To the extent that Brooklyn rentals reflect wider real estate movement, there is good news and bad news for Brooklyn tenants. It all depends on how they view it (and how they chart their personal housing strategy). The bad news was not unexpected: for the third straight year, rents were up across the nation in 2012, according to apartment housing industry expert MPF Research.
Although rents rose at a slightly slower pace than in 2011, national forecasts are calling for rent increases in 2013 that match last year’s. The research firm said that apartment rents climbed 3.0% in 2012, down from 4.8% in 2011, but again were above the long-term norm of 2.5% registered over the past 20 years.
For tenants currently in Brooklyn rentals - both apartments and single-family homes - rents may be heading up, but the good news is that this price pressure has not yet resulted in a less friendly home buying environment. “Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact,” according to MPF’s report. In other words, rentals are not being lost in large number even though rents are rising, so floods of first-time homebuyers are not yet adding significant upward pressure on single-family home pricing.
Even with housing prices on the rebound, first-time homebuyers who decide to leave the world of Brooklyn rentals to buy a home now will still benefit from the record low interest rates and distressed property bargains that result in historically affordable home prices.
Another group that would hail rising Brooklyn rental rates are investors. "Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock," according to Greg Willett, MPF’s vice president.
Whether you are looking to buy or sell a rental home in Brooklyn, conditions warrant a thorough look at the opportunities available now and those opening this spring. Call me to get started on a plan of action!