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Three Cents Worth: Manhattan Rent v. Buy v. Location v. Size

[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller enters the market's gray zone.]

Since we are in some sort of rent versus buy gray zone right now, I thought I'd create a "gray" matrix showing the market share differences in location and apartment size based on the buy and rental market in Manhattan. This is not a rent versus buy analysis but rather a comparison between two distinctly different markets.

Sorry this chart has a bit too much information for one sitting, but I thought it would be helpful to show how different the rental and purchase (sale) markets really are.

I think the general perception remains that the sale and rental markets are interchangeable and one market assumes a portion of the other's market when credit and rates change?an inverse relationship. In addition, there have been significant changes to former long-term patterns since Lehman.

Here are a few basic observations (I'll keep it light on comments to offset the overkill I created with the charts).

Location: Rent v. Buy

· Downtown is the largest rental market (obviously determined by the way I draw the boundaries) and shows stability in share for both rent and buy.
· Uptown is gaining share in both rent and buy (hey, it's an emerging market)
· East Side rental share is sliding but buy market is stable.
· West Side rental; share is rising and buy market is ever so slightly edging higher in share.

Size: Rent v. Buy

· Studios?rental market share has been edging up slightly since Lehman. Buy share is down from peak but seeing highest share since '09.
· 1-Bedrooms dominate the rental market?share up over past year. Buy share has been generally stable until the last few quarters (hint: mortgage rate drop)
· 2-Bedrooms?rental share sliding since Lehman while buy share remains most volatile of all despite large size. Buy share dropped sharply in recent quarters.
· 3-Bedrooms?rental share bumped up post-Lehman but has since remained stable. Buy share increased sharply since credit crunch began to highest levels in years.
· 4+ Bedrooms?rental share up post-Lehman and remaining fairly stable. Buy side followed same pattern but saw more of a bump than rentals did post-credit crunch.

· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]