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We already know many Manhattan rents are dropping. Brooklyn?s are too, in these areas. As we approach the six-month mark of the pandemic, the wealthiest neighborhoods in Manhattan are emptying out as young professionals ? some newly unemployed, others working remotely ? break their leases to move home or to second homes, triggering substantial drops in rents (and home prices). Brooklyn rents have proven much more resilient than rents in Manhattan and Queens. Median rents in July in Brooklyn as a whole were unchanged compared to a year ago, while median rents in Manhattan dropped 7.6 percent, and median rents in Queens ? home to a large population of the city?s lower-income residents ? dropped a whopping 14.2 percent. But there are hints that Brooklyn is starting to soften. Rents in the borough have started to trend downward across the board, with some neighborhoods ? like Sunset Park and Red Hook ? seeing July median rents drop by 20 percent or more year-over-year.
There?s also a glut of available rentals in Brooklyn. According to the appraisal firm Miller Samuel, listing inventory in July was up a whopping 84.2 percent year-over-year, while the number of new leases was down 24.2 percent. This clearly shows that demand is not keeping up with supply, a condition that causes prices or rents to drop in any type of market.
Many of the areas most affected in Brooklyn are those with a higher concentration of lower-income workers, who have suffere...