Apartment rents skyrocket in Brooklyn
Brooklyn apartment rents rose to a record in March and new leases more than doubled, extending a surge in housing demand in the New York borough that was once seen as a refuge from Manhattan's high costs.
The median monthly rent was $2,900, up 13 percent from a year earlier and the highest since appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate began tracking the market in January 2008. The number of new leases surged to 854 from 311 in March 2013, the firms said in a report today.
Brooklyn, the most populous of New York's five boroughs, has become a magnet for the young and affluent, who are drawn to its gentrifying neighborhoods. Last month's median rent was $300 cheaper than Manhattan's, compared with an average spread of about $1,100 in 2008, according to Miller Samuel and Douglas Elliman. Rental demand is also surging as the number of homes for sale in the borough tumbled to a six-year low.
"Brooklyn is on everybody's radar, and whatever type of housing you're in the market for, there isn't enough of it," Jonathan Miller, president of New York-based Miller Samuel, said in an interview. "Both the for-sale and rental markets are at or near record levels, and there's a chronic lack of supply."
Rental prices were up across all size categories in March. Apartments with three or more bedrooms had the biggest increase, rising 27 percent from a year earlier to a median of $4,450, Miller Samuel and Douglas Elliman said. The median rent for one- bedroom units was $2,747, up 16 percent.
Across the East River in Manhattan, the median monthly apartment rent was $3,200 in March, up 0.2 percent from a year earlier, according to Miller Samuel and Douglas Elliman. It was the first month without a year-over-year decline since August.
Brooklyn is adding residents and jobs at a faster pace than any other New York borough, sparking a boom in commercial development. Private-sector jobs in Brooklyn jumped 26 percent in the decade through 2013, Labor Department data show. In Manhattan, the increase was 13 percent for the period.
"Brooklyn is standing on its own and isn't overshadowed by Manhattan as a destination," Miller said.
Home sales in Brooklyn fell 2.2 percent in the first quarter from a year earlier as inventory shrank, while the median price climbed 1 percent to $520,000, Miller Samuel and Douglas Elliman said today in a separate report. The number of listings dropped 13 percent to 4,092 properties.
Homes spent 131 days on the market, down from 160 days in the first quarter of 2013, the firms said.
Francis Bradley and his wife, Jessica Athens, are trading their three-bedroom Park Slope co-op for a bigger place in gentrifying Bushwick. They received multiple bids for the Park Slope apartment, which they purchased for $770,000 in December 2012 and spent $75,000 renovating. It was on the market for less than two weeks when the couple had a contract to sell it for $999,999, Bradley said.
As buyers, their experience didn't go as smoothly. They bid on seven properties, sometimes losing out to people paying all cash, before securing a two-family home in Bushwick for $899,000, Bradley said.
The couple, who have a 3-year-old daughter, intend to rent out the garden-level apartment. The family will live in the top two floors, which have six bedrooms, including one where Bradley, 37, hopes to host jazz concerts.
"Bushwick is up for sale at the moment," said Bradley, an assistant professor at Brooklyn's Pratt Institute. "We wanted to get in on that because there's more space. And given the price, it's still relatively affordable compared to Park Slope."
Bradley's agent, Scott Klein, a broker with the Klein Zelermyer-Diaz Team at Douglas Elliman, said demand for Brooklyn homes remained strong, even with the harsh winter weather. Bradley's open house attracted about 25 would-be buyers in January, he said.
"There's not a lot of sales inventory, but there are a lot of people with money," Klein said.
In the area that includes Bushwick, the median sale price for multifamily townhouses was $935,000 in the first quarter, up 31 percent from a year earlier, according to a report today by Corcoran Group.
The median price of condos in the Fort Greene, Clinton Hill and Prospect Heights neighborhoods was $740,000, up 30 percent from the first quarter of 2013 and the highest in five years of record-keeping, the brokerage said.