Choosing a home in a hot New York City real estate market can be daunting. With the market being so high, should you rent or buy?
We turned to licensed broker Daniel Nassi for some help. He said inventory is out there, so it “really comes down to whether you have the money or not.” Nassi said mortgage rates are comparatively low, which could make buying a better investment than renting. But if you need financing, you may be at a disadvantage. A number of cash buyers are in this market and they have a leg up.
“When you’re a seller and you have somebody who comes in, for instance, as a cash buyer you don’t have to worry if they’re going to be able to close,” Nassi said. “When you have somebody who has financing they don’t have as much leverage as someone who does not.”
As for rents, prices are high and aren’t moving. Douglas Elliman’s monthly report breaks down rents throughout the city. The median in northwest Queens is about $2,700, Brooklyn just over $2,800, and Manhattan gets an average of $3,175.
Nassi showed us a one-bedroom apartment in his building at 220 Park Avenue. 650 square feet will go for $3,500 to $3,600.
“If you rent, you might be spending more money than if you buy,” said Jennifer Gould Keil, the celebrity real estate columnist for the New York Post. She said whether you’re renting of buying the best deals are in Midtown West and the Upper East Side.
“The surprising thing is that areas like the Upper East Side, that were once so incredibly expensive, are now places where you can get the best deals in town,” she said. “And places that are up and coming in Brooklyn might be a little bit overpriced.”
Do your homework, get to know the neighborhood, and visit it at all times of day.
“We talk to some police officers who were saying they couldn’t believe that brokers will schedule open houses on a Monday morning in an up-and-coming neighborhood where things look wonderful, and buyers or potential buyers don’t know that there are shootings at 3 a.m. on Saturdays.”
New Yorkers we spoke with watch the market closely.
“Owning is always good, real estate always goes up so owning would be good for anybody,” Romain Singh said.
“When I bought my property it was many years ago, so it was so much cheaper, but now the prices has escalated that it’s impossible to buy,” Cleonie Sinclair said.
The real estate market does tend to slow down in the fall, especially around the holidays. You may have fewer options, but it could be a good time to negotiation.