Felix Salmon on Rent versus Buy: US Buy, Manhattan Rent, Justin Bieber
Posted by Jonathan J. Miller -Thursday, May 10, 2012, 10:50 AM
1 Comment
A few days ago, a post by Felix Salmon at Reuters caught my eye: Chart of the day: Let’s go buy a house! Yesterday he asked me to send similar data for NYC and would run the same chart. I sent over 20 years worth of median sales price and median rental price (face) data for Manhattan and he punched one out: Rent vs buy, Manhattan edition laying the results on top of the US data.
He’s running a payment equivalent adjusting for inflation and he says:
Obviously the Manhattan data series, with fewer transactions, are much noisier than the national series. But broadly speaking, it costs you the same amount to buy a house today, in terms of your monthly mortgage payment, as it did at the end of 2004, when the median sales price was just over $600,000.
Here’s what I told him when admiring his chart handiwork:
We are def moving into a gray area where we are now seeing more and more Manhattan individual apts as cheaper to buy than rent in our appraisal practice – especially coops since they are cheaper than condos. Obviously the problem remains whether the buyer is credit worthy.
Since this analysis is in aggregate, there is not a “tipping” point where the line is crossed and everyone runs out and just starts buying apts (i.e. Justin Bieber tickets).
- Chart of the day: Let’s go buy a house! [Felix Salmon/Reuters]
- Rent vs buy, Manhattan edition [Felix Salmon/Reuters]
The Tampa Florida real estate market has turned in the last two months. Oddly enough, it feels like a sellers market inside of a buyers market. There is not enough inventory for all the buyers right now… Some “would be” buyers are now having to rent and purchase in the future. The rental market is very strong here as well.