Apartment rents rise to record $3,985 in Downtown Brooklyn
High demand, drop in inventory seen citywide
Rents in Downtown Brooklyn rose 36.6 percent year-over-year in the fourth quarter of 2021, reaching $3,985 — the highest increase in StreetEasy’s records.
This was only one of the findings of StreetEasy’s new quarterly report on rental housing in New York City. StreetEasy is a well-known real estate listing platform and real estate marketplace.
Of all Brooklyn neighborhoods, Downtown Brooklyn rents rose the most year-over-year, the quarterly report says. In addition, apartments with a concession were harder to find in Brooklyn in the fourth quarter than any other point last year.
Borough-wide, 13.8 percent of rentals on the market were advertising a concession during the fourth quarter. For comparison, 24.9 percent of Brooklyn rentals were advertising a concession in the first quarter of 2021. A concession is basically an incentive given to a renter to sign a lease — for example, a month’s free rent. Concessions on rental apartments began to rise at the beginning of the COVID pandemic in 2020 as the market temporarily froze.
Demand for larger units also grew in Brooklyn, the report said. Median asking rents for apartments with three or more bedrooms rose the fastest in Brooklyn, up 14.3 percent from the previous year to $3,199. Rents for 2-bedroom units rose 8.3 percent to $2,600.
As inventory tightened, rent prices rebounded dramatically since the start of the year. In the first quarter of 2021, the median asking rent for the entire city fell to the lowest level on StreetEasy record ($2,420). Soon after, there was a resurgence in the rental market, with rents rising quarter over quarter.
The median asking rent in New York City rose to $2,700 in the fourth quarter — an increase of 8.2 percent from the previous year and 11.6 percent from the first quarter. This was the largest annual increase in rents for any given quarter on StreetEasy record.
While rents are rising considerably, they have not yet reached their pre-pandemic highs, StreetEasy said. Prior to the pandemic, rents in the summer of 2019 were around $2,850 — $150 more per month than they are currently.
Because of seasonality, it’s typical to see rent growth slow during the winter months, which StreetEasy expects will be the case heading into 2022.
The rentals market saw an incredible comeback at the end of the year, which is good and bad news for renters. StreetEasy economist Nancy Wu believes there’s a shift coming soon.
“The market is in the process of normalizing after nearly two years of uncertainty. That’s good news for the city’s recovery overall, but it’s understandable that many renters or hopeful renters might be feeling uneasy right now,” said Wu.
“This winter will bring a lot of change to the rentals market. Concessions that landlords gave at the beginning of last year will expire, leaving many renters with no choice but to move out of their COVID-era discounted rentals. This should boost inventory in the most competitive neighborhoods and give renters on the market some reprieve from the rapid price growth we’ve seen throughout the last year,” she said.
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