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Mark Chin

The Insider: Parallels to the Great Recession or is it Deja Vu All Over Again?

By | The Insider | One Comment

As readers of the Insider know, I am a voracious reader of the news. Recently a series of news items struck me as a pattern, and I decided to dig into the similarities between the setup to the Great Recession and now. I think you may find this as unsettling as I did.

The similarities I found myself by digging a bit into recent news articles (included for your reference below).


Subprime Mortgage Crisis, Its Timeline and Effect


June 2004-June 2006

Fed Raised Interest Rates



March 2022-Sep 2022

Fed Raised Interest Rates


Raising interest rates puts brakes on the economy and so often precedes economic slowdowns and turmoil.

August 25-27, 2005

IMF Economist Warns the World’s Central Bankers


July 2022

The I.M.F. warns that a global recession could soon be at hand


The IMF has a global perspective and gives a balanced and fair view of the global economic situation. Their economics bench is deep and when they issue warnings of this sort, it pays to heed them.

December 22, 2005

Yield Curve Inverts


August 2022

Yield Curve Reaches Most Inverted Level This Century


A normal yield curve is one in which short term rates are lower than long term rates. When the yield curve “inverts” (which it does only rarely), it means that the financial markets are thinking short term risks are high compared to long term risks. This often precedes a recession.

September 25 2006

Home Prices Fall for the First Time in 11 Years


October 2022

US home prices drop at fastest pace since 2009


Considering the vast amount of wealth stored in real estate, when prices drop across the nation, there is widespread pain.  Caveat this time: most homeowners have a lot of equity in their homes, which wasn’t true heading into the Great Recession.

November 2006

New Home Permits Fall 28%


August 2022

Single family starts drop 10%


New home permits dropping and single family starts dropping both signal distress in the housing market.


The Fed Doesn’t reduce rates enough to calm markets


September 2022

Fed hikes interest rates by a sharp 0.75 points despite recession fears


In the last cycle, the Federal Reserve (as became clear in hindsight) wasn’t aggressive enough in dropping interest rates. This unnerved the markets and the following volatility proved to be destabilizing. This time it’s a little different, but similarities exist. Now, the Federal Reserve is continuing aggressive interest rate hikes in the face of signs of an impending recession.

September 10, 2008

2008 Lehman Brothers credit default swap costs soar as markets bet against the bank


October 2022

Credit Suisse Credit Default Swaps hit record high as shares tumble


Don’t worry too much about the technical details of what a Credit Default Swap (CDS) is. Just think of it as a kind of insurance for (in this case) bond holders. It ensures that if you held Lehman Brothers bonds and those bonds were defaulted on then you would still get your principal and interest.  If the cost of the CDSs are soaring, it means that people were betting against the viability of Lehman as a going concern. Of course, Lehman went on to be a spectacular bankruptcy. Currently there are two banks that are under extreme pressure, as measured by the cost of their CDSs. One is Credit Suisse and the other is Deutsche Bank. The parallels to the Lehman situation are eerie.

September 2008

Stock Market Crash


YTD 2022

Worst YTD S&P 500 performance in 20 years (and that includes 2008!)


The stock market crashed in ‘08, but the stock market has been even worse so far this year. Yup.

September 16th 2008

Lehman Brothers bankruptcy; beginning of Great Recession





In 2008 the tipping point was Lehman’s bankruptcy.  Will it be Credit Suisse or Deutche Bank this time?

The timeline from the lead up to the great recession comes largely from this article from The Balance:

Let’s be clear about my message here. I am most definitely saying that there are uncanny parallels between the Great Recession and this period we’re heading into. I am NOT saying this is going to be the same case. Why? Because this time around lending standards are still tight, and there’s an enormous amount of equity in people’s homes. Last time around credit standards were loose and many people tipped into negative equity territory as soon as the market shifted.

Also, the world saw what happened when Lehman was allowed to fail the way it did last time. I do not believe that European regulators have the stomach for that particular flavor of turmoil with the war in Ukraine on their doorstep – not to mention the dire fuel shortages they will be facing this winter looking to be a certainty. In my view they will step in to bail out either or both banks if necessary.

Why does all of this matter to real estate in New York?

The first point is for buyers, and pertains to a clause in the contract called the funding contingency. If you are buying with a mortgage, it would be a very good idea to request a funding contingency in this parlous financial environment. The funding contingency allows the buyer to get their deposit back in the case that the loan commitment letter is issued, but the bank subsequently does not fund the loan. Typically sellers see this as highly unlikely and will allow buyers to have this clause without too much trouble. Here’s why it matters. When Lehman Brothers went down in 2008, the following day there was not one mortgage closed in the US. And no mortgages were written for quite some time. That’s because banks were circling the wagons around their balance sheets and fighting to survive. So rather than lending money they were keeping it to service their current liabilities.

