The sizzle is coming out of Manhattan and Brooklyn’s rental markets as more renters opt to become buyers.
Rents in January cooled in both boroughs, according to two real estate reports out yesterday.
The average price of a Manhattan rental apartment was $3,211, $23 less than in December, marking the fifth consecutive month of declines, according to a report from Citi Habitats.
A report from Douglas Elliman showed median rents in the borough rising by just 2.6% to $3,150, following a healthy 12-month stretch of 7.5% average annual increases.
The story was pretty much the same in Brooklyn, where the median rent was flat at $2,527.
“It looks like we are running out of gas, in terms of growth,” Jonathan Miller, CEO of appraisal firm Miller Samuel, which compiles the reports for Douglas Elliman, told the Daily News. “The march upward wasn’t sustainable.”
Rents in both boroughs are still sky high. But they are beginning to show pressure as renters like Laura Krattli decide it’s time to buy.
Krattli, a 29-year-old who works in financial services, got fed up last summer after her Manhattan landlord jacked up the rent on her Tribeca studio from $2,400 to $2,800.
“This is ridiculous,” Krattli told the News.
Krattli thought she would find lower rents in Brooklyn.
But she was surprised to see an owner at luxury Williamsburg condo The Edge renting out a one-bedroom apartment for $3,500.
With the help of Citi Habitats senior vice president Eugene Litvak, Krattli ended up purchasing a $795,000, 1,100 square foot duplex in the building, which has a 25-year tax abatement and low common charges.
“People realize interest rates are incredibly low,” Citi Habitats president Gary Malin told the News. “In many cases the buying analysis makes sense right now. People want to get on the train.”
While rents have eased, they could start to rise soon. Prices tend to go down in the winter and climb in the spring and summer.
And inventory remains tight. The vacancy rate in January was 1.37%, even with December, but up from January of last year when it was 1.3%.
“Inventory is so low, when people come to market, there is nothing out there,” Litvak said.
Some neighborhoods continue to command celeb-worthy prices.
One-bedrooms in SoHo/Tribeca, where the vacancy rate was a supertight .76% in January, went for a whopping $4,229, according to Citi Habitats.
But far less expensive apartments were available in the East Village where the average rent for a one-bedroom was $2,606 and the vacancy rate was 1.69%.