My girlfriend is discovering that finding an affordable one-bedroom apartment in the outer boroughs of New York City on a teacher’s salary—even though teachers in New York are paid more than anywhere else in the country—is next to impossible.
A real estate brokerage, Marcus & Millichap, must have been following her around during her latest search, as they just put out a report declaring New York City (not just Manhattan) the most expensive rental market in the country.
The research group also predicts rents in New York will rise more than 6% this year, which will likely exceed inflation, due to the housing market (purchases) slowing down.
Northern New Jersey isn’t far down the list, but according to this chart is much more affordable. I’d like to see the New York City figure broken down by borough. I expect Queens and Staten Island will look more like Northern New Jersey, while Brooklyn is higher, and Manhattan’s prices are high enough to skew the average significantly. I don’t know much about the Bronx.
The article also describes the least expensive rental markets. Tucson, Arizona tops the list with an average 2006 rent of only $615 a month.
Are the low prices motivation enough to move out to the southwest or mid-west?
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9:37 am (reply)
All the young NYC people I know don’t live alone, they all find a roommate to share the rent…
10:50 am (reply)
I think this figure is somewhat skewed by some truly astronomical rents—you can still find housing, especially in outer boroughs, that’s manageable on an entry-level or not-for-profit salary. That’s not to say “cheap”—I pay $600 splitting a two-bedroom with two other people. Tell your girlfriend to look in Sunnyside, Flushing, Bushwick, etc.
11:27 am (reply)
On the other side, there are rent-controlled apartment outside of the “free market” rental economy, skewing the average down, but I would guess they don’t have as much pull as the astronomical rents in Manhattan.
12:06 pm (reply)
This study needs to include what constitutes an “average apartment” so that a true cost-of-living comparison is meaningful. No doubt NYC would still top the list.
I’m in the beginning stages of planning a move to the tri-state area, but giving up my 2000 sqft condo in Houston where I only pay $750 (P&I) is definitely the most painful part.
2:02 pm (reply)
Rent control has a pretty minimal influence at this point in the game. Because rent control is vacated when the tenant moves out (or dies without passing the rent control privilege on to a family member), there just aren’t that many rent-controlled apartments left. What we do have is rent stabilization, which limits the amount by which rent can increase on a yearly basis. But then again, my apartment is rent-stabilized, and $1,795 for a two-bedroom isn’t unreasonable in a trend-skewing sense.
4:55 pm (reply)
Hmm, I was thinking that renting in San Francisco (#2) is cheap. I always like to brag about that back home to my friends from Boston (#3) on the list. The thing is that rent in Boston and San Francisco seem to be somewhat similar (SF is a little more, but not a huge amount), but buying is much, much more expensive for what you get in San Francisco.
To me “expensive rent” is the relation of purchase price to rental price – a low ratio in this case. Cheap rent would be a high ratio.
7:11 pm (reply)
Does this analyisis take pay into account? I live in San Jose, but I used to live in San Diego. My husband and I pay a little more to rent a place up here, but our incomes are WAY higher, so it’s all relative.
Also, if you think you want to stay in the same town for a long time, you need to know the cost of rent vs. the cost of buying. Even though San Jose is considered “expensive” to rent, it’s actually really cheap to rent when compared to buying. So cheap, in fact, that it makes no sense at all to buy (especially since house prices are coming down).
I don’t know what the situation is in all those other towns, but I would say that San Jose is a very FAVORABLE place to rent.
9:26 pm (reply)
I think Virginia’s comment was probably what I was trying to get at. As a percentage of income, my rent is cheap in San Francisco area.
11:09 pm (reply)
An “average” one bedroom in my area (midtown) is at least $3000. Studios are $2000+, and 2 bedrooms are $4000+.
11:56 pm (reply)
I’m relieved to see that DC area isn’t on the list, but I am sad that some of my family lives in Oakland and will probably never be able to make the switch to owning, without some IPO action headed their way.
2:14 pm (reply)
Coastal prices seem to be insane no matter where you live. Here on the coast we pay almost double what we paid in a Georgia college town.
Manhattan, though, is simply insane.
2:25 pm (reply)
The rent would make more sense if they give it in terms of “per-square-feet” basis, or at least in terms of average one bedroom, average two bedroom, etc.
I am not moving anywhere because right now I am paying much less than average rent in Tuscon, Arizona. That’s one of the few good things in unversity towns. :)
3:03 pm (reply)
I agree with Virginia’s comment.
Another thing to consider is quality of life. There is a reason that it’s expensive to live in these towns. You pay for what you get. Unfortunately, we sometimes have to make tough decisions (roommates, less eating out, etc.) to enjoy the great city we’ve chosen to live in.
4:00 pm (reply)
SF is rent doable. It takes some looking but I rent in a casual neighborhood 1 bedroom, with a garage spot for 2/3 of the above average. Commute is super easy.
It’s not fancy but I’m loving it. I think that as a single renter I’m right at the limit of what’s reasonable. I know people who earn 6 digit salaries and live in studios, others have roommates into their 30’s. If you don’t own you cannot afford to throw money on rent!
11:35 am (reply)
would like this to have the comparison with average mortgage for a similiar dwelling.
2:50 pm (reply)
I live in the heart of manhattan, and stumbled into a rent-stabilized apartment 6 years ago when I moved into manhattan. I still pay 1800/month for 360 sq feet in a prime area (the village). I’ve had a roommate almost the whole time I lived here (the rent started at 1525 back in 2002). I like to tie this into the “can you be poor on a 6 figure salary”. Obviously if you make 100K+ you can afford a 2K rent, but throw in most amenties high income earners expect to have (a car, vacations, eating out nicely) and it dwindles pretty fast! I have come to the conclusion that short of a major pay increase I’m likely never moving out of the apartment into another manhattan apartment – maybe into brooklyn…but I’ll likely never do better in manhattan.