A market like New York's, where capital of cool Brooklyn's median sales price is now at an all-time high, is not a great place for first-time buyers. In the post-2008 economy, it's still really tough to get a mortgage, meaning many of the people who dreamed of their own little slice of New York are being forced back into the rental market. This has been the case for a while now, data whiz and Elliman reports compiler Jonathan Miller says, but it continues to put a strain on the city's small apartment housing stock. According to Elliman data, rental prices for studios and one-bedrooms are on the rise across the city: in Manhattan, Queens, and Brooklyn, rents for small apartments are essentially up across the board, but for a $7 hiccup in the price of Brooklyn one-bedrooms. The median price for a Manhattan apartment of any size these days is an eye-popping $3,395 per month, but when considered alongside the $3,427 median Manhattan one-bedroom, roommates might sound really appealing.
In March, a one-bedroom in Brooklyn was asking a median of $2,650, and a one-bedroom in Queenskeeping in mind that Elliman's data only tracks rentals in Astoria, Long Island City, and Sunnysidewas asking $2,957. That's right, all those shiny new rentals in Queens have outpaced Brooklyn's one-bedrooms, at least for now. What gives? Jonathan Miller suspects that, up until this point, the demand for rental apartments in Queens has been so strong that it's drastically driving the cost of land prices up, so much so that developers are being forced to raise their prices and even resort to building condos rather than rentals. The phenomenon isn't particular to Queens; it's also happening in Brooklyn. Brooklyn's lower median rent this month may be explained by Elliman's coverage area in the borough, which extends far beyond where shiny and new apartments are being built.
Jonathan Miller says that Brooklyn rentals remained on a "high plateau" in March, where the median price of small rentals is increasing more quickly than the median rent of larger apartments. That's bad news for anyone hoping the market will turn around: coming off of 2008, lending is still and will continue to be lorded over with an iron fist. Also, employment is still on the rise. As apartments continue to remain in demand, their prices will reflect that. Like here, for example: median rents in Manhattan in March were the second highest that they've been since the financial meltdown. "Housing tension seems to be unrelenting," Miller says, and with smarter financial practices at play, it seems rents will just continue their unrelenting ascent.
· Manhattan, Brooklyn, and Queens Rental Report [Elliman]
· Rental Market Reports archives [Curbed]