Brooklyn Overtakes Manhattan as Home to Most Competitive Rental Market in August

NEW YORK, Sept. 25, 2015 /PRNewswire/ --

Key facts

• The fastest-moving neighborhoods for rentals in August were Brooklyn's Midwood and Prospect Park South, with rentals spending just 11 days and 13 days on the market, respectively. Rentals in Manhattan's Little Italy, Sutton Place and Upper East Side were close behind (14 days).
• Rentals in Midtown South and Downtown Brooklyn were the slowest to rent in August, with units spending a median time of 48 days and 30 days on the market, respectively.
• The median asking rent in Manhattan grew 3.3 percent over the last year to $3,460 in August, and was the strongest among one-bedroom units, which grew 3.7 percent to $3,370.
• Brooklyn median asking rent increased 4 percent over the last year to $2,650 in August. Median asking rent for larger units in Brooklyn rose the fastest, with median units with 3+ bedrooms increasing 6.7 percent from last year to $3,200.

While the New York City sales market experienced a typical late summer lull, the rental market was hot in August, particularly in Brooklyn. In Brooklyn, rentals spent a median of 18 days on the market in August, a record low for the year that was previously set in May. In Midwood and Prospect Park South, renters had to move even quicker, with rentals spending just 11 days and 13 days, respectively, on the market – the shortest time on market among all Brooklyn and Manhattan neighborhoods StreetEasy tracks. In Manhattan, the fastest-moving rental markets in August were Little Italy, Sutton Place, and Upper East Side where units spent a median of 14 days on the market, according to the August 2015 StreetEasy® Market Reports for Manhattan and Brooklynⁱ.

Renters also faced the steepest rent prices of the year. The monthly median asking rent in Manhattan grew 3.3 percent over the last year to $3,460 in August. Asking rent climbed the most for one-bedroom units in Manhattan over the last year, which grew 3.7 percent year-over-year to $3,370 in August. Price growth among studios and units larger than one bedroom were either negative or stagnant compared to August of last year.

In Brooklyn, the monthly median asking rent grew 4 percent from last year to $2,650 in August. Contrary to Manhattan, median asking rents for larger units grew the most in Brooklyn. The median asking rent for two-bedroom units grew 2 percent from last year to $2,550 in August. Asking rents for units with 3+ bedrooms increased 6.7 percent from last year to $3,200.

"Every New York renter knows it's all about speed, and that is especially true in Brooklyn. Renters in Brooklyn face the steepest competition for apartments and also carry the city's highest rent burden," said StreetEasy data scientist Alan Lightfeldt. "This trend will continue until income growth accelerates and the supply of affordable homes increases across the city."

The New York sales market was equally as competitive in August with the median resale price of all Manhattan and Brooklyn homes rising to another record high, though the pace of growth is slowing. Manhattan resale prices of all home types rose 6.7 percent from last year to a record $986,314, as tracked by the Manhattan Price Indexⁱⁱ. The Brooklyn Price Index also reached an all-time high in August, increasing 7.2 percent year-over-year to $538,563. Last year, prices in Manhattan and Brooklyn grew by 9.2 and 10.4 percent, respectively.

Sellers were still able to find willing buyers who were undeterred by high prices. Manhattan and Brooklyn homes that sold in August typically did so for 100 percent of sellers' initial asking price, a sign that competition remains tight among buyers in both boroughsⁱⁱⁱ. Bidding wars were the most prevalent in the Prospect Park, North Brooklyn, and Upper Manhattan submarkets where the typical home sold for much more than the home's initial asking price. The Prospect Park submarket in Brooklyn remained the most competitive area in Manhattan and Brooklyn; homes that sold there in August typically did so for 5 percent above the sellers' initial asking price. In Upper Manhattan, homes that sold in August typically did so for 0.9 percent above initial asking price, a sign that the lower price point in neighborhoods such as Central Harlem, Washington Heights, and Inwood are attracting greater interest among buyers.

Looking ahead to the fall, price growth in Manhattan will continue to slow with median resale prices expected to grow by 0.2 percent over the next month, according to the StreetEasy Manhattan Price Forecast. In Brooklyn, prices will decrease 1.6 percent over the next month, according to the StreetEasy Brooklyn Price Forecast^iv.  

Full reports and additional analysis for Manhattan and Brooklyn, including rental data and several other metrics new to the StreetEasy Reports, can be viewed at streeteasy.com/blog/market-reports.

About StreetEasy:

StreetEasy is New York City's leading local real estate marketplace on mobile and the Web, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages throughout New York City and the major NYC metropolitan area. StreetEasy adds layers of proprietary data and useful search tools to help home shoppers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City, as well as Northern New Jersey and the Hamptons.

Launched in 2006, StreetEasy is based in Manhattan's Flatiron neighborhood. StreetEasy is owned and operated by Zillow Group (NASDAQ: Z).

StreetEasy is a registered trademark of Zillow, Inc.

ⁱ The StreetEasy Market Report is a monthly overview of the Manhattan and Brooklyn sales and rental markets. The report data is aggregated from public recorded sales and listings data from real estate brokerages that provide comprehensive coverage of Manhattan and Brooklyn, with most metrics dating back to 1995 in Manhattan and 2004 in Brooklyn. The reports are compiled by the StreetEasy Research team. For more information, visit http://streeteasy.com/blog/market-reports/. StreetEasy also tracks data for the five boroughs within New York City.

ⁱⁱ The Manhattan Price Index (MPI) and Brooklyn Price Index (BPI) are monthly indices that track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2004 in Brooklyn. Given this methodology, each Index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Data on arms-length sales of homes is sourced from the New York City Department of Finance.

ⁱⁱⁱ The sale-to-list price ratio is the final recorded sale price divided by the initial asking price on StreetEasy, expressed as a percentage. A ratio above 100 percent indicates that the home sold for above initial asking price, whereas a ratio below 100 percent indicates that the home sold for less than the initial asking price.

^iv The Manhattan Price Forecast and the Brooklyn Price Forecast predict the change in resale prices one month out from the current reported period. Each forecast incorporates the Price Index for each borough, StreetEasy's comprehensive database of listing prices and days on market - two leading indicators to future resale prices to accurately forecast what next month's resale prices will be before the release of publicly recorded sales data.

SOURCE StreetEasy

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