Should I rent or buy an apartment in New York City?

So it’s been a most unusual spring in New York City. The timeline for renters has been turned on its ear. In the past starting a search for a “straight rental” 7 weeks early would have ended in frustration. I used to beg people to search 3.5 weeks before their move date, when they would have the most options and leverage.

Now any good apartment has applications within 48 hours of being listed. Even less sometimes. And on May 6 we are already seeing listings on StreetEasy for JULY!

As a listing agent I don’t think that is the most effective time, you want something to hit the market at at the time the most and best qualified renters are looking, but perhaps I will be singing a different tune soon. I just took an application for an off market listing for July 16.

Buying in Manhattan and inner Brooklyn and Queens is different in so many ways from the rest of the US. But with the rental market almost absurd, more relocation clients are starting to wonder, ‘Should I buy?”

While the rental market is out of control, the sales market still offers some deals. The rest of the US is in a sales frenzy, but a number of factors make Manhattan different.

The market was soft before the pandemic, the pandemic hit harder and longer here, and finally– the investment market here is different than the rest of the country, where investors will offer competitive cash for almost anything and do the deal in warp speed.

A few things to know.

If you are browsing I suggest using a NYC-centric search tool. Line City is good, StreetEasy is popular, you can also use almost any REBNY agency site. Try to avoid Zillow, which is the same data as StreetEasy but can be confusing.

The cheapest deals you see probably have a big asterisk. They are income-restricted, or occupied units with a tenant that is rent regulated, or cash-only.

Then you need to think about co-op versus condos.

If you are looking in the lowest price ranges most apartments will be co-ops not condos. To make this post efficient I linked an article that explains that. Many of the least expensive co-ops may have policies that make them less flexible as an investment property, which is another major difference with NYC. Condos are simpler to qualify for and to rent out, but they tend to be more expensive. Another key factor is the monthly building charges. Those have more to do with the co-ops finances than the size of the apartment or the amenities.

Even with all of that– there are appealing studios in the 300K range…check out this sweet sunny studio. Parents who are buying for an adult child or people wanting a second home in the city should discuss those plans with an agent.

So while buying still requires a down payment and a vision of your future, if you are moving to NYC it may actually be the more sensible and rewarding option.