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Renting in Manhattan Sucks, But the Bay Area Is Worse

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For months, San Francisco has topped New York City as the city with the most expensive rents, but a new report from Forbes says that it's not just SF, but the entire Bay Area. In a list of the top 10 worst markets for renters, San Francisco, Oakland, and San Jose took the top three spots, while Manhattan came in fourth. That's right, while rents in Manhattan are still rising, it is still not the crappiest place for renters.

To make this list, Forbes looked at the 50 largest U.S. Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions (MDs), which the the U.S. Office of Management and Budget defines as cities and their surrounding suburbs. But in areas like New York where there are large sub-markets that vary drastically, they broke things down even more. Thus, Manhattan was pulled out as its own market, since rents and incomes on the island are a lot different than the rest of the five boroughs. Northern New Jersey, which includes Bergen, Essex, Hudson, Morris, Passaic, and Union counties, was made into another sub-section—and came in as the seventh worst market for renters.

Here are the stats for Manhattan and Northern NJ:

The data comes from Marcus & Millichap, and Forbes looked at four things:

1) average rent during the last quarter of 2014; 2) vacancy rates, since more empty units means greater choice and, typically, better prices; 3) average share of household income spent on rent; and 4) the year-over-year change in rents. They "tipped the scales a bit more heavily" toward the exact cost of rent, since this is the number one factor for renters on a month to month basis. In Manhattan, the most outrageous stat is that rent takes up a whopping 53 percent of the average household income. The vacancy rate is also very low, so there's a lot of competition. Forbes also points out that even though renting is expensive, it's cheaper than buying, which, if you were considering it, you should have done during the recession because it was only $217 more expensive in 2012. It's now $4,627/month more expensive to buy. In Jersey, the situation is a little better. Rents average $1,898 and take up "only" 31 percent of the household income.
· San Francisco Tops Forbes' 2015 List Of Worst Cities For Renters [Forbes]
· New York City Is Still Cheaper For Renters Than San Francisco [Curbed]
· Trends That Suck: Rents Keep Rising in Manhattan and Queens [Curbed]