Brooklyn rents hit new record, Manhattan prices soar

Queens prices rise thanks to new development: Elliman
By E.B. Solomont | August 13, 2015 08:00AM

Median rental prices rose across Manhattan, Brooklyn and Queens last month, while in Brooklyn, rental prices set a new record, according to Douglas Elliman’s latest monthly rental report.In Brooklyn, the median rental price rose 4.1 percent year-over-year to $2,968 – just $451 less than Manhattan. Meanwhile, Manhattan’s median rental price rose 6 percent to $3,419, according to the report.

“Ho hum, another month of records,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel and author of the report. The July increases followed months of consecutive price jumps.

In Manhattan, the median price of $3,419 was the second-highest on record, following a median price of $3,695 in February 2009, which Miller said was an outlier.

Meanwhile, the average rental price in Manhattan in July was $4,031, up 0.2 percent from last year, while the vacancy rate increased to 2.48 percent from 1.82 percent. The number of new rentals increased 12.2 percent to 5,540.

“The drivers are a robust city economy with near-record employment, and tight credit,” Miller said. “You’re still seeing many first-time buyers tipped back to the rental product.”

To that point, he said, the largest price gains in July were seen in smaller apartments, including studios and one-bedrooms. The average studio rental price was $2,669, up 3.7 percent, while the average one-bedroom rental price was $3,447, up 2.9 percent. “You’re just seeing this strength at the bottom because of the logjam of would-be buyers.”

In Brooklyn, where the median rental price was $2,968, the average price rose 1.9 percent to $3,245. There were 909 new rentals, up 1.9 percent, compared with Manhattan’s 12.2 percent increase to 5,540 new rentals.

In Queens – where rents declined in recent months – the median rental price jumped 14 percent to $3,016 – $48 more than Brooklyn and $403 less than Manhattan. The average rental price rose 12.7 percent to $3,054.

“What it has to do with is a concentration of new development units that make up the market,” Miller said. In the month of July, he said, 36.1 percent of the rental activity was in new development buildings.

In a separate market report, also published today, brokerage Citi Habitats called July a “mixed bag,” given high rents but also a relatively high vacancy for this time of year. Citi Habitats said the Manhattan vacancy rate was 1.42 percent. At the same time, the report found that 8 percent of Citi Habitats’ deals included a free month’s rent or other incentive.

“Tenants have begun to strike back – by postponing moves, staying put, or exploring housing alternatives in the outer boroughs,” President Gary Malin said in a statement.