Is Brooklyn Still a Bargain?

From Woody Allen to “Sex and the City,” film and television have glamorized living in Manhattan. And for years, if you could afford it, Manhattan was the only place in the city to live. In a 2004 “Sex and the City” episode, one of the main characters decides to move to Brooklyn with her family for more space. This choice is portrayed as a great sacrifice. As she recalls all of her horrible Manhattan apartments, she wonders, half-jokingly:

 

“Why do I think living in Manhattan is so fantastic?”

“Because it is,” says her friend.

 

But the notion that Brooklyn living is only for bargain hunters is gone. Although Manhattan rents overall are still more expensive, in the last few years more areas of Brooklyn have began to catch up. Expensive Brooklyn areas, such as DUMBO and Williamsburg, are now comparable to rents in several Manhattan neighborhoods. And more people are choosing Brooklyn for its lifestyle than its rents.

“You see people going there because they want to actually live there,” says Andrew Barrocas, CEO of the real estate company MNS, “and they are willing to pay a premium in order to do it.”

 

Related: Why Brooklyn Foreclosure Numbers Could Get Worse

 

In January, the average Manhattan rental prices for studios, one bedrooms and two bedrooms in doorman and non-doorman buildings exceeded those in Brooklyn. But the priciest Brooklyn areas were comparable to, and even more expensive than some Manhattan neighborhoods, according to MNS’s January 2012 Market Reports, the only research on the city’s rental rates published on a monthly basis.

For example, the average one bedroom rental price in DUMBO was $3,584. The average one bedroom on the Upper East Side was $ 3,466 for doorman buildings and $2,562 for non-doorman. (More Brooklyn and Manhattan rental comparisons)

 

Williamsburg, Brooklyn Heights, Carroll Gardens, Cobble Hill and Boerum Hill are also neighborhoods that have comparable price points to Manhattan, says Samantha Behringer, a Prudential Douglas Elliman Associate Broker who handles sales and rentals in Manhattan and Brooklyn. In Williamsburg average rentals prices were $2,398 for studios, $2,960 for one bedrooms and $3,776 for two bedrooms, according to the MNS report.

Williamsburg, Brooklyn Heights and DUMBO have been comparable with Manhattan for the last three to four years. And in the last two years Boerum Hill, Carroll Gardens and Cobble Hill have accelerated in price, she says. In Boerum Hill one bedrooms went from $2,170 in January 2011 to $2,750 a year later, an increase of about 27 percent.

In Manhattan neighborhoods, such as Harlem, certain areas of the Financial District, Northern Manhattan and Midtown West, a renter can find a comparable or even cheaper apartment. Of those places, Harlem is probably the best known for affordable apartments, and was by far the lowest priced area in the MNS January report. Doorman building rents were $1,433 for studios, $2,023 for one bedrooms and $ 3,300 for two bedrooms. In non-doorman buildings studios were $1,398, one bedrooms were $1,793 and two bedrooms were $2,218.

But the far Upper East Side, typically east of Third Avenue, is another neighborhood that is a great choice for renters, says Behringer. Though it’s not as economical as Harlem, it’s one of the lowest priced areas in Manhattan. Many students live there, so there’s plenty of inventory and a large turnover, which slows down the market somewhat.

If you’re living in a more expensive Manhattan neighborhood like Chelsea, says Behringer, “a great option is to go a little further up and a little bit further east. That tends to be the trend.”

 

But Behringer likes Brooklyn. She has lived in Fort Greene since 1997. “People thought I was a little bit out of my mind,” she says. It was a rough neighborhood when she first moved there, but she knew from working in real estate that the area had potential and would see future growth because it was so close to the city.

She was right. And in the last three years Fort Greene has become very expensive, says Behringer. “You can’t find a one bedroom here for under $2,000,” she says. “That’s not a bargain to me.”

Brooklyn’s best selling point is no longer affordable rents.

As pioneers like Behringer came over to Brooklyn, businesses followed, expanding the shopping and entertainment options. Today this growth continues, and is characterized more by independent business rather than chain stores.

People come for the residential feel that Brooklyn’s always had, and is lacking in most of Manhattan, but now there are more amenities. Behringer never hears people say they want to move back to Manhattan, and many want to stay in Brooklyn long term.

When Barrocas started in the real estate business 12 years ago, he used to encounter people that weren’t familiar with Brooklyn and didn’t know how close it was to jobs and life in Manhattan, but its proximity no longer seems to be an issue.

Convenience to Manhattan is an important factor in rental prices. But Williamsburg and Downtown Brooklyn have also benefited from the development of high-rise luxury buildings. These areas have fewer height restrictions, and there’s been a lot of development to meet demand, particularly in Williamsburg.

“It’s certainly, if not the fastest, one of the fastest growing neighborhoods that I’ve ever been involved with in the last 10 years,” says Barrocas.

In Williamsburg, the rental inventory consists of many condominiums that were bought as rental investments, says Behringer. And owners can charge a premium for them.

Rent only buildings are also being developed. The development company Avalon Bay already has a high-rise luxury building in Fort Greene, and is opening one on Willoughby Avenue in Downtown Brooklyn that will have about 800 units, says Behringer. People are willing to pay a lot for these amenity-packed Brooklyn buildings, and are quickly filling up the units.

Renters priced out of Williamsburg are now going to more affordable neighborhoods such as Bushwick, Bed-Stuy and Crown Heights, says Barrocas. 

For now Prospect Heights and Clinton Hill remain on the cusp of the more popular neighborhoods, says Behringer. But those places won’t stay on the edge for long, she says, and others, such as Bed-Stuy, could see a real turnaround in a couple years.

What You Can Get for $2,000 in Brooklyn and Manhattan

Brooklyn’s priciest neighborhoods are now on par with some of Manhattan’s neighborhood deals. All monthly rents are from January 2012. (Source: MNS Real Estate)