A new study has unearthed soaring rents in Brooklyn as renters are continually pushed out of Manhattan by, you guessed it, soaring rents.
For the privilege of living in swanky Manhattan renters are now paying $3,190 per month on average, which is only 4.7% more than a year ago, but still high by comparison to surrounding areas. As a result more people are being forced out of Manhattan itself into surrounding areas. Areas like Brooklyn where the average rental rate has grown 7.2 percent to $2,590 in the past year.
"Brooklyn is hot, on fire," Douglas Elliman director of rental Mark Menendez told World Property Channel. "It's the result of a lot of buyers and renters pushed out of Manhattan."
Luxury apartments in Brooklyn have experienced even more ferocious growth, with renters now paying $5,165 on average, an increase of 31.6% compared to last year according to the firm.
Listing discounts in Brooklyn were slashed to 6.4 percent, compared to 11.8 percent last July, as landlords were hesitant to make deals. The average days on the market for an apartment in Brooklyn fell to 43 days, five days faster than a year ago.
Other outlying areas are also seeing new activity as renters look for alternatives to Manhattan.
"We're starting to see requests from other neighbourhoods that we haven't seen in recent years," Mr. Menendez said.
The vacancy rate in Manhattan remained a light 1.69 percent, unchanged from a year ago, according to the new study. With sale prices soaring and rental prices high, renters in Manhattan are reluctant to abandon their apartments to search for something new.
"Tight credit is keeping many people from making the transition from rental to sales," said Jonathan Miller of Miller Samuel Real Estate Appraisers, which conducted the study.
When they do decide to move, Manhattan is no longer always the best option.
"It's this quest for affordability," Mr. Miller said. Rent increases in outlying areas are the result of "people chasing affordability."
Spring is usually the busiest time of year for the Manhattan rental market, but it is unclear how many apartments will open up Mr. Menendez said.
"I think everybody is in a holding pattern, waiting to see what happens," he said.
- Friday 15 March 2013