Brooklyn’s rental rates are rising and catching up to rates in Manhattan.
A report released by Douglas Elliman Real Estate last week revealed that while Manhattan’s average rent price is 1.8 percent higher than that of August of last year, which marks a continuous trend of increase for 26 months in a row, Brooklyn’s rate grew almost three times as much, and is about 4.6 percent higher than it was around this time last year.
Jonathan Miller, president and CEO of the Miller Samuel Appraisal Group and the author of the report, said one of the biggest reasons for rising rents in New York City, and nationwide, has been the tightness of mortgage lending since the 2008 financial crisis.
“Renters who organically would have moved to the sales market are unable to qualify for a mortgage and are tipped back into the rental market, causing a log jam, so to speak,” Miller said. “Rental activity responds more quickly to improving employment than sales do.”
According to the Elliman report, Brooklyn saw a 166.3 percent increase in new rentals between August 2012 and July 2013, and apartments were on the market for three fewer days on average than in August of last year. Manhattan saw only a 44.9 percent increase in new rentals in the same period, which Miller said may be a matter of timing.
“Brooklyn appears to be about a year behind Manhattan,” Miller said. “In other words, Manhattan reacted first and in the search for affordability, pushed more would-be renters to Brooklyn and Queens.”
Self-labeled fourth generation Brooklynite and executive director of the Center for Real Estate Finance Research Edward Glickman said that Brooklyn rates in price-per-square foot still remain lower than Manhattan at the moment, but emphasized the value of a Brooklyn mailing address.
“Thinking of Brooklyn as a single market hardly does it justice,” Glickman said. “The hot Brooklyn markets are close to the City, still offer far better value, not to mention, a better vibe and food to die for,” he said.
Tisch junior Alex White said he, along with two roommates, pays $2,100 per month an apartment in Brooklyn.
“[It’s] a real pothole studio apartment in Brooklyn Heights,” White said. “It’s crazy, if the prices go up I don’t know what I’ll do. $700 a month is a lot to sleep on a couch.”
Meanwhile, Lauren Brandanz, a student in NYU’s graduate nursing program, said finding a decently priced rental is just about knowing the area.
“I’ll get an apartment where I get a job,” Brandanz said. “I grew up in Brooklyn so I know places that’ll never be as expensive as Manhattan.”
Miller said the current real estate climate means it’s difficult for NYU students looking for their first apartment to find an affordable rate.
“I don’t expect much relief in sight,” Miller said.
A version of this article appeared in the Thursday, Sept. 19 print edition. Cassandra Cassillas is a contributing writer. Email her at firstname.lastname@example.org.