Keep Renting, Manhattan
I put together some data (click on the graph to see it in full size) on average rental and purchase prices for one-bedroom apartments in Manhattan. Long story short: don’t buy an apartment in Manhattan now, you’re better off renting. The monthly cost of a mortgage should be lower than (ideally half of!) your monthly rent, because the mortgage doesn’t include the maintenance fees, repair costs and property taxes that come with owning a New York apartment. Mortgages now are barely cheaper than renting (before counting those additional costs of ownership).
And having a mortgage payment that’s lower than rent isn’t just what should happen in a wonderful fairy tale world that isn’t NYC, it’s what has happened and will happen in our fair city. NB: the last time NYC real estate was overvalued relative to rents (1988), prices fell for seven years.
