Renting vs. Buying (Post-COVID Edition)

It’s been debated many times before, but now that the New York City real estate market has seemingly turned a corner with a resurgence of buyers back into the real estate marketplace, it brings up the classic debate: What’s better, renting or buying?

The historical data indeed shows a clear trend of real estate appreciation over time, despite occasional downturns, such as the financial crisis of 2007/2008. During another flashpoint, the COVID crisis, the overall market chopped roughly 10% from prices and is still clawing its way back despite sky-high transaction rates during the initial stages of the pandemic. And the current strong buyer push hasn’t really moved the needle for pricing. That said, the correlation between inflation and real estate appreciation is often evident, as real estate tends to be a hedge against inflation due to its tangible nature and value as an asset.

It's understandable that some buyers may hesitate or attempt to time the market, especially in environments with tight inventory like today's landscape. But despite tight inventory, the long-term play to purchase real estate always seems to pay off if you treat real estate like long-term stocks. And waiting rarely pays off. Real estate has consistently appreciated over time, and trying to "get a deal" by waiting for prices to drop significantly can often result in missed opportunities.
Today is that day when prices are still diminished and recovering from COVID, and interest rates have finally dipped into more “normal” and affordable numbers. In short, it’s a great time to buy New York City real estate. Particularly when compared to the cost of a spring rental market, when fair market rates will probably jump anywhere from 5 to 20%. If you can lock in your purchase in the next four to six weeks, you’ll be a very happy seller in five to seven years :-).

In active markets, like today, with tight inventory, it's crucial for buyers to engage effective real estate professionals who understand the business and can help navigate conditions that are changing almost daily. Taking advantage of a market that's at the bottom of its basin is always a good thing, and today is that day!