New listing at The Kent, 970 Kent Avenue, #509 (Compass)
Early in the pandemic, a combination of factors led to an uptick in first-time buyers. Key factors driving the trend included historically low-interest rates and a strong need and desire to secure larger and more permanent living quarters. For some renters, the temporary ability to tap into otherwise locked-up retirement funds for a down payment may have also helped (in 2020, many Americans became eligible to do early retirement withdrawals due to the CARES Act).
Although many renters were still looking to buy in 2021, over the year, low inventory combined with high demand pushed prices back up—well above pre-pandemic highs in most New York City neighborhoods and in the surrounding suburbs. As of spring 2022, low inventory and high prices are still making headlines nationwide but with a new challenge. Buyers are now also facing soaring interest rates.
In this article:
While the housing market is currently difficult, perhaps especially for first-time buyers, don’t assume renting is a better option. Whether it is best to rent or buy still depends on your short- and long-term plans and how much cash you can bring into any deal.
Buying in New York City in 2022
For a few months early in the pandemic, it seemed like buying might finally become affordable in New York City. Nowhere was this more apparent than in Manhattan. For a brief period in 2020, many Midtown properties were being purchased at discounts over $200,000 under the asking price. Two years later, a lot has changed. City Realty’s data suggests that the price per square foot paid for coops and condos has risen roughly 10% on average since low points in 2020, making bargains very tough to come by in nearly all New York City neighborhoods But this doesn’t necessarily mean it is better to rent.
In 2022, there are still at least two compelling reasons to buy versus rent. To begin, if you do have the cash to purchase a property outright or with a very low level of financing, buying is still a great option. Your property will likely hold its high value and accrue additional value over time. But even if you require 70-80% financing, buying could be more affordable in the long run. As always, follow the typical rule of thumb for New York City. If you plan to live in the city for more than a decade, buying is nearly always a better option than renting, even if your monthly costs are higher upfront (use this rent-or-buy calculator for an estimate). For everyone else, renting may be more strategic.
"If you plan to live in the city for more than a decade, buying is nearly always a better option than renting."
Renting in New York City in 2022
In March 2022, Mansion Global reported that Manhattan rental prices, which have long been notoriously high, hit a new record. As of March 2022, the average net effective median rental price was $3,644. Luxury rentals were over twice as high, leasing for $9,985 on average. But none of this is surprising. Between January 2021 and January 2022, the city saw rental prices rise by a staggering 33%.
The key factor driving up the rental prices in New York City between March 2021 and March 2022 is a surge in demand. Demand first rose in 2021 as postsecondary-level students returned to in-person learning. An early 2022 push to reopen offices has also led some workers back to New York City. However, there are also two other factors could be at play here. As already noted, high prices and high demand have created obstacles for first-time buyers, which likely means more people lingering on the rental side of the market than usual. In addition, pandemic-related supply chain problems have delayed the completion of many new residential developments, which may be slightly driving up demand for temporary rental housing. But even as demand and prices remain high, renting could be your best bet.
If you just plan to live in New York City for just a few years, renting is nearly always more strategic and affordable, especially if you are likely to end up buying a property worth more than $1 million. Given the high standard taxes slapped on all property sales and the mansion taxes applied on sales over $1 million, it rarely makes sense to buy a property if you plan to hold it for a short time.
"If you just plan to live in New York City for just a few years, renting is nearly always more strategic and affordable, especially if you are likely to end up buying a property worth more than $1 million."
Another reason to rent rather than buy applies to current homeowners who are looking to move. Given the 2022 market with its low inventory and record-breaking prices, if you sell, you'll likely make money on the sale. Figuring out where to go next, however, won't be easy since everything working in your favor as a seller will negatively impact you as a buyer. While it is too early to say how long it will take for inventory to rise and the market to settle down, selling while the market is high, investing your earnings (now at a more favorable interest rate), and renting until inventory bounces back and prices regulate could be one of the best financial moves you'll ever make.
A final and obvious reason to continue renting applies to anyone who may find owning to be too much of a financial stretch. Even if owning is a better investment, it is never wise to over-extend oneself. If this applies to you, stay put and continue to save. With so many uncertainties defining the current market, it is difficult to predict where it will go next. Also, if you’re looking for a place to rent for a few years while you keep saving to purchase a property down the line, there are options. Explore one of New York City’s more affordable rental neighborhoods such as Washington Heights in Manhattan, Richmond Hill in Queens, Mapleton in Brooklyn, or Riverdale in the Bronx.
New Listing Steals and Deals
From the Listing: Here's an opportunity you may not want to slip by; an underpriced studio in Downtown Brooklyn.
