Crain’s published an interesting piece today trying to explain the supply crunch in Manhattan and exorbitant price of condos here. The article can be found here.
Although a bit simplistic, and in some cases reliant on statistics that are not useful, this is a decent piece because it highlights one of the most important reasons why it costs so much to own real estate in Manhattan – because there is just not a lot available for people to own. “Manhattan is a renter’s town. Seventy-five percent of the borough’s apartments are rentals—and nearly half of those units are rent-regulated and can’t become condos any time soon. Indeed, the days of landlords converting waves of rental units into co-ops or condos have long passed. More than 300,000 rental units went co-op in the 1980s, but just 71,000 did in the 2000s. In 2006 and 2007, during the housing boom, roughly 7,600 Manhattan apartments were converted. And in 2013 and 2014, only 4,000 were. It may well be that just about every eligible building has been converted.”
You can talk about land acquisition costs and the cost of construction in Manhattan, but the real reason why it’s so hard to find a condo or co-op to buy in this town is because three out of every four apartments out there are rentals, and the main reason why they are so unaffordable is because demand to purchase a tiny piece of this island significantly exceeds supply. I get it. I love it here and never want to leave. It makes sense for me to own. Does it make sense for you too? If so, give me a call. I’m happy to talk through with you the pros and cons of owning vs renting in New York City and, if you decide to take the plunge and buy an apartment, I’ll give you a rebate of up to 2% of your purchase price.