In Some Parts of Brooklyn, Rents Actually Dropped in the Past Year: Report

Guys, not everything is terrible! While Brooklyn’s average rents kept ticking upward at their usual apocalyptic rate between August 2014 and August 2015, according to a new report from the rental agency MNS, four different neighborhoods within the borough actually enjoyed some small relief.

Bushwick saw the most dramatic drop in rental prices last year, the report says. An average unit in Bushwick now costs about $2,090 per month, down from $2,486 at this time last year — a nearly 16 percent drop.

The next most dramatic drop was about 12 percent in Crown Heights.

Also in the red are Park Slope, where rentals are now 9 percent cheaper than last year, and Greenpoint, where rentals are now 4 percent cheaper than last year.

(And although rent didn’t drop in DUMBO, Clinton Hill and Cobble Hill, they did stay almost exactly the same.)

That’s the good news. The bad news, according to MNS, is the reason it’s now so much cheaper to leave in the aforementioned neighborhoods: increased inventory.

Bushwick, Crown Heights and Park Slope “saw inventory levels increase from 2 to over 4 times the amount witnessed in August 2014,” says the report. “Such large increases in sample size can lead to price dilution, removing the sensitivity seen in lower sample sizes, while also illustrating growth as more renters flock to these areas.”

In other words, a ton of new development in 2014-15 made for a ton of new apartments on the market in these areas, lowering demand and watering down prices a bit.

However, the very forces that whittled prices down in these neighborhoods might be the same ones that drive prices back up in the near future — as new developments fill up but renter interest remains high.

We can already see that happening in Crown Heights.

Although rents dropped in Crown Heights over the past year, the past month has been a completely different story. The average unit was reportedly more than 10 percent more expensive in August than it was in July.

MSN blames Crown Heights’ recent spike in rents on three new luxury buildings: 500 Sterling Place, 954 Bergen Street and 744 Classon Avenue. And the reason these buildings were able to attract renters, MSN says, is because of neighborhood growth in the past year.

Have your doubts? To come to these bittersweet conclusions, MNS says it based its report on “a cross-section of data from available listings priced under $10,000, with ultraluxury property omitted to obtain a true monthly rental average.” The report’s full methodology (and conclusions) can be downloaded here.

HT DNAinfo