Thursday, July 12, 2012

Manhattan Rent Prices Going Insane

Checkout this report from NyPo, where you get to pay insane rent, while the mayor tells you what you can eat and drink:
Manhattan rents are soaring to their highest levels in two years, and it’s the smaller apartments that are in demand — and seeing the biggest hikes.

The average rent in Manhattan is $3,778, up 9 percent in a year, a new report by the Prudential Douglas Elliman real-estate firm found.

But it’s worse if you’re looking for a studio. Average studio rents leaped to $2,569 in the second quarter of the year, a whopping 18.8 percent jump compared with the same period in 2011, the report found. 
Also, rents rose for apartments all over Manhattan, with the biggest hikes, of 13.5 percent, on both the West Side and uptown.

“There are two primary reasons for the increases,” said Jonathan Miller, who prepared the report. 
“First,” he said, “there is the tightness of credit on the purchase side.”

Apartment dwellers who want to buy rather than rent — and who’d love to take advantage of falling mortgage rates — find they don’t qualify, he said.

The second factor driving up rents is the city’s economic rebound. That means people with new jobs are looking around — and looking first at smaller apartments, he said.
I'm generally not a fan of home ownership. You are most often better off renting. But in the current environment of very low mortgage rates and an ultimate return to accelerating price inflation, if you can get a long-term FIXED rate loan for 10 years or more, it makes sense to buy, if you plan on staying in an area long term.


  1. *Where the mayor tells poor people what they can eat and drink.

  2. If you paid me that amount of money each month I wouldn't live in Manhattan.

  3. You wrote that "I'm generally not a fan of home ownership. You are most often better off renting."

    Excellent topic. Please elaborate using spreadsheets to demonstrate your conclusions with a range of interest rates, loan period lengths, and rental fees.

    1. Are you going to pay him for his time?

    2. You can do your own spreadsheet based on the town you live in, and based on the mortgage rate you qualify for (are you a friend of Angelo? haha).

      However, two points you should factor in are the interest deduction on taxes, which politicians are threatening to take away; and property taxes, which are definitely going up.

      For me, in the town I live in, the difference between renting vs. buying is several hundred dollars a month, plus all the time and money that I'm not spending on maintenance and landscaping, etc.

      On the negative side, I am not building equity. On the positive side, renting gives you short-term flexibility.