Summer 2022: To Rent or To Buy?
Jul 11, 2022 brooklyn,Brooklyn Buyers,brooklyn real estate,brooklyn realty,Brooklyn Renters,buying into brooklyn,carroll gardens,cobble hill,interest rates,new york real estate,realty collective,renting in brooklyn
As of July 2022, renters are having a rough go of it. Rents have been steadily increasing to meet higher demand & to combat increasing expenses for landlords (read: inflation); some even going so far as to offer gifts & crazy increased rents to secure their apartment. The whole rental process can be daunting, more so than ever.
So, this begs the question: in today’s market, is it worth it to rent, or is now the time to consider buying?
The Timeline
The biggest question to ask yourself is whether you see yourself in Brooklyn for the long-term. Are you simply looking for a Brooklyn apartment to fulfill an experience? Do you have plans to move for your career? Are you less-inclined to put down roots? If your answer is yes to any of these questions, then buying might not be the right investment for you.
On the contrary, if you have roots in Brooklyn, established a support system, or are simply not ready to give up the Brooklyn lifestyle, then buying is a real option. Even though mortgage rates are steadily on the rise, they are still at historic lows in the big picture. And if the thought of leaving Brooklyn makes your skin crawl, then now is the time to make moves to secure a home.
Bottom Line: If you’re looking to stay in Brooklyn for the next three-to-five years, then buying is the best option for you.
The Market
Buyers have been a little cautious lately after a steep increase in interest rates – spiking 52 percent over the past six-months. This can be good news for those who are still looking to buy, since the buying craze seems to have slowed. Even though we always advocate for getting your offer in early, the process is still less hectic when you don’t have to compete with a bunch of other buyers.
Something to consider, though, is the rising prices of new construction developments. With the price of materials still increasing, the price (and wait times) for new construction apartments might be more than you might be willing to pay.
The Finances
Considering your debt-to-income ratio after buying is also especially important. There are additional costs to think about besides your mortgage, like maintenance, common charges, and taxes. If these costs hinder your ability to save, then it might be better to wait a year or two before taking the plunge on your purchase.
All-in-all, your circumstances dictate what the right move is for you. Markets fluctuate, but it’s important to think about the big picture and consider what your financial scope is before, during, and after purchasing your new home. And if after crunching the numbers you decide that you’re not ready to buy, you can still take real steps today to get yourself to where you want to be in the next few years. (PRO TIP: Try this Rent vs Buy Matrix from the NYTimes)
If you’re not sure what those steps are, we host a monthly Buying Into Brooklyn workshop that details the entire process from top-to-bottom. Plus, we’ve got recommendations for financial planning & expectation-setting having worked in the industry for 20+ years. Don’t be afraid to get in touch so we can start the conversation!