Brooklyn’s real estate revival has been well chronicled. This is particularly true for certain neighborhoods, such as DUMBO, Cobble Hill, Williamsburg, and Greenpoint. The Real Estate Board of New York’s (REBNY) third-quarter report showed the borough’s median sales price rose 12% compared to a year ago, to $770,000, and the price per square foot was 17% higher, or $600.
The median condo price jumped 18% to $931,000 while the co-op sales price was flat at $536,000. The market’s boom could also be felt in the rental market, where the cost shot upward over the last several years. However, most recently, there is evidence developers may have overbuilt, and the rental market has cooled. This means there are relative bargains, particularly compared to the past few years.
The Rental Market
Brooklyn’s average rental price fell 0.5% in December versus the prior month, to about $2,731, according to an MNS report. Studio and one-bedroom rents fell by 0.7% and 1.3%, to $2,172 and $2,581, respectively. Rents for two bedrooms did rise a bit, by 0.2% to $3,397.
A longer term report prepared by a different company showed a clear longer-term downward trend. Brooklyn’s median rent was down sharply to $2,613 from $2,936, the 2014 peak. The latest figure includes various landlord concessions offered to prospective tenants. December’s rents were down 2%, including concessions, compared to the year earlier. Approximately 46% of the listings had concessions (the highest on record) versus 14% in December 2016.
Additional supply has been weighing on the market. A data service showed 27,000 additional rental units entered the market since 2008, with 5,700 in just the last year. This is not expected to abate anytime soon. Over the next two years, the data service projects the borough will add another 14,000 units.
A neighborhood watch
MNS noted large year-over-year percentage decreases in Greenpoint, Clinton Hill, Prospect Lefferts Gardens, and Williamsburg. The average rental price declines ranged from 1.6% to 3.8%. There were smaller decreases in the Fort Greene and DUMBO neighborhoods, although the latter is Brooklyn’s most expensive rental area.
We can look a little deeper into some of the more trendy neighborhoods. Market forces continued to weigh heavily on Williamsburg’s rents, with the average rental price dropping 4.1%. Bedford Stuyvesant’s average rent fell by about 0.6% versus the prior month, continuing a three-month decline. Boerum Hill, Brooklyn Heights, Cobble Hill saw rents fall by 1.7%, with Bushwick’s dropping 1.6%. Clinton Hill’s declined by 0.7%; Crown Heights was down 2.4%.
It is not easy to find a time when rent prices are falling. This is particularly challenging when the economy is humming along like it has been for the past several years. However, the supply/demand imbalance presents a compelling rental opportunity for those seeking life in Brooklyn.
This means you can take your time to find the right rental for your needs. You don’t have to feel pressured, and you should hunt for landlord concessions, which may include at least a free month’s rent and paying the broker’s commission.