Brooklyn’s 14-month streak of rising rental prices ended in August, as new development units came onto the market, according to Douglas Elliman’s monthly rental report released Thursday.
The borough’s median rental price in August was $2,808, down 1.5 percent from $2,852 in July. That’s also down 1.5 percent from a median rental price of $2,850 in August 2013.
Overall, the drop occurred even as the market split somewhat – with prices rising for studios and one-bedrooms but slipping for larger units, said Jonathan Miller, president of real estate appraisal firm Miller Samuel, who wrote the report.
For studios, the average rent in August was $2,266, up 7 percent from July and 9.4 percent from last August. Two-bedroom units, however, registered an average rent of $3,292, down 3.8 percent from July and down 6.1 percent from the prior year.
Still, Brooklyn’s median rental price was $367 lower than Manhattan, where the median rental price rose 0.8 percent to $3,175, according to the report. The average rental price in Manhattan edged up 2.2 percent to $3,946, compared with July 2013.
In July – the throes of the rental market’s busiest season – Manhattan’s vacancy rate fell 1.87 percent while listing inventory dropped 2.8 percent to 5,540.
“There’s a lot of inventory that’s been coming to market in new construction. It seems at this point it’s sort of reached a certain plateau,” said Yuval Greenblatt, an executive vice president at Douglas Elliman. “It could just mean the market is taking a breather and waiting for the next wave of projects to come in.”
The report also underscored the increasing demand for rentals in the outer boroughs.
In Queens, while median rental prices dropped 1 percent to $2,788, the average rental price per square foot increased 10.4 percent to $43.12 — again, driven by new development.
Queens also saw 289 new rentals in August, a 337.9 percent increase from the same time last year. “That’s a reflection of new product coming onto the market,” Miller said. The increase in rentals was also seen in Brooklyn, which had a 71.7 percent increase in August from the prior year, compared with a 5.9 percent drop in new rentals in Manhattan in August.
Further reflecting the market’s price sensitivity, Citi Habitats said in its own report Thursday that the vacancy rate in Manhattan in August was 1.27 percent, the highest in five months and an “unusual” rate for the summer season. The East Village had a 2.08 percent vacancy rate and the West Village had a vacancy rate of 1.58 percent in August.
“Tenants have been feeling the sting of high rents,” Citi Habitats’ President Gary Malin said in a statement.