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New Construction Easing Rental Pressure in Manhattan and Brooklyn

Rents fell 1 percent in Manhattan and 4.2 percent in Brooklyn compared to last year, according to the Q1 2017 StreetEasy Market Reports

Apr 28, 2017

NEW YORK, April 28, 2017 /PRNewswire/ -- Rents in both Manhattan and Brooklyn continued to decline as new construction saturated the market, according to the Q1 2017 StreetEasy® Market Reportsi.

"A surge in new construction, particularly at the high end of the market, has had a ripple effect throughout the market and pushed down rents across the city, particularly in Brooklyn," said StreetEasy Senior Economist Grant Long. "Renters planning on signing a new lease this year are likely to have more negotiating power as competition starts picking up among new buildings vying for the attention of prospective tenants.

"On the for-sale side, homes spent a bit longer on the market than usual in Q1, but this will likely fall as we get into peak home shopping season this summer," Long added. "If you're looking to buy this year, expect strong competition throughout Manhattan and Brooklyn, especially in more affordable areas that are attractive for first-time buyers."

Q1 2017 Key Findings - Manhattan

  • Manhattan rent prices continue to decline. Manhattan's median rent price was down 1 percent compared to last year and has dropped steadily since last fallii.
  • Upper Manhattan the only Manhattan submarket where rent prices rose. The median rent price in Upper Manhattan was up 3.2 percent year-over-year, though the pace of growth slowed from the prior quarter.
  • Rents in hot Downtown Manhattan neighborhoods fell the most. Of the 19 neighborhoods where median asking rents fell year-over-year, 11 were in the Downtown submarket, including Little Italy, Battery Park City, West Village and Greenwich Village.
  • Median resale price in Manhattan rose just over 1 percent since last March. The Manhattan median resale price increased slightly to $987,997 in Q1 2017iii. Prices rose the most in Upper Manhattan, up 6.5 percent from Q1 2016 to $658,393.
  • Homes in Manhattan spent nearly 80 days on the market in Q1 2017, the highest level since 2011. In Midtown, homes spent a median of 92 days on the market, the longest period among all Manhattan submarketsiv.

Q1 2017 Key Findings - Brooklyn

  • Brooklyn rents fell to their lowest level since Q3 2014. Brooklyn's median rent price fell 4.2 percent relative to Q1 2016 and dropped steadily since fall 2016.
  • New construction around Downtown Brooklyn weighed on the Brooklyn rental market. Renters had 27.6 percent more options to choose from in Q1 2017 relative to the same period in 2016. Inventory in South Brooklyn jumped the most – up 45 percent year-over-yearv.
  • Brooklyn's median resale home price rose almost 6 percent over the past year. The median resale price was $578,290 in Q1 2017, with Prospect Park reporting the greatest annual price growth, up 11.7 percent since Q1 2016.
  • Prices rose the most in more affordable submarkets. In East Brooklyn, the median resale price was up 9 percent to $493,612. In South Brooklyn, the median resale price rose 7 percent to $435,068.
  • North Brooklyn was the only Brooklyn submarket with falling prices. The median resale price fell 4.75 percent from Q1 2016 to a median resale price of $865,804.
  • Buyers had more homes to choose from in Q1. There were 5.3 percent more homes for sale in Brooklyn relative to the same period last yearvi. North Brooklyn reported the greatest inventory gains among all Brooklyn submarkets, up 27.8 percent from Q1 2016.

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

March 2017
StreetEasy Price
Index

Annual
Change

March 2017
StreetEasy Rent
Index

Annual
Change


Manhattan

$987,997

1.1%

$3,199

-1.0%

Downtown

$1,206,675

0.3%

$3,610

-0.9%

Midtown

$852,068

-0.2%

$3,276

-2.6%

Upper West Side

$1,081,744

1.5%

$3,084

-1.7%

Upper East Side

$1,001,145

1.8%

$2,694

-0.3%

Upper Manhattan

$658,393

6.5%

$2,397

3.2%


Brooklyn

$578,290

5.9%

$2,771

-4.2%

North Brooklyn

$865,804

-4.7%

$2,873

-9.6%

Northwest Brooklyn

$857,042

3.4%

$3,012

-2.6%

Prospect Park

$832,574

11.7%

$2,709

-4.7%

South Brooklyn

$435,068

7.0%

$1,719

1.7%

East Brooklyn

$493,612

9.1%

$2,477

3.6%

 

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 Similar to the StreetEasy Price Indices, median rents are measured by the StreetEasy Rent Indices. By including only valid and verified listings from StreetEasy and employing a repeat rentals approach, the indices emphasize the changes in rent on individual properties and not between different sets of properties. Full methodology here: http://streeteasy.com/blog/methodology-streeteasy-rent-indices/ 
iii Median resale price is measured by the StreetEasy Price Indices, 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/  
iv Time on market is measured as the numbers of days from the original listing on StreetEasy to when it enters contract.
v Rental inventory data is based on rental listings of condos, co-ops, townhouses and single-family homes available on StreetEasy.
vi Sale inventory data is based on sales listings of condos, co-ops, townhouses and single-family homes available on StreetEasy.

 

SOURCE StreetEasy

For further information: Lauren Riefflin, StreetEasy, press@streeteasy.com


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