Prices for rentals and homes for sale in Brooklyn have increased markedly over the last few years. Some neighborhoods have even managed to surpass Manhattan price levels.

Over the last few decades, Brooklyn has earned the reputation of being the “cool” New York City borough – home of the hipster movement, artisan manufacturing, and a burgeoning culinary scene. As a result of stepping out of the long shadow cast by its famous sister borough, Manhattan, Brooklyn real estate prices have risen in response to growing buyer and renter demand. To quantify the diminishing price gap between the two boroughs, StreetEasy compared median sale [1] and rent [2] prices in each of Brooklyn’s 49 neighborhoods to Manhattan’s median prices over the last five years.


The Fast Pace of Price Growth

Brooklyn sale prices are in high-growth mode. Twenty-eight of the borough’s 49 neighborhoods outpaced Manhattan’s 5-year growth rate in sales price. The neighborhoods with the greatest sale price increases (between 2010 and 2014) include a mix of stalwarts and surprises. DUMBO, by far the borough’s most expensive neighborhood with a median sale price of $1.5 million in 2014, saw prices increase 61 percent in four years. The Columbia Street Waterfront District, which boasts an industrial feel and waterfront views, saw prices increase by nearly as much. Considerable price growth was seen in the outer sections of the borough as well. Old Mill Basin, long a working class neighborhood in South Brooklyn, saw prices nearly double while Bergen Beach, a nearby middle-class neighborhood, saw prices increase by 73 percent.
Heightened demand for rentals in Brooklyn has caused a similar increase in rental prices, with 29 of the borough’s 49 neighborhoods outpacing Manhattan’s five-year rent growth. The neighborhoods with the greatest increases in rent, however, are not the usual suspects. Gowanus, Bushwick, Red Hook, and Bedford-Stuyvesant – all emerging neighborhoods with plenty of new restaurants, stores, and bars – saw rent prices increase the most since 2010.

Closing the Gap

Four Brooklyn neighborhoods topped Manhattan sale prices in 2014, including DUMBO, Columbia Street Waterfront District, Manhattan Beach, and Carroll Gardens. DUMBO stands in a class of its own with a median sale price of $1,507,500 – nearly 70 percent above Manhattan’s median sale price of $890,000. In fact, DUMBO’s median sale price was behind only six Manhattan neighborhoods (Soho, Tribeca, Nolita, Upper Carnegie Hill, Central Park South and Little Italy), making it one of the most expensive neighborhoods in New York City. Several other neighborhoods are nearly closing the gap – including many of Brooklyn’s brownstone communities. Park Slope is just $40,000 (-4.5 percent) below the Manhattan median, followed by neighboring Boerum Hill (-5.6 percent) and Cobble Hill (-6.2 percent). Most other neighborhoods remain well below Manhattan, with East New York posting the borough’s lowest median sale price ($242,916) – a full 72 percent below Manhattan’s.

Despite the fact that rent growth outpaced Manhattan in nearly all neighborhoods in Brooklyn, just two – DUMBO and Williamsburg – are more expensive. Several neighborhoods are closing in on Manhattan prices, however. Median rent in Cobble Hill is just 6 percent below Manhattan, and Downtown Brooklyn, Boerum Hill, and Brooklyn Heights are close behind.

[1] Median sale price derived from all sales transactions recorded by the New York City Department of Finance; includes condos, co-ops, townhouses, and single-family residences (SFRs) through July 2014. [2] Median rent price derived from asking rents for apartments listed on StreetEasy through August 2014.