The apartment market in Brooklyn and Manhattan moved in the opposite directions in May, with rents dropping in Brooklyn and rising on the western banks of the East River, according to two reports released Wednesday.
Manhattan apartments rented for a median $3,200 in May, up 0.2% from the previous month and 3.5% from a year earlier, according to a report from Douglas Elliman Real Estate. The increase came as the vacancy rate dropped to 1.6%, down nearly a full percentage point from 2.5% a year earlier.
“This is the highest median rent since November 2008, with one month’s exception,” said Jonathan Miller, CEO of Miller Samuel Inc., who prepared the report.
He attributed much of the rise in rents to a combination of falling unemployment rates and strict credit conditions.
“We have seen employment growth in the city, which has caused the rental market to continue to be robust,” he said. “But the pump was initially primed with tight credit conditions tipping would-be buyers into the rental market.”
Meanwhile, a report from Citi Habitats pegged the average Manhattan apartment rent at $3,438 in May, just $13 below its all-time peak. The report showed that SoHo/TriBeCa was Manhattan’s most expensive neighborhood by far, with a median monthly rent of $5,373. It also boasted the lowest vacancy rate, at 0.72%. In contrast, the most affordable area in Manhattan was Washington Heights. There, median apartment rent was $1,625 in May.
Over in Brooklyn, the picture was decidedly different. Rents in that borough fell for the second straight month after peaking in March. The median rent for north and northwest Brooklyn was $2,579 in May, down 4.5% from April, and down 3% from a year earlier, according to the Miller Samuel report.
“Brooklyn rents tend to be more volatile relative to Manhattan, which has to do with the housing stock,” Mr. Miller said.