663,533, according to Halstead.
And, according to MSNBC, the average rent for a two-bedroom, unfurnished luxury apartment is $4,500 a month–which landed New York City the top spot on Forbes’ list of America’s most expensive cities.
Expensive rental markets can sometimes give the for-sale market a boost. Renters figure if they’re spending that much to rent, buying can’t be too much more.
The result: The rental market can falter.
That hasn’t happened yet in New York, however, which means rental property owners are still facing fierce competition to land renters. Which makes Metro Loft Management’s marketing idea a brilliant one.
A recent New York magazine article outlined how developers are decorating models to make it appear a very specific person lives there–one buyers might like to be–to help sell units.
Developers in the city are also marketing units with big bonuses like Gianni Versace SpA-designed luxury condos, which will be located in the clock tower of the former MetLife Inc. headquarters in Manhattan, Bloomberg reports.
According to a recent Canadian Press article, other residential builders are including resort-like amenities such as turndown service and pet sitting to make units more attractive.
In a tight market, creative marketing is crucial. What unique approaches have you seen recently in the multifamily industry?
Share your picks by posting below.