Manhattan and Brooklyn Rents Increase at Half Their 2015 Pace

Price growth among luxury rentals slows the most, according to the August 2016 StreetEasy Market Reports

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StreetEasy

Sep 30, 2016, 05:00 ET

NEW YORK, Sept. 30, 2016 /PRNewswire/ --

Key facts for August 2016:

Manhattan's median rent increased 2.9 percent year-over-year to $3,320, half the pace of growth at this time last year (5.8 percent).
Brooklyn's median rent increased 1.9 percent to $2,932, the slowest annual growth since December 2010 and less than half the growth in August 2015 (4.7 percent).
East Brooklyn's rent increased 5 percent, which was the most of any submarket in either borough.
Luxury rentals are slowing to a 2010 rate of price growth with 2.2 percent price growth in Manhattan and 2.7 percent growth in Brooklyn.
Homes in Northwest Brooklyn stayed on the market the longest at a median of 26 days. Homes in Upper Manhattan rented the fastest at 21 days.

While sales price growth in Manhattan and Brooklyn has been slowing over the past year, the rental market is starting to follow suit, with the luxury market leading the way. Overall, median rents in both Manhattan and Brooklyn continue to increase as of last month, but grew at only half their 2015 pace, according to the August 2016 StreetEasy® Market Reportsⁱ.

In August, Manhattan's median rent increased 2.9 percent to $3,320, according to the StreetEasy Rent Indicesⁱⁱ. At this time last year, rents increased 5.8 percent year-over-year in Manhattan. The Midtown and Downtown submarkets experienced the greatest annual increase in rent, at 3.2 percent and 3.1 percent, respectively. Upper Manhattan and the Upper West Side had the smallest rent growth at 2.6 percent and 2 percent, respectively.

Brooklyn's median rent increased 1.9 percent year-over-year to $2,932, the slowest annual growth since December 2010 and less than half the year-over-year growth recorded in August 2015 (4.7 percent). East Brooklyn's median rent rose 5 percent - the greatest increase in rent among submarkets in both boroughs.

"The rental market was much calmer this summer than in years past," said StreetEasy economist Krishna Rao. "Though rents in Manhattan have been rising, this is mainly due to demand at the bottom of the market. Rentals in Brooklyn are following a similar pattern as competition for rentals at the lower end of the market remains tight. However, a surplus of luxury units may give negotiating power to those looking within this higher price point."

When examining each borough by price tier, the overall declines in price growth can be attributed to the luxury segment. The most expensive rentals in Manhattan experienced the least growth of all price tiers and the lowest price growth since September 2010, increasing 2.2 percent since last year. By contrast, rents for the least expensive rentals grew twice as fast, increasing 4.4 percent. Brooklyn shows a similar trend at work as the price of luxury rentals increased 2.7 percent since last August, which is the lowest price growth since July 2010. Meanwhile, median rent of Brooklyn's least expensive homes increased 6.1 percent.

Brooklyn rentals sat on the market for a median of 23 days, three days faster than last year. Homes in Northwest Brooklyn took the longest to find a renter at 26 days, compared to a median of 21 days in August 2015. In Manhattan, rentals remained on the market for a median of 22 days, only one day longer than last year. The Upper West Side and Midtown were the only submarkets in which properties rented more quickly, a decrease of two days and 2.5 days, respectively. Homes in Upper Manhattan rented the fastest at a median of 21 days.

According to the StreetEasy Rent Forecastsⁱⁱⁱ, Manhattan's median rent will increase 4.3 percent over the next 12 months to $3,461, while Brooklyn's median rent will increase only 2.9 percent to $3,016. Manhattan's Downtown submarket is expected to have the most growth, increasing 5.4 percent. The North Brooklyn submarket is forecasted to have the least growth, rising only 1 percent.

The complete StreetEasy Market Reports for Manhattan and Brooklyn with additional analysis, neighborhood data and graphics can be viewed at streeteasy.com/blog/market-reports.

Region	August 2016 StreetEasy Rent Index	Annual Change	August 2016 Median Rental Days on Market
Manhattan	$3,320	2.9%	22
Downtown	$3,755	3.1%	22
Midtown	$3,441	3.2%	23.5
Upper West Side	$3,203	2%	22
Upper East Side	$2,802	3%	22
Upper Manhattan	$2,387	2.6%	21
Brooklyn	$2,932	1.9%	23
North Brooklyn	$3,174	0%	22
Northwest Brooklyn	$3,092	3%	26
Prospect Park	$2,884	2.9%	23
South Brooklyn	$1,771	0%	22
East Brooklyn	$2,544	5%	22

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 the Flatiron neighborhood of Manhattan. StreetEasy is owned and operated by Zillow Group (NASDAQ: Z and ZG).

StreetEasy is a registered trademark of Zillow, Inc.

ⁱ The StreetEasy Market Reports are a monthly overview of the Manhattan and Brooklyn sales and rental markets. Every three months, a quarterly analysis is published. 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 2005 in Brooklyn. The reports are compiled by the StreetEasy Research team. For more information, visit http://streeteasy.com/blog/market-reports/. StreetEasy tracks data for all five boroughs within New York City, but currently only produces reports for Manhattan and Brooklyn.
ⁱⁱ Median resale prices are measured by the StreetEasy Price Indices. Also referred to as the StreetEasy Manhattan Price Index (MPI) and StreetEasy Brooklyn Price Index (BPI), the metrics 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 2005 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 sales of homes is sourced from the New York City Department of Finance. Full methodology here: http://streeteasy.com/blog/methodology-streeteasy-price-indices/
ⁱⁱⁱ The Manhattan Price Forecast and the Brooklyn Price Forecast predict the change in resale prices 12 months out from the current reported period. Each forecast incorporates the Price Index for each borough as well as a mix of fundamental market factors including: historical recorded sales price, household income, population, and taxes.