Move over, hipsters! Brooklyn’s rents rising nearly twice as fast as Manhattan’s

Median rents in the borough of Kings hit $2,560 per month in March

TRD New York /
Apr.April 11, 2013 12:01 AM

Aspiring fiction writers and artisanal mayonnaise purveyors beware: rents are rising appreciably faster in Brooklyn than in Manhattan, according to real estate maven Jonathan Miller, author of a monthly Manhattan and Brooklyn rental market report released today by Douglas Elliman.

“Brooklyn is more standalone than ever before,” said Miller, president of appraisal firm Miller Samuel.

The median monthly rent in Manhattan was $3,195 in March, according to Elliman’s figures, putting it only 2.8 percent lower than the highest median recorded since the firm began tracking rents in 1991. (The record is held by the fourth quarter 2006 median rent of $3,265 per month.)

Median rents were up 6.7 percent year-over-year in Manhattan, with rents in doorman buildings spiking 7.8 percent, to $3,475 per month, while non-doorman buildings saw a 6.5 percent increase, to $2,685, the report says.

“You can see that this collapse in inventory bumped purchasers into the rental market,” Miller said. “You are having this shortage of supply continue to press prices higher,” a trend that is set to continue in 2013.

But those increases pale in comparison to the swelling rents across the river.

“The rate of growth [in rents] is rising,” Miller said. “It’s happening even more steeply in Brooklyn.”

Indeed, in March the median rental price in Brooklyn grew 11.3 percent year-over year to $2,560 — almost double the percentage growth in Manhattan, where rents rose a not-too-shabby 6.7 percent year-over-year to $3,195, the report says.

The increases come after a brief period where renters appeared to be resisting the ever-higher rents for which New York City, and especially Manhattan, is known.

“This winter extended a little longer than most,” said Gary Malin, president of Citi Habitats, which also published a monthly market report today.

But following five months of rents trending downward, they sprang back up in January and February, despite the season, Malin said.

He agreed that the tight sales market was driving up rents, but predicted that while rents will rise in the coming months, they will not increase dramatically.

“You will see concessions become less, and prices will go up slightly,” Malin said.

Concessions were in play in 8 percent of rental deals tracked by Citi and 5 percent of deals tracked by Elliman, figures show. Citi’s numbers reflect only deals brokered by the firm.

The Manhattan vacancy rate was 1.4 percent, Citi’s figures show.

In March, the average rent for a studio — the unit type that showed the steepest rent increase — was $1,986 per month, or 2.4 percent higher than a year ago, according to the Citi report.

But with rents propelled by record-low inventory, there is no relief in sight for weary renters.

“The hiring outlook is not so strong,” Malin said. “It’s real difficult in the city these days, unless [renters or buyers] have sizable budgets.”

CORRECTION: An earlier version of this story incorrectly cited the percentage increase in meidan sales prices in Manhattan and Brooklyn, instead of median rents. The story has been updated with the correct figures.

 

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