Even if Trulia is off by 40%...

Why 18?

I could be wrong. My building is half condo/half rental. and its about where I would care to buy my apartment if it was offered. 2BR - 60s betweenn Broadway and CPW.

OK, think hard about buying in a building that also has rentals.

It's seriously flawed. These people think you can rent a $1.4 million brand new condo for $4,000 a month? No. I think it would be more like $7,000. That's a buy/rent ratio of 20, still very high but more inline with Los Angeles.

"These people think you can rent a $1.4 million brand new condo for $4,000 a month?"

No, that is not in fact what the report says. You are pulling "brand new condo" out of your ass. However, they do simply take the average asking rent AS ADVERTISED for 2 beds versus the average asking sale price AS ADVERTISED, taking into account ALL COSTS, net of taxes. The fact is, maintenance and property taxes can be extremely high in Manhattan versus an identical bldg in Los Angeles or Chicago.

But the real flaw is that rental ads in NYC overstate apt size more often than for sale ads - as in almost every 2 bd is really a 1-bed in rental ads.

All that having been said, TOP said "even if its 40% off" NYC is still too expensive in terms of rent/buy, so in fact yes you could easily buy an $840k condo and have it be worse than a $4000/mo apt. Because the condo would be in Harlem, and the rental could be below 96th.

"OK, think hard about buying in a building that also has rentals."

So you wouldn't buy a condo falco?

@jason10006: it doesn't matter if it's new condo or a pre-war coop, you can not rent a $1.4M apartment for $4000 a month. Scale it down and if I could rent a $700k 1BR for $2,000 a month I'd be renting it right now! A $400k apartment in Queens would rent for about $2,000 a month = 20X buy/rent ratio.

All apartment listings lie about the square footage, I don't care if they are rental or condo or coop, they all lie equally.

The most serious flaw in the study is that most condo/coops that are for sale are way nicer than rentals.

The sad thing is that most people hear a place is 700sf and they assume it's correct because they have horrible judgement of spacial dimensions and they don't carry a tape measure with them to open houses. I once looked at a bedroom that was shown on the floorplan as 11'x15' and the agent insisted it was accurate as I insisted it was probably more like 8'x11'. I took out my tape measure and sure enough it was 8.5'x11'. It takes balls to lie about the size by that much.

I'm with calldn here. Since most co-ops allow only minimal subletting at best, it's hard to do a rent vs. buy calculation on that very large portion of the housing stock, and it distorts the NYC numbers.

ali r.
DG Neary Realty

juice,
for me, as a primary residence...most likely no.
I also would not buy in a building where the sponser has a large amount of apartments in the shadows that will end up becoming rentals(that's more what I ment). There are several buildings that answer to that exact description. This is where the rent/own ratio will be in your face...every day.
That's just me, I hate to make unwise money choices...others...not so much.

You are missing TOP's point. If its off by 40% - its still overpriced. So yes you can for SURE get a $800-900k condo equivalent to a $3500-$4000 rental. For sure.

The coop point is very interesting and not one that I had considered. You might analyze it in the oppisite manner. If the a large # of let's say Manhattan apartments can NEVER be part of the rental market then the number of available rentals will always be a smaller % than the total available apartments. This would cause rental demand to reverse the ratio.

Rentals Rentals
------------- vs. -----------
Total housing Total housing - coops

that didn't come out right.

Rentals/total housing vs. Rentals/total housing-coops

That's my point