Brooklyn Rents Are Finally Dropping: Report

BROOKLYN, NY — The fairest borough's notorious housing bubble may not exactly be bursting, as some feared/hoped it might, but a new market report from Douglas Elliman Real Estate shows it's at least contracting a little.

Median rental prices in Brooklyn dropped in July, according to the report. They're down around 1 percent since last summer — when they were at their all-time peak — and down around 2 percent since June of this year.

These new numbers mark the first downward turn in Brooklyn rents so far in 2016.

(The price of the "average" Brooklyn apartment shrank even further in July — more than 1 percent since the previous year, and around 3 percent since June. However, "median" rental prices are often the more useful to look at, because outliers with crazy-high or crazy-low prices can sometimes throw off the "average.")

So why the sudden slash in rents? Not that we're complaining...

According to the Douglas Elliman report, it may have to do with a corresponding surge in the number of new apartments hitting the market.

Nearly 30 percent (!) more housing units were on the market in July 2016 as in July 2015, the report showed.

To be precise, 2,424 rentals were still searching for tenants in Brooklyn last month — "the most units available for any month in records dating back to November 2008," according to Bloomberg Markets.

"An apartment-construction boom in Brooklyn is putting a cap on rents in the New York borough as a surge of new units erodes landlords’ pricing power," Bloomberg reported Thursday.

Jonathan Miller, author of the report, told Bloomberg that a disproportionate amount of Brooklyn's new housing inventory is on the higher end.

When the median Brooklyn rent came in at just under $3,000 in August 2015, Miller said, “That was a saturation point — an affordability threshold beyond which there was resistance. Many tenants began to make other plans.”

Lead image courtesy of Avalon Communities