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Brooklyn backs off in New York rent face-off

By Dan Orlando

Brooklyn is losing ground in its bid to challenge Manhattan as the most desirable borough to live in. Citi Habitats COLORRental Market Report May 2014

Despite pulling within $200 of average Manhattan rents earlier this year, Brooklyn may have reached the peak of its surge.

“We were wondering what was going to happen with the spread between Manhattan and Brooklyn. We started to think maybe Brooklyn is hotter than Manhattan. But the spread has actually widened,ˮ said Luciane Serifovic, executive vice president and director of rentals at Douglas Elliman.
“Brooklyn was like a skyrocket, now we are realizing that it’s leveling off.”

This month’s rental reports showed that while Manhattan’s average rents continued to climb upwards, reaching $3,451 in May, the Brooklyn average has “stabilizedˮ at $3,119.

Two and three bedroom apartments in Kings County showed weaker price trends with the addition of new rental housing stock and intense competition from the purchase market, according to the Douglas Elliman Brooklyn Rental Report for May.

LUCIENE SERAFOVIC
LUCIANE SERIFOVIC

According to the brokerage, there was a sharp drop in new rentals from the same month a year ago as more tenants were resigned to sign their leases at time of renewal.

Back in Manhattan, renters have little to look forward to this summer in terms of pricing.

“The Manhattan rental market has strengthened considerably in a relatively short period of time,” said Gary Malin, president of Citi Habitats.
“Unfortunately for apartment seekers, all signs point to a competitive summer season.”

Studio and one-bedroom apartments, the most common units in the borough, saw the steepest increase, climbing to $2,128, or two percent, on last months rents.

Three-bedrooms climbed by one percent with two-bedrooms serving as the exception and dropping by one percent.

For one-bedroom homes, the average rent for May was $2,835. For two-bedrooms, it was $3,998. The average three-bedroom apartment rented for $5,203.

The most expensive neighborhood for renters in May was SoHo/TriBeCa, with a median rent of $4,550. Gramercy/Flatiron was the second priciest area, with a median rent of $3,580.

The least expensive area for renters in Manhattan during May 2014 was Washington Heights, with a median rent of $1,800.

GARY MALIN
GARY MALIN

The vacancy rate, which sat at 1.36 percent in April, dropped to 1.17 percent. Vacancy has not been this scarce since June of 2013 when the tally sat at 1.10 percent, according to Citi Habitats.

Landlord concessions have also headed downward in Manhattan with the amount of incentives — such as a free month’s rent or a waived broker fee — dipping from nine to seven percent.

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