Unit 3B at 225 Adams Street is ready for your design ideas and contractor. At just under 500 square feet, this spacious, bright, and airy studio apartment faces east and has great morning light. There are three closets, new laminate floors, and a separate dressing area. The original bathroom is in great shape, and the kitchen is ready for your design ideas. See floor plan and full details here.
Unit 3B at 225 Adams Street is ready for your design ideas and contractor. At just under 500 square feet, this spacious, bright, and airy studio apartment faces east and has great morning light. There are three closets, new laminate floors, and a separate dressing area. The original bathroom is in great shape, and the kitchen is ready for your design ideas. See floor plan and full details here.
From the Listing: This is what you've been waiting for, the perfect starter apartment, priced to sell: a spacious, light-filled, pin-drop quiet, 1bdrm/1bth, with ample closets, throughout, and unlimited subletting after one year of occupancy. See floor plan and full details here.
From the Listing: Triple-mint renovations and partial NYC Skyline views! 4-74 48th Avenue 29E is truly one of a kind, completely gut renovated with modern condo-style finishes and beautiful real wood floors! Renovation highlights include: custom sliding track doors, European doors with metallic inlay, custom blinds, and luxury wallpaper. Prepare to be wowed from the moment you enter this very special home. T See floor plan and full details here.
From the Listing: Perfect for work-from-home, this large one bedroom apartment has a private balcony! 4T has a classic layout that can easily accommodate all of your belongings. A large living/dining room faces west and lets sunlight pour in. Your private balcony provides an outdoor oasis. See floor plan and full details here.
From the Listing: Welcome to Bennett 105 Condominium!
Gut renovated sundrenched two-bedroom one-bathroom CONDO with a plethora of closet space. This home has 2 large bedrooms with oak hardwood floors throughout and offers a gorgeous kitchen with stainless steel appliances, and granite countertops, including a dishwasher, microwave and glass-tiled backsplashes with an open kitchen/living room floor plan. Enjoy all day sunlight from large windows with both East and West exposures. See floor plan and full details here.
Gut renovated sundrenched two-bedroom one-bathroom CONDO with a plethora of closet space. This home has 2 large bedrooms with oak hardwood floors throughout and offers a gorgeous kitchen with stainless steel appliances, and granite countertops, including a dishwasher, microwave and glass-tiled backsplashes with an open kitchen/living room floor plan. Enjoy all day sunlight from large windows with both East and West exposures. See floor plan and full details here.
From the Listing: Residence 4B is a very generous loft-like space offering room to breathe and relax in your Brooklyn oasis with a deeded OUTDOOR rooftop space! See floor plan and full details here.
From the Listing: A beautifully renovated pre-war two-bedroom apartment with gorgeous views of Isham Park in Manhattan's Inwood neighborhood, with southern and eastern exposures bathing the unit in sunlight. Impressively and meticulously restored, the unit includes sought-after details such as arches, crown moldings, hardwood floors with inlay borders, built-in shelving and a sunken living room with wrought iron railings. The living room and the primary bedroom face south overlooking the park through new windows. See floor plan and full details here.
From the Listing: This Junior-4 is Meticulously Renovated & Move-In Ready! Perfect Home or Pied-a-Terre! Prime Sutton Place location steps from Midtown East! This welcoming home boasts open treetop views over East 55th Street, dedicated dining area that can become a second bedroom, decorative fireplace, through-wall A/C, new modern bathroom, new flooring, new custom closets including a walk-in, and new custom doors! See floor plan and full details here.
Would you like to tour any of these properties?
Just complete the info below.
Or call us at (212) 755-5544
From the Listing: 430 Kosciuszko Street is the newest boutique condominium in the vibrant and highly sought after neighborhood of Bed Stuy. Unit 2 is a graciously configured 915 ft 2 bedroom / 1 bath residence. This home is blessed with breathtaking Northern and Southern views that allow for an abundance of natural light throughout the day. Another impressive feature of the unit is the private outer vestibule with ample closet and storage space. See floor plan and full details here.
From the Listing: Yes, you can have it all - a stunning brand-new custom home with tons of space and super-low carrying costs; taxes and common charges under $315/month! This condo has a total of 1,135 sq. ft. spread over two floors. The main floor is an open-plan living/dining/kitchen, featuring 10' ceilings, with dark-stained engineered white oak flooring, and exposed brick. See floor plan and full details here.
From the Listing: This one of a kind penthouse in the sky high above Brooklyn is now available for purchase. Every detail from floor plan to finishes of this perfectly designed, sun-flooded home epitomizes the blend of form and function. The sprawling, loft-like Great Room features knockout open views from truly enormous East-facing windows and enough room to accommodate any number of uses. The true chef's kitchen comes fully equipped with Caeserstone countertops, premium stainless steel appliances, dishwasher and gas range. See floor plan and full details here.
