November 14, 2012
Fort Greene Patch.com
Brooklyn Rents Tick Downward: Report
by Paul Leonard
It’s a welcome piece of good news for long suffering Brooklyn renters.
Median rents in a key sector of the borough’s housing market declined 2.8 percent in October to $2,527, according to an Elliman real estate report released Wednesday.
The survey includes hot Brooklyn neighborhoods like Fort Greene, Park Slope, Boerum Hill and Williamsburg.
The slight slip in prices might be attributable to a sizeable jump in the number of available apartments, which rose from 131 in September to 323 in October — an increase of 23.3 percent.
Average rental prices also ticked downward, decreasing 7 percent to $2,771.
Even with the good news, tough times for city renters still lay ahead.
According to veteran real estate analyst Jonathan Miller, the recent trend of slight rental price declines was almost certain not to last due to an improving employment picture and a persistently tight credit market.
“There used to be a natural ebb-and-flow where renters transition into buyers,” Miller said. “But even rock-bottom interest rates are falling on deaf ears because you don’t buy if you can’t qualify for a mortgage.”
That means there are still an elevated number of renters scrambling for the same number of units — meaning that rents would soon resume their upward momentum, according to Miller.
However, the question of by how much remains unanswered.
Miller said the steepness of rent increases in the coming years would mostly depend on the credit market.
But with the Federal Reserve vowing to keep interest rates low until 2015, there seems to be little chance of risk-adverse banks becoming more likely to write mortgages for renters-turned-homebuyers.
“A year from now we’re going to see a similar snapshot of elevated rent prices,” Miller said.
Original Article // patch.com
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