Upper Manhattan Real Estate Prices Outpace Manhattan

Key facts - October 2015:

• Resale prices in the Upper Manhattan submarket increased 20.4 percent year-over-year, more than triple the Manhattan pace and the largest annual increase across Manhattan and Brooklyn.
• Resale prices in the East Brooklyn submarket increased 19.1 percent compared to last October, double the Brooklyn pace.
• New this month, the StreetEasy Rent Indices measure median rents across Manhattan and Brooklyn. In October, Manhattan median rents increased 5.6 percent year-over-year to $3,158. In comparison, Brooklyn median rents rose 3.2 percent year-over-year to $2,672.
• Rent growth in East Brooklyn was the highest across both boroughs in October, rising 7.9 percent year-over-year to $2,573.

Manhattan and Brooklyn resale prices continued their record-high setting streak in October. The Manhattan median resale price increased 6.4 percent from last year to $985,144, while the Brooklyn median resale price increased 10 percent to $548,290, according to the StreetEasy Price Indicesⁱ.

The submarkets of Upper Manhattan and East Brooklyn saw the fastest increase in prices. Sale prices in Upper Manhattan increased 20 percent, three times the rate of prices in Manhattan, while East Brooklyn saw prices grow twice as fast (19 percent) compared to the Brooklyn borough as a whole.

"Upper Manhattan and East Brooklyn are having a moment, and affordability is the primary driver," said StreetEasy data scientist Alan Lightfeldt. "With the median prices in Manhattan just shy of the $1 million mark, value has taken on even greater importance to New York homebuyers. They're taking their search to the neighborhoods that offer more options at a relative deal. As long as price growth continues unabated in the premier areas of Manhattan and Brooklyn, Upper Manhattan and East Brooklyn will attract even more buyers."

Rents in Upper Manhattan and East Brooklyn also outpaced rents in their respective boroughs, according to the new StreetEasy Rent Indicesⁱⁱ. Manhattan median rent rose 5.6 percent from last year to $3,158, while Upper Manhattan median rent increased 7.7 percent to $2,333. Rent growth in Brooklyn was slower by comparison, rising 3.2 percent from last year to a median of $2,672. Annual rent growth in East Brooklyn led both boroughs in October, rising 7.9 percent to $2,573.

Manhattan and Brooklyn sales markets remained just as competitive as last year due to inventory constraints. In Manhattan, homes that sold in October spent a median time of 45 days on the market, one day shorter than last year, and the median sale-to-list price ratio rose to 100 percent, meaning home sellers could expect to receive their full asking price in October. Among Manhattan's most competitive neighborhoods was Chelsea, where homes that sold in October typically spent 42 days on the market and sold for 1.5 percent above the seller's initial asking price.

In Brooklyn, homes that sold in October spent a median time of 42 days on the market, unchanged from last year. The median sale-to-list price ratio rose 0.7 percent from last year to 99 percent, meaning homes typically sold for 1 percent less than their initial asking price. Among the most competitive neighborhoods was Park Slope, where homes that sold in October spent a median of just 34 days on the market - the shortest time among all Manhattan and Brooklyn neighborhoods - and sold for 1 percent below the seller's initial asking price.

Looking ahead, resale prices in Manhattan are expected to increase by 0.6 percent to $991,486 over the next month, according to the StreetEasy Manhattan Price Forecast. In Brooklyn, prices are expected to increase 1.3 percent to $555,656 over the next month, according to the StreetEasy Brooklyn Price Forecastⁱⁱⁱ.

The complete StreetEasy Market Reports^iv with additional analysis and neighborhood data for Manhattan and Brooklyn can be viewed at streeteasy.com/blog/market-reports.