An NYC newbie might look at the data from Elliman's monthly rental market report for November and say, "Hey, the rents in Manhattan have declined for three straight months now. Yippee!" The median rental price did, once again, drop year-over-year, down 3 percent to $3,100/month. Hold up: report guru and general market whiz Jonathan Miller cautions that Manhattan renters should contain their glee. "We are seeing rents top out, but the market is still strong," he says, adding that the rental market saw much of its number exit in order to buy this summer in a flurry of record sales activity. Vacancy rates rose to a relatively high 2.8 percent, and so in order to appease renters, landlords were more willing than usual to offer concessions (say, a free month's rent). Yet, concludes JMillz, "I don't think we should expect a long downward trend in rents. The key driversrising NYC employment and tight creditremain in place. I see rents bouncing up and down going forward on some sort of plateau and remaining at a high level."
Meanwhile, brokerage MNS breaks down its extensive monthly report by neighborhood and type of apartment. Taking all the data together, though, Midtown West, Battery Park City, and the East Village saw the most intense rent hikes, while rents dropped for the Upper East Side, Chelsea, and the Lower East Side.
Let's turn our attention to Brooklyn, once seen as a bastion of affordability. Not anymore, folks, given that Elliman found median rents in the booming north and northwest parts of the borough rose yet again, this time by 3.8 percent to $2,800/month. And as rents are climbing, the availability of rentable apartments is decreasing: the number of new rentals slipped 6.5 percent from November of last year. The gap between Brooklyn and Manhattan median rents continues to narrow, with only $300/month between them now. "I see Brooklyn as about a year behind the Manhattan cycle," Miller says. "I think they have more upside, whereas Manhattan more stable." But, fear not, there's relief ahead, in the form of increased supply: "Much of the new development in Brooklyn is rental, so that will temper growth next year, whereas most of the new development in Manhattan is condo."
Looking at Brooklyn area by (select) area via MNS, we see that the gentrification hotspots Bed-Stuy and Bushwick have seen the biggest year-over-year rent hikes. Those areas, plus Cobble Hill, all posted jumps in the double digits. The main drivers of these increases, according to MNS, are high demand for studios and two-bedrooms. Onto December.
· November 2013 Manhattan and Brooklyn Rentals [Elliman]
· Manhattan Rental Market Report November [MNS]
· Brooklyn Rental Market Report November [MNS]
· Rental Market Reports coverage [Curbed]
· All Market Reports coverage [Curbed]