If you’re moving to New York City, one of your primary questions is going to be whether you should rent or buy an apartment.
And if you currently live in the Big Apple, you could be wondering if 2020-2021 will finally be the time when you quit paying over fifty-percent of your paycheck towards rent and buy an apartment.
In this article, we will take a quick look at some of the major changes that took place in 2020, and discuss whether it’s better to rent or buy an apartment in New York City.
The Move Is On
For over a century, New York’s population has steadily increased with only a small dip in the early-mid 1980s.
However, in 2020 the tide started to change, if only on a temporary basis. Statistics show that in 2020 people are moving out of bigger and congested cities.
According to mymove.com, over 15.9 million people have moved during the coronavirus, according to USPS data. New York comprises a large portion of these figures.
In August the New York Post released an article that said:
“The exodus that began at the start of the coronavirus outbreak, with many New Yorkers departing to their beach and country homes, has continued unabated as more leave for good,”
“People are fleeing the city in droves,” reported the owner of a New York-based moving company.
Why are people moving?
There are three main reasons people are moving in 2020:
- 28% moved because of fear of getting COVID-19 if they stayed where they were living.
- 20% moved because they wanted to be with their family.
- 18% moved because of financial reasons, including job loss.
As you can imagine, this “mass exodus” has affected the New York real estate market.
An Overview of The 2020 New York Housing Market
It’s no secret that an apartment or any real estate in New York City is going to cost 5 if not 10 times as much as the national average.
But has 2020 halted real estate trends in New York, making it advantageous to buy instead of rent?
With so many people leaving New York real estate owners have started to take major hits on their income from tenants and have started to look at selling instead. CNBC News reported that “empty rental apartments in Manhattan tripled, nearly hitting 16,000”.
With the sale of homes in New York city declining already for the last several years, prices have now continued to drop through 2020, as you can see in the below chart. Forbes magazine also released a series of 13 graphs that prove the point.
Buying an apartment in New York City always comes down to one word:
Whether you plan to live in New York for the rest of your life or not, buying real estate in New York is always an investment.
Due to high-interest rates, and high prices, for years renting an apartment was not only the more affordable option but was also the wiser investment, unless you were paying for your apartment in cash.
However, 2020 has presented some of the best real estate and mortgage interest rates that we’ve seen in years which puts the option of buying an apartment in New York back on the table, making it a very palatable option.
So, Is It Better To Rent Or Buy an Apartment in New York City?
If we were to summarize the 2020 New York real estate market in a paragraph it would be:
Droves of people moving out of New York causes more apartments to go up for sale in a market that was already declining for the last few years.
And like everything that goes on in lower Manhattan, when supply is high and demand is low, what happens to price?
Add to that low-interest rates on mortgages and yes, 2020 could finally be the year you buy an apartment in New York!
“It is an excellent time to purchase a property in New York City. The market has been softening for several years now and inventory has grown. There are opportunities out there that may not exist in the near future. Interest rates are still low, and the New York market has historically always rebounded.” – Curbed NY