It’s a well-known fact that in New York City, what many people spend on rent could easily pay a mortgage and then some in other parts of the country. But at what point does it make more sense to go ahead and purchase property rather than rent it? A new interactive map from Bloomberg seeks to explore the age-old question: “Should I rent or buy?”
Focusing on the two boroughs that are real estate hot spots—Manhattan and Brooklyn—the map analyzes prices to determine the tipping point of when it becomes more logical to either rent or buy. For example, in the East Village, the median sale price within the last three months of 2016 was $1.15 million, while rent prices averaged around $3,050/month. Buying an apartment versus renting would pay off in about four years.
However, in surrounding neighborhoods like Soho, Nolita, and Little Italy, it is wiser to rent, as the tipping point doesn’t make purchasing more affordable until after 31 years.
Similar to data from previous years, neighborhoods like West Harlem still have a relatively low tipping point of less than four years. However, where the tipping point was once 1.4 years on Roosevelt Island, it has now ballooned to 6.4 years before buying becomes more financially advantageous than renting.
The map uses data from StreetEasy and also takes a look at median asking rents, price changes on homes, the average amount of days that properties within a neighborhood stay on the market, and the average discount on sold properties from their original listing price to the amount it closed for.
It concludes that in Brooklyn, buyers typically have less negotiating power while in Manhattan, neighborhoods like Lenox Hill and the Upper West Side had a high percentage of their listings discounted.