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Rents Near a Five-Year Peak in Manhattan and Brooklyn

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It's all about rentals this month. Brooklyn continues to star in the five-man show —despite a small scaling-back from gangbusters March—where median rental prices in the Elliman-tracked (PDF!) north and northwest Brooklyn rose for the eleventh consecutive month—that is, year over year—pitting April's median rent of $2,805 against last April's $2,700 and falling just slightly from March's $2,900. Tight conditions are the culprit here, and yes, prices are just going to keep going up in the long run despite the slight general downturn from March. Here's some numbers to back it up: Brooklyn saw a relatively substantial addition of 561 new rental units in April, a 57.1-percent increase in offerings from March 2013 but down a hair from March 2014's massive offering of 854 new units. Median rental prices reacted accordingly in Brooklyn, where median studio costs inched up from from March's $2,175 to $2,200. Why is the rental market so jammed up? Three Cents Worth's Jonathan Miller explains that there are a few factors: 1) Tight credit and a lack of mortgage lending has tipped would-be buyers who can't secure funding back into the rental market, and 2) As the employment market throughout the city continues to expand, the less-rigid rental market responds. Brooklyn has become a key competitor with Manhattan.

While rents continue to be driven upward, they won't continue to surge as previously seen. As Miller explains, the Manhattan market now finds itself "stuck at a high plateau with small ups and downs for the near term." But that doesn't mean there isn't exciting news to share about the petit borough: This April marks the lowest April vacancy in four years at 1.45-percent, even when median rents in Manhattan land at $3,247, making it the second highest median rental price the borough's seen in five years. According to Elliman (PDF!), April marks the second consecutive year-over-year monthly increase after six consecutive months of decline, which is attributed to 2013's larger-than-normal sales volume (Remember those would-be buyers whose inability to secure a mortgage pushed 'em back into the rental market.) So what're the numbers reading?: Median Manhattan rental prices rose $47 from March to $3,247 with a 3.2-percent upswing in volume of new rentals from March to 4,021. While rental costs generally decreased from mad March, rents are up across the board from April 2013.

Compared to last year, the time a Manhattan rental sat on the market decreased by one week with landlord concessions falling from January and March's 13.1-percent and 9.4-percent, respectively, to 6.8-percent. With inventory snatched off the market at a quicker pace, and availability tight to begin with, prices are bound to go up, up, up.
· April 2014 Manhattan and Brooklyn Rentals [Elliman]
· Market Reports archive [Curbed]