At a time when most rental brokers in Brooklyn were girding their loins and praying for a springtime uptick in activity, one firm says it ended 2009 with a big demand for rental units, albeit with lower than average rents.
Ideal Properties, a two-year old Brooklyn-based residential sales and rental firm, described its rental performance as “stronger than strong” during the last two months of 2009, in a year-end report (see full report below).
Meanwhile, the borough’s rental developments have been on rocky ground, with high-profile buildings like the Brooklyner, a 51-story behemoth that boasts the title of tallest building in Brooklyn, slashing prices. At last count, the Brooklyner had slashed its rates by almost 29 percent.
But Ideal, which covers approximately 14 different Brooklyn neighborhoods in the western portion of the borough, including Cobble Hill, Carroll Gardens and Park Slope, beat its typical December monthly performance by 20 percent, according to Aleksandra Scepanovic, managing director at the firm.
According to the report, 15.3 percent of the rental transactions for the year occurred in the month of December alone. Scepanovic would not indicate Ideal’s total number of rental deals for 2009, but put December’s 15.3 percent figure at about six to 12 deals per agent. The report is based on 7,100 rental listings in a proprietary database.
The spike in activity was due to improved stability in the region, she said, a changing of the tides from 2008 and rent reductions. Still, she admitted that the figures came as somewhat of a surprise.
Rents in the neighborhood largely reached bottom at the end of the year. Pricing began to taper off in the fourth quarter, particularly in December, according to the report, with double-digit year-over-year price declines giving way to single-digit drops. Rents in 2009 averaged $2,208, the report shows, compared to $2,371 in 2008.
Rent reductions proved a key motivating factor in the end-of-year movement, the report says. One-bedroom apartments, for example, rented for approximately $214 per month less in 2009 than in the year before, according to Ideal.
“What is unusual… is that out of [peak] season you would have this much activity,” Scepanovic said.
She, however, isn’t the only one who is surprised by Ideal’s data.
Sam Heskel, executive vice president with Brooklyn-based appraisal group HMS Associates, said that while he believes the rental market has stabilized in the borough, he cannot account for why such an unseasonal rental pattern would emerge.
Sandra Dowling, owner of Brooklyn Heights Real Estate, said she hasn’t seen activity like what Ideal has described.
“It didn’t get feverish in our vicinity,” Dowling said of the last two months of 2009. While she said that her business still has “a steady influx from Manhattan,” she said that her agents pulled in about 20 percent less — not more — business this November and December, compared to others.
The seasonality of the market, for Dowling, has remained virtually the same.
Ideal Properties Market Report