Rent-stabilized tenants appear to be the newest addition to the ranks of new homebuyers. In New York City, nearly 70 percent of the population rents — about double the rate for the rest of the country. Most New Yorkers don’t take the decision to rent lightly. However, since home prices in New York have dropped as much as 30 percent since the height of the real estate boom, even people who are paying way under market rates for their rentals are venturing into the housing market.
The Times' lead-off anecdote is a retired school teacher who is trading a $725/month East Village studio for a $305,000 studio in a doorman building on the Upper West Side. Even though he and other buyers making the transition from stabilized renting to owning will end up paying more than they do now, most are certain it beats renting at market-rate.
Those who decide to leave rent-stabilized apartment know that they will probably wind up paying more, but they have some very compelling reasons for leaving the security of their rented abodes. Some have the desire to upgrade to a nicer building or a larger space while others give up size for the experience of owning. There are some who make the move because they know that their rents will soon head into market-rate territory anyway. Despite sharing other secondary motives, their main incentive is sales prices that have been heftily discounted and mortgage rates that are hovering enticingly low at around 5 percent.
Market experts say there is a chance that prices may drop slightly over the next quarter, however now is probably as good a time as ever to buy. Even if buyers aren’t getting a rock-bottom price, prices have come down substantially and buyers will get a good, reasonable deal at very low mortgage rates.
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