A new report started circulating today indicating that really, truly, after years of astronomic increases, median rental prices in Manhattan have actually dipped a bit. Admittedly, it’s a significant change of pace. Elsewhere, though, Brooklyn’s home prices have hit their highest point in a decade, and realtors graced us with the fairly obvious revelation that Brooklyn “isn’t a discount neighborhood anymore.”
The answer may not be as simple as “Brooklyn is the new Manhattan” (ugh), but the two statistics aren’t exactly unrelated. The price drop in Manhattan (which, realtors note, is really more of a gentle plateau than any kind of significant sea change, and at a median of $3,095, is still expensive as hell) is partially due to an increase in the number of renters looking to buy places instead, or taking their money to Brooklyn’s market, or both.
“The term bridge-and-tunnel is gone far and away. Brooklyn has changed the mindset,” said one Douglas Elliman realtor. That, and the fact that the brand new buildings in Brooklyn most residents decry as cripplingly expensive are still much, much cheaper than anything going up in Manhattan.
“Land costs are less there than in Manhattan,” said Citi Habitats president Gary Malin. “So you’re getting nice new buildings [that] can be 20 to 30 percent less than Manhattan, and people often want to be the first in a building and want the latest and greatest.” And, as Brownstoner notes, tight inventory and rising demand for buyers in Brooklyn has, in turn, pushed rental prices in the borough higher than ever before. Or, as the author of Elliman’s report put it, “I don’t see much relief to tenants in either market.”
So, for the time being, Manhattan’s (extremely minor) gain is, in all likelihood, a net loss for Brooklyn’s affordability. And if you’re starting to suspect that every new piece of real estate news just means, in some way or another, that your rent is about to go up, you’re probably not wrong.
Follow Virginia K. Smith on Twitter @vksmith.