The Real Deal New York

Brooklyn rents immune to fall slowdown, while Manhattan chills

By Mark Maurer | November 13, 2013 12:01AM

Still cooling off from the summer, Manhattan rents in October declined for the second month in a row over the previous year – and only the second time since June 2011, according to a monthly Douglas Elliman rental market report released today.

Amid a modest rise in mortgage rates, the median rent in the borough fell 1.6 percent year-over-year to $3,150 per month from $3,200 per month, the report says. The average rent per square foot slipped 5.8 percent year-over-year to $49.71 from $52.78, Elliman data show.

“Some of the weakness we’re seeing was created by a summertime surge in sales,” said Miller Samuel CEO Jonathan Miller, who authored the report, explaining that the consequent slip in demand for rentals meant lower prices. “More tightness is in store for the rental market.”

The number of new rental listings in Manhattan rose 18.1 percent year-over-year, and rental vacancy rates hovered around the same level – to 2.4 percent, up from 2 percent, the Elliman report said.

Of all the Manhattan neighborhoods, the Lower East Side saw the biggest comparative increase in prices since September, primarily caused by “high demand for doorman units rising across the board,” according to a report from brokerage MNS also released today. It grew 4.3 percent to an average price of $3,343 per month from $3,205 per month.

Brooklyn, meanwhile, is maintaining brisk price growth. Median rent last month was the third highest in six years, according to Elliman, rising 6.8 percent year-over-year to $2,699 per month from $2,527 per month.

Average days on market were in flux. It was 48 in October, down a third from 72 this time last year but up 45.5 percent from 33 in September. The average rent per square foot was $43.57, a year-over-year boost of 25.5 percent.

Overall, new rental transactions in Kings County saw a strong increase, climbing 37.2 percent to 443 from 323. The number of new Brooklyn rentals for apartments with three or more bedrooms soared 86.7 percent to 56 from 30 in the same period in 2012.

“There is more resistance by tenants to agree to a renewal, and they seek affordability elsewhere,” Miller said.

Williamsburg prices increased in every unit type and by a larger margin than any other neighborhood in the borough versus September. Every Brooklyn neighborhood except Boerum Hill saw an increase in average rents in October, MNS data show. CEO and founder Andrew Barrocas attributed this to a lack of new inventory.

He singled out Dumbo, which serves as a ceiling for pricing in Brooklyn, noting that rent for a studio in the neighborhood rose for the third straight month, to $3,145 per month. The last time the price passed the $3,000 mark was last October, when it was $3,350 per month, the data show. “I have been watching that number for the last several months,” said Barrocas, “as rents continue to grow.”

A report from Citi Habitats, which also tracks the monthly rental market, was not immediately available by press time.