Median rents in Manhattan were up in February for the 12th straight month, while Brooklyn saw a slight decrease that doesn’t appear to be the start of a downward trend, according to Douglas Elliman’s latest rental market report.
The median rent in Manhattan was $3,375, up 8.9 percent from last year, while median rent in Brooklyn slipped just 0.9 percent to $2,863, the first decline in five months. Average rents in Manhattan increased 4.1 percent to $4,093, while average rents in Brooklyn were down 0.6 percent to $3,160.
“The way I look at Brooklyn is it’s trying to level off,” said Jonathan Miller, the founder of appraisal firm Miller Samuel and the author of the Elliman report. Brooklyn median rents have declined three times in the past 21 months, he said, indicating that the drop could be somewhat random and part of a larger “high plateau” trend, where rents are generally increasing with some slight bumps.
“Will tight credit ease rapidly starting tomorrow? No. We have near record employment growth in NYC. Will that stop tomorrow? No,” Miller said.
As in recent months, the report shows that median studio and one-bedroom prices are seeing sharper rent increases than larger apartments, a trend fueled by renters who might have been first-time home-buyers in a market with looser credit and more affordable sales inventory.
In Manhattan, median studio rents rose 10 percent since last year to $2,531 and one-bedrooms rose 9.4 percent to $3,400, prices that Miller says are the highest he’s seen since he started keeping track over seven years ago. Manhattan two-bedroom median prices rose just 2 percent to $4,750, while three-bedroom median prices sunk 5 percent to $6,509.
This “logjam” that is forming on the lower end of the market is also partially caused by the fact that most new housing stock is luxury development.
The Brooklyn market is also skewed in this direction, with median studio prices rising 0.9 percent to $2,281 from last year, and two-bedrooms decreasing 3 percent to $3,061.
In Queens, rental prices remained stable compared to last year, but Miller said that the market is incredibly volatile due to high levels of new development. Last month, new development accounted for a full third of all rentals.
In Manhattan, the neighborhoods with the highest vacancy rates were the East Village, at 2.19 percent, and the West Village, at 1.98 percent, according to another rental report by Citi Habitats, also released today. The high vacancy in these traditionally coveted neighborhoods could suggest that renters are being priced out, according to the report. Murray Hill had the lowest vacancy, at 0.74 percent.