BY JACKSON CHEN | Those interested in buying a home in Chelsea should expect to hunker down for at least a decade for their real estate investment to pay off, according to StreetEasy’s forecasts.
According to a report released by StreetEasy on June 22, people looking to buy a home in Chelsea would have to spend more than 13.7 years in residence before being less than the costs of renting a comparable home. This year’s gauge, referred to as the “tipping point,” increased nearly four years from Chelsea’s 2016 tipping point of 9.83 years. The report added that Manhattan would take 7.7 years, compared to the city average of 5.6 years, before buying a home is a better investment than renting.
“Buying a home is an incredibly personal decision that should be rooted in research and examining what makes sense for your financial situation,” StreetEasy’s senior economist Grant Long said. “One key factor to consider is how long you plan to live in it. This timing can have a big impact on your ability to recoup the costs of buying a home.”
Long explained that for residents who are not willing to spend more than the city average of more than five years, renting was a more attractive financial choice.
For those still looking into Chelsea, both the home and rental inventory dropped compared to the same period in May of last year, according to another StreetEasy report.
The May 2017 numbers show there are 453 listed homes for sale in Chelsea, which is 12.4 percent less than May 2016, with a median asking price of $2,299,000 that is 3.3 percent higher than last year. But renters in Chelsea can comb through the 1,152 rentals available, which dropped 4.6 percent from last year, with median asking rent of $3,995 a month—a drop of 2.2 percent from last year’s rental prices.
The situation is similar in the neighboring Hell’s Kitchen (“Midtown West” is the preferred term on some real estate websites), where there are 379 homes for sale with a median asking price of $1,460,000 and 1,634 rentals on the market with a median asking rent of $3,495 a month. According to StreetEasy, Hell’s Kitchen was recently added to the study and there wasn’t enough data to compare it to previous years.
However, even renting may prove to be difficult, as residents would have to earn more than $26.69 an hour to live comfortably in the state, according to a report conducted by the National Low Income Housing Coalition. Their “Out Of Reach 2016” showed that New Yorkers would have to earn the $26.69 an hour to afford paying 30 percent of their income towards a two-bedroom place.
As affordability continues to drop in Manhattan, Long said that other communities in the Bronx and Queens are more appealing in expected value of buying a home.
