Brooklyn Apartment Market is 'On Fire'

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Manhattan apartment rates continue to rise, pushing renters to Brooklyn and outlying boroughs, a new study found.

The average rental price for an apartment in Manhattan is now $3,190 a month, a relatively modest 4.7 percent increase from a year ago, according to report released today by Douglas Elliman Real Estate. In contrast, the median rent in Brooklyn jumped 7.2 percent from a year earlier, to $2,590.

"Brooklyn is hot, on fire," Douglas Elliman director of rental Mark Menendez told World Property Channel. "It's the result of a lot of buyers and renters pushed out of Manhattan."

The median rent for a luxury apartment in Brooklyn jumped 31.6 percent from a year ago to $5,165. Listing discounts in Brooklyn were slashed to 6.4 percent, compared to 11.8 percent last July, as landlords were hesitant to make deals. The average days on the market for an apartment in Brooklyn fell to 43 days, five days faster than a year ago.

Other outlying areas are also seeing new activity as renters look for alternatives to Manhattan.

"We're starting to see requests from other neighborhoods that we haven't seen in recent years," Mr. Menendez said.

The vacancy rate in Manhattan remained a light 1.69 percent, unchanged from a year ago, according to the new study. With sale prices soaring and rental prices high, renters in Manhattan are reluctant to abandon their apartments to search for something new.

"Tight credit is keeping many people from making the transition from rental to sales," said Jonathan Miller of Miller Samuel Real Estate Appraisers, which conducted the study.

When they do decide to move, Manhattan is no longer always the best option.

"It's this quest for affordability," Mr. Miller said. Rent increases in outlying areas is the result of "people chasing affordability."

Spring is usually the busiest time of year for the Manhattan rental market, but it is unclear how many apartments will open up Mr. Menendez said.

"I think everybody is in a holding pattern, waiting to see what happens," he said.