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To buy or not to buy? The changing relationship between Manhattan rents and home prices

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Abstract

Much of the nation has experienced steep declines in housing prices in recent years. In Manhattan, however, apartment sales prices did not fall as sharply. A study of price-rent ratios in the New York City borough concludes that, while apartment rents are driven by supply and demand forces, apartment sales prices are driven in part by speculative factors, and they sometimes rise or fall to levels incommensurate with prevailing rents. Manhattan price-rent ratios, although off their 2008 highs, are still up dramatically over the past two decades, suggesting less financial ?value? today in an apartment purchase there.

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  • Jason Bram, 2012. "To buy or not to buy? The changing relationship between Manhattan rents and home prices," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 18(Dec).
    • Handle: RePEc:fip:fednci:y:2012:i:dec:n:v.18no.9
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    References listed on IDEAS

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    1. Karl E. Case & Robert J. Shiller, 2003. "Is There a Bubble in the Housing Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 299-362.
    2. Andrew F. Haughwout & Donghoon Lee & Joseph Tracy & Wilbert Van der Klaauw, 2011. "Real estate investors, the leverage cycle, and the housing market crisis," Staff Reports 514, Federal Reserve Bank of New York.
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    Cited by:

    1. Philip Arestis Author-Email: pa267@cam.ac.uk & Ana Rosa Gonzalez-Martinez, 2017. "Housing Market in Israel: Is there a Bubble?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 64(1), pages 1-16, December.
    2. Coskun Yener & Jadevicius Arvydas, 2017. "Is there a Housing Bubble in Turkey?," Real Estate Management and Valuation, Sciendo, vol. 25(1), pages 48-73, March.

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