Renters Seriously Considering Buying: Here's Why

As we’re in the throes of real estate's busiest season, there are likely some of you who have been considering buying given the persistently high rents in the city. In fact, Jonathan Miller, President and CEO of Miller Samuel, just reported an unexpected surge in Manhattan rents, reaching a new February peak. The rental market is experiencing robust growth, with the median rental price soaring to $4,230, marking a 3.3 percent annual increase.

While the current interest rates might dissuade some people from buying due to their perceived high levels, it's important to recognize that they are historically low. Bess Freedman, CEO of Brown, Harris Stevens, highlights that the perception of rates hovering around 2 or 3 percent was a one-off occurrence and doesn't foresee a return to those low rates in the near future. She suggests that expectations should be adjusted, recognizing that a 6 or 7 percent rate for a 30-year mortgage is likely to become the norm for the conceivable future.

Also worth noting, Manhattan reported a 7.6-month supply of apartments for sale in March, marking a 9 percent increase in inventory from a year ago. This surplus offers prospective buyers varying degrees of breathing space and reduced competition, depending on the neighborhood. Consequently, they might stand a better chance at negotiating a lower price, and potentially offsetting the impact of current interest rates.

For those considering transitioning from high-priced rentals to home ownership or newcomers seeking to establish roots in New York, I advise starting with thorough research, particularly if you don't have an agent. It's important to interview multiple real estate brokers and seek someone who: 1) listens attentively and provides valuable recommendations; 2) demonstrates expertise in NYC neighborhoods, understanding nuances between condos and co-ops, and so forth; and 3) is willing to accommodate your pace and preferences. I've heard numerous stories of agents pressuring clients into hastily purchasing the first property they encounter just to expedite closing the deal.

Several of you have found my "20 things to consider before buying" guide to be beneficial, particularly for first-time buyers. If you're seriously considering buying, this resource should serve as a valuable starting point. Additionally, ensure that the broker(s) and their firm can furnish you with the necessary tools and resources to make well-informed decisions. Whether you opt to work with me or another professional, I'm more than willing to address any inquiries you might have before embarking upon your purchasing journey.

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