Brad Ogbonna, a 35-year-old photographer, moved to New York City roughly 14 years ago from Minnesota. Since then, he’s lived in numerous neighborhoods across Brooklyn and Manhattan–Fort Greene, Clinton Hill, and Hell’s Kitchen, to name a few. For the last five years, he settled in Bed-Stuy, but that all changed when his landlord decided she wanted to move back into her condominium.
The housing market was nothing like he remembered when he signed his last lease in 2018. A lack of available suitable apartments and a high quantity of applicants left him searching for three months. “If I was interested in a place, they wanted you to put in an application in that same hour without letting you do any due diligence,” Ogbonna says, noting that his biggest surprise was navigating bidding wars. “The few places that I put applications on would end up with a counter, sometimes going for $200 or $300 over asking.”
The bidding-war phenomenon is a result of the high demand of New York City real estate post-pandemic. During the height of COVID-19, nearly half a million New Yorkers left the city to relocate to other cities, while those who stayed scored “COVID deals” on rentals. “When 2022 came around, rents went back up, everybody moved back, the demand was high, inventory was low, and the bidding war began,” says Chelsea Picken-Cain, a real estate salesperson based in New York City, noting she has seen rentals go for 20 to 25 percent over asking.
Photo: Getty Images
Yana Yatsuk, a 30-year-old photographer, moved from Los Angeles to Brooklyn seven months ago when her friend offered her apartment to sublet. Prior to the move, Yatsuk had been sifting through listings on StreetEasy, Zillow, and Craigslist, but found Instagram to be her best tool. “I think a lot of people know how hard it is to find a spot right now, so a lot of people try to keep close friends in the loop,” she says, noting that a lease takeover or sublet feels like the only option after experiencing being outbid by other renters and ghosted by listing agents. “New York is one of those places where, if you see something, you have to jump on it immediately. So I’ve always been looking. I’m never not looking,” she says. While Yatsuk is still keeping her eye open for leads, she’s admitted that the current housing climate has left her feeling discouraged and is considering a move abroad.
Picken-Cain suggests renters get smart about landing an apartment by being prepared to bid in a way that works for their financial means. “I’m not encouraging anybody to overpay, but I think that if people come into their search with a lower budget than what they can actually pay, then they basically bid against themselves,” she says. Picket-Cain also suggests doing other things to make your application stand out, like writing a letter to the landlord, showing all of your financial assets, and being flexible about neighborhoods and wants versus needs when it comes to amenities. Most importantly, cultivating a relationship with a real estate professional who has access to off-market listings can help apartment seekers get ahead of the curve, and having documents prepared in advance can speed up the processing time. “If you see something you love, you have to be able to apply for it on the spot with a move-in date that is closest to the date you are applying,” she says.
On the West Coast, where available and affordable housing has been an issue since the tech boom, bidding wars are seeing a rise in major cities like Los Angeles and San Francisco. “We’re seeing a ton of people who want the same place, then applying for the same place, and offering an extra few hundred dollars a month to secure that place,” says Sarah Jackson, a real estate agent based in Los Angeles. “In some cases, renters are offering to sign on for longer leases,” she adds.
Jackson believes the phenomenon is learned. “A renter has probably lost out on a place because it went into bidding, so it urges them to offer more the next time they find a spot they don’t want to lose out on, creating this influx of bids on rentals,” she explained.
As far as when or if the bidding war on rentals will come to an end, Picken-Cain doesn’t foresee it in the near future. “There isn’t an incentive for landlords to drop prices right now. If folks have the capital and they still qualify based on their salary, they’re willing to go up as high as possible,” she says.