From the Listing: An industrial chic, renovated two-bedroom, two-bathroom loft with palatial 12' poured concrete beamed ceilings in a full-service Clinton Hill condominium.
See floor plan and full details here.
From the Listing: A reputation for elegance. Best known as the modern-day Gem! Tudor City's most prestigious architecturally significant pre-war building. As you enter this exceptional 2 Bedroom/2 Bathroom unit, you are immediately welcomed by a long walk-in windowed kitchen, hardwood floors, high ceilings, spacious living area with oversized windows, drenched in natural sunlight from the south. See floor plan and full details here.
From the Listing: This sun-drenched Duplex Loft at the Magnolia Mansion Lofts offers 14 ft. high ceilings, south facing oversized windows, washer/dryer in unit, hardwood floors and over 1,400 square feet of functional living space. See floor plan and full details here.
From the Listing: Feeling cramped? Upgrade to a generous 2 bedroom, 2 full bathroom co-op with open city views East and West! Both bedrooms can easily accommodate a king size bed with room to spare. The flexible layout includes a large foyer that could be used as a dining area or turned into a home office. See floor plan and full details here.
From the Listing: How do you want to spend your summer? Boasting over 1,100 square feet of PRIVATE OUTDOOR SPACE and over 1500 square feet of indoor living, this expansive Clinton Hill duplex condo would be the perfect place to spend your summer! See floor plan and full details here.
From the Listing: They don't make them like they used to. Available for the first time in many years is this corner Chelsea prewar loft, ready for you to make it your own. Bring your architect to see and transform this expansive nearly 1,500SF, one-of-a-kind loft into your dream home. See floor plan and full details here.
From the Listing: Welcome to 675 Sackett Street - Unit 101. A nearly 1,300 SF 2-bedroom, 2 full bath expansive condo in prime North Park Slope, just half a block to all restaurants, bars, services etc on Fifth Avenue and one block to the Union St/4th Ave subway station. Conveniently located on the first residential floor of this elevator building, and one flight up from the entry level, this home is bathed in sunlight all day with south and north exposures through oversized noise reduction windows. See floor plan and full details here.
From the Listing: EXCEPTIONAL VALUE. A TURNKEY home that has been REPRICED. Just bring your toothbrush!
Nestled along a tree-lined street long noted for its picturesque beauty, this apartment is your new dream home. Currently laid out as a spacious two-bedroom, two-bathroom unit, it is easily converted into a comfortable three-bedroom, two-bathroom unit (see alternate floor plan). See floor plan and full details here.
Nestled along a tree-lined street long noted for its picturesque beauty, this apartment is your new dream home. Currently laid out as a spacious two-bedroom, two-bathroom unit, it is easily converted into a comfortable three-bedroom, two-bathroom unit (see alternate floor plan). See floor plan and full details here.
From the Listing: Amazing value in an amazing location. This split 2 bed 2 bath lies just off Broadway and 66th Street in the heart of Lincoln Center. See floor plan and full details here.
From the Listing: The minute you step up to this townhouse-style apartment with deeded parking you are greeted by charm, grace and beautiful landscaping. Upon entering through your private entrance you instantly notice the phenomenal light and air streaming through the loft-like living room and open kitchen. Gorgeous 8" wide white oak floors with 10' ceiling heights and natural light streaming through the casement windows. See floor plan and full details here.
From the Listing: Penthouse B6 is an expansive three-bedroom home with 2.5 baths, beautiful East River views, and outdoor space. Originally this home was four bedrooms and 3.5 baths, but quite cleverly, one bedroom was seamlessly incorporated into the kitchen creating a breakfast room. As you might expect, this penthouse has wrap-around views of the East River, its bridges and much of the city. The apartment is sunny and cheerful by day, and sparkles from the view at night.
See floor plan and full details here.
See floor plan and full details here.
From the Listing: A Rare Home: A sprawling, triple exposure, river front apartment with unobstructed views of the East River and your very own private, waterfront terrace.
This unique apartment spans over 2600SF with an additional 500 square footage of beautiful exterior. The flow of the unit is reminiscent of a rambling country home, with one room rolling into the next replete with magnificent water views. See floor plan and full details here.
This unique apartment spans over 2600SF with an additional 500 square footage of beautiful exterior. The flow of the unit is reminiscent of a rambling country home, with one room rolling into the next replete with magnificent water views. See floor plan and full details here.
Would you like to tour any of these properties?
Just complete the info below.
Or call us at (212) 755-5544
Would you like to tour any of these properties?
Contributing Writer
Cait Etherington
Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
