Earlier this week we reported how San Francisco’s rents grew by 13.5% this year.
The story in NYC is just as interesting. We ran an analysis on Manhattan and Brooklyn’s 1 bedroom median apartment rent prices to see how these two boroughs’ rental markets changed in 2014. Here’s what we found:
The gap between Manhattan and Brooklyn rents shrank dramatically. Whereas Manhattan experienced a 3.8% rise to an average 1 bedroom rent of $3,200/month, reflecting the ongoing economic recovery and Wall Street’s record highs of 2014, Brooklyn’s rental market grew much faster at 10.2% to an average of $2,570/month.
Three factors drove this. First, the escape from Manhattan’s rental market continued eastward. Although Brooklyn is getting more expensive in a hurry, its average 1 bedroom rents are still over $600/month less than those of Manhattan. Second, Brooklyn’s larger apartment spaces, coupled with its multicultural and artistic flavors, continued to attract millennials away from Manhattan. Finally, we have started to see a second wave of migration within Brooklyn itself. Brooklynites who had originally moved to neighborhoods like Williamsburg are now moving east again into places like Bushwick to escape the frenzy and find creative space again.
Manhattan itself was an interesting story. Within its more steady growth story was a large disparity across neighborhoods. Areas like the East Village (-2.6%) and Chinatown (-4.0%) saw falls in their average rents, as renters started migrating to areas like Long Island City (+20.0%), trading a slightly longer commute time for new apartment buildings and spectacular views, at below average prices.
On the flip side, trendier areas such as Soho (+16.7%), Tribeca (+12.6%) and Greenwich Village (+10.8%) saw a rapid increase in rent.
We’ll also continue to track how Manhattan compares to San Francisco in terms of their median rental prices. For the first time, San Francisco ($3,350) will end the year as a more expensive city to rent in than Manhattan ($3,200).
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