StreetEasy Predicts Queens Will See Demand Surge in 2016; Brooklyn Will Remain the Most Unaffordable Rental Market in New York City

NEW YORK, Dec. 15, 2015 /PRNewswire/ -- While housing costs will remain high in New York City, StreetEasy predicts that buyers and renters will see slower price growth in 2016. The median sales price is expected to grow by 2.2 percent in 2016, down from 5.7 percent in 2015. The city's median rent price is forecast to increase 3.2 percent to $3,055, down from 4.2 percent in 2015.

Though rents will grow at a slower pace next year, forecasts show that rent increase will continue to outpace the city's income growth, presenting a year of even greater burden for renters across all boroughs. StreetEasy's New York City housing predictions also identify the top 10 hottest neighborhoods for the coming year. These are neighborhoods predicted to become increasingly appealing as record-high prices and growing competition price renters and buyers out of parts of Manhattan and Brooklyn.

2016 Predictions

1. Sales and rent prices across all boroughs will grow at a slower pace compared to 2015ⁱ.
2. Upper Manhattan will be the most competitive area of the city for buyers, with sales prices expected to increase four times faster than city-wide sales pricesⁱⁱ.
3. Manhattan's luxury market will cool amid weaker demand.
4. Brooklyn will remain the most unaffordable borough for rentersⁱⁱⁱ.  
5. Queens will see a surge of new demand in 2016, with Jamaica topping the list of hottest NYC neighborhoods.

Commentary from Alan Lightfeldt, StreetEasy Data Scientist

Sales and rent prices across all boroughs will grow at a slower pace compared to 2015 
"Growth in home prices will sputter next year as buyers grapple with record-high prices set in 2015 and rising mortgage rates. Although prices will climb in 2016, the market has clearly slowed down from the feverish rate of growth we saw during the housing boom. Critically low vacancy among the city's rental units and strong demand will put upward pressure on rent prices next year as well." 

Upper Manhattan will be the most competitive area of the city for buyers
"Upper Manhattan's moment has arrived. Homebuyers seeking value in Manhattan are increasingly starting their search above 110^th Street in neighborhoods like Central Harlem, Hudson Heights, and Inwood. Swelling competition and limited supply in these neighborhoods will cause prices to surge in 2016."

Manhattan's luxury market will cool
"Manhattan's luxury market saw dramatic growth throughout 2014 as developers rushed to meet exploding global and investor demand for premium real estate. That demand appears to have been fully satiated this year and prices began to fall in February. We expect Manhattan's priciest real estate to see further price declines next year as the supply of luxury units exceeds waning demand."

Brooklyn will be the most unaffordable borough for renters
"Renting in New York City will be even less affordable for households as rent eats up a larger share of income. The typical household will need to set aside nearly two-thirds of its total annual income to pay the city's median asking rent in 2016, a significant increase from this year. Once again, residents of Brooklyn are expected to bear the greatest burden as rent there will account for two-thirds of a household's income. Lack of affordable options means many New Yorkers will choose to double or even triple up in smaller units, further compounding the city's overcrowding problem in 2016."

Jamaica Tops List of New York City's Hottest Neighborhoods in 2016
StreetEasy's annual list of the city's hottest neighborhoods is a reflection of where New York apartment shoppers are expected to turn their attention in the coming year. To predict 2016's hottest New York City neighborhoods, StreetEasy created the StreetEasy Hot Market Index which takes into account four key performance indicators: Annual change in sales price, annual change in rent price, recent population growth, and annual change in StreetEasy page views per listing^iv.

StreetEasy predicts 2016's hottest neighborhoods will be:

"Jamaica's rise comes from a number of favorable factors, including a healthy growth in population, strong growth in interest among buyers and renters, comparatively low prices, and convenient access to the New York City subway and Long Island Railroad systems.

What is true in Jamaica is also true in greater Queens. Strong competition in Manhattan and the Prospect Park submarket of Brooklyn will push more buyers to Queens, but there is a pull factor as well. Relatively lower prices, easy access to large job centers in Midtown Manhattan and Long Island City and more living space for their will pull more New York buyers and renters towards Queens in 2016."

Additional predictions analysis can be viewed at http://streeteasy.com/blog/streeteasy-2016-nyc-housing-predictions/ 

About StreetEasy:
StreetEasy is New York City's leading local real estate marketplace on mobile and the Web, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages throughout New York City and the major NYC metropolitan area. StreetEasy adds layers of proprietary data and useful search tools to help home shoppers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City, as well as Northern New Jersey and the Hamptons.

Launched in 2006, StreetEasy is based in Manhattan's Flatiron neighborhood. StreetEasy is owned and operated by Zillow Group Z.

StreetEasy is a registered trademark of Zillow, Inc.

(ZFIN)

ⁱ Median resale price is forecast using the StreetEasy Price Forecast, a 12-month projection of resale prices derived from the StreetEasy Price Index. Median rent is forecast using the StreetEasy Rent Forecast, a 12-month projection of rent prices derived from the StreetEasy Rent Index. The StreetEasy Rent Indices are calculated for Manhattan, Brooklyn, Queens, and the Bronx. Rent data for Staten Island is insufficient and is therefore not included in this analysis.

ⁱⁱ The StreetEasy Price Forecast was used to predict sales price growth in each of Brooklyn and Manhattan's submarkets. StreetEasy's Upper Manhattan submarket encompasses the following neighborhoods: Central Harlem, East Harlem, West Harlem, Hamilton Heights, Inwood, Manhattanville, Marble Hill, and Washington Heights.

ⁱⁱⁱ Affordability is determined using rent-to-income ratios for 2016, which are calculated by forecasting median rent and median income among renter households in New York City. A 12-month forecast of median household income for New York City and each borough is derived from the latest available U.S. Census income data and Employment Cost Index (ECI). Income data at the census tract level is fitted to StreetEasy neighborhoods using a crosswalk methodology.

^iv The StreetEasy Hot Markets Index takes into account four key performance indicators: Annual change in sales price, annual change in rent price, recent population growth, and annual change in StreetEasy page views per listing. Population growth is derived from 2011 and 2014 Census ACS data.

 

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SOURCE StreetEasy