With the growing prices of homes and apartments in New York City, is it safe to say that it is now best to rent a home rather than buying one? According to various sources, renting or buying a home in the Big Apple would depend on how long a person wants to stay in the city.
According to New York Curbed, Street Easy evaluated the tipping point for 300 neighborhoods across the city, and they found out that 59 percent of these neighborhoods become financially advantageous to buy rather than to rent if a person plans to stay in the city for the next five years.
The tipping point is the number of years it would take for the cost of renting a place becomes equal to or exceeds the cost of buying it in a particular neighborhood. In Manhattan, the tipping point is about 7.4 years, and this may be because of high-end neighborhoods like Soho, Carnegie Hill, Little Italy and Nolita. However, in West Harlem, the tipping point is only 1.2 years, and this is among the lowest neighborhoods throughout the city. Roosevelt Island, on the other hand, takes only 1.4 years to favor the home buyer.
It was reported that the tipping point is affected by the home value appreciation or depreciation. It was revealed that the median resale value in the city rose 31 percent between 2005 and 2015. Business Insider reports that the median sales for New York City homes are around $1.2 million. With that, it would be smart to rent a home if the person is planning to stay in the city for only a year or two and not be a permanent resident in the area. It was also reported that a typical household would have to stay for at least 18 years for a homeowner to gain worth on the money.
