BY MICHAEL STAHL
When does it make the most sense to buy in New York as opposed to renting?
That’s a question StreetEasy posed to its data scientists, who analyzed 2015 sales price and rent rate statistics for more than 300 neighborhoods across the five boroughs. They contrived a “tipping point” for each neighborhood, representing the number of years it would take for the accumulated costs of renting a home to either equal or exceed the costs of buying a comparably sized home in the same area. Then, the site’s team computed median figures for each borough and the city as a whole. In a press release last month, StreetEasy revealed that residents in Queens can rent for less time—three years—before making a financially responsible call to buy when compared to people in any other borough. The median tipping point for all of New York City is 4.9 years.
“Relatively low sales prices combined with the fact that the typical Queens buyer puts down a 26.7 percent down payment, means the rent vs. buy decision tips in the favor of buying in a much shorter time period than other boroughs,” Alan Lightfeldt, one of the site’s data scientists wrote in an email to the Tribune. “In an area like Manhattan, the cost of homes is prohibitively high in many neighborhoods, contributing to a higher tipping point.”
The tipping point for all of Manhattan is 7.4 years, but the number in neighborhoods such as Carnegie Hill, Little Italy, NoLita, SoHo and TriBeCa reached beyond 31 years.
Some of the city’s sections with the lowest tipping points are set in Queens, including Alley Park (1.1 years), Howard Beach (1.4 years) and Briarwood (1.5 years).
Lightfeldt also wrote that there is less variation in tipping points between Queens neighborhoods because prices around the borough are relatively similar. “Resale prices in Manhattan and Brooklyn vary widely by comparison,” he added. “The median resale price exceeds $1 million in only one neighborhood–Douglaston,” which, correspondingly, is the Queens neighborhood with the highest tipping point, 6.5 years. Long Island City (6.1 years) and Fresh Meadows (5.8 years) round out Queens’ top three.
Though Manhattan has the longest borough-wide tipping point, two of its neighborhoods–West Harlem and Roosevelt Island–have some of the shortest tipping points in New York City, at 1.2 and 1.4 years, respectively. Queens’ border borough, Brooklyn, is home to residential enclaves with some exorbitantly high tipping points as well. Boerum Hill (16.4 years), Carroll Gardens (15.8 years) and Dumbo (13.4 years) represent Brooklyn’s top three, while Old Mill Basin (1.7 years), Starrett City (1.9 years) and East New York (2.1 years) fill out the borough’s bottom.
“It’s often said that it takes eight years to become a true New Yorker,” Lightfeldt wrote in the press release, “but it takes considerably less time for homeownership to make sense here–going against what many New Yorkers have been trained to believe.”
For a complete list of tipping points by neighborhood, visit streeteasy.com/blog/tipping-point-buy-versus-rent