If you were a buyer and the bank issued a loan commitment letter then Lehman failed, you were stuck. Without a funding contingency or a renegotiation of the contract, buyers could (and did) lose their contract deposits because they couldn’t afford to close on the property.

For sellers, we have no idea if there is going to be a Lehman event heading our way. What we can clearly see is that the risk is higher that it will happen. So if you think you want to sell, my advice is this: sell now, and sell quickly. Else be prepared to rent your property or stay in it until the next cycle upswing.

Have a great weekend, everyone!

The Insider: Using Market Cycles to Your Advantage

By | The Insider | No Comments


If you have been tangling with real estate and the stock market as long as I have (since late ‘80s professionally), then market cycles start to look remarkably similar. Yes, they each have their specific flavors, such as distinct periodicity or amplitude, but the broad strokes are always the same.  That is because human psychology and market dynamics do not change.

With that in mind, in today’s Insider, I want to delve into how the sales cycle works in real estate and elucidate  how to use this understanding to your advantage, either as a buyer or seller.

Here is the model of a sales cycle.  I have overlaid the 2008 housing crisis and the Covid pandemic timelines on it so you can see what I mean when I say the structure of these things is always the same.


So let’s walk through this.

The end of the bull market. Every seller wants to sell at at the top. But actually before the top is the best place to sell.  Why? Because there is still a volume of buyers in the market and bids are still competitive.

This is the top of the market but by the time you think you are at 2, it’s too late to sell. Why? Because very little volume trades there. Buyers stampede out of the market faster than you think. So supply starts to pile up. Sellers who wait too long have missed their opportunity to sell in a seller’s market.

This is the most interesting part of the market for buyers, and the hardest for them to understand. Why do I say this?  Well in our market, it is very common for buyers to pay all cash. In a competitive bidding situation, financed purchasers get boxed out by cash buyers. So they bid and bid and don’t get any accepted offers much less signed contracts. However! As the market is dropping as it is in sector 3 of the sales cycle, buyers can take their time. Sellers are more likely to accept financing contingencies. Chance of being in a bidding war is dramatically lower. So financed buyers actually can buy things here, unlike in sector 1.

Buyers think that they only want to buy at the bottom, but the bottom is a chimera. Why? Because it lasts a nanosecond and very very few trades actually happen there. By the time buyer’s realize the market has shifted there are already bidding wars on everything of quality in the market. Buyers have missed their opportunity to buy in a buyer’s market. Financed buyers find they are once again being boxed out by cash buyers.

Let’s look at actual data in the following chart:

This is a compound chart, where the top half is supply and the bottom half is contract activity. In the bottom half, the yellow line is the historical average, while the blue line is actual data for that time period. These data span from 4th quarter 2019 to present.

You will notice at the bottom of the market (4), contract activity drops to a local nadir.  That’s what I mean by thinking that you’re going to buy at the bottom is a chimera. Almost nobody actually pulls that off. The historical average for this time period is 1,000 units, whereas in july of 2020 it was between 100 and 200 units.

From there (1) both contract activity and supply swell, but contract activity is greater than new supply so over supply starts to drop.

You can see in (2) strong contract activity. As this stage gets long in the tooth, total supply starts to swell.

Finally, in (3), contract activity drops below historical averages and supply starts aggressively accumulating. We won’t know until ex post facto whether this data picture is actually the sign of a market bottom, but given interest rates, a shaky S&P 500, inflation data and talks of an impending recession, it wouldn’t be surprising if it were.

Here are the takeaways, which are the same as last week:

If you are a seller, do it now, do it quickly, and price aggressively.

If you are a buyer, even though it seems like it’s early, now is the time to act. Waiting for the bottom will in all likelihood mean you miss your opportunity.

Have a great weekend, everyone!


Watch the live recap of today’s Insider with Mark Chin and Josh Rubin here:

The Insider: Data Dive Into Manhattan Real Estate Trends. “What should I do?” answered.

By | The Insider | No Comments


This week I was reminded of the old Wall Street rule of thumb called “Three steps and a stumble”, which means that the stock market tends to decline if the Fed Funds rate moves upwards three consecutive times. It has relevance to the real estate market also, obviously. Having been through three massive 75 basis point increases in the Fed Funds rate (and the fifth consecutive increase in a row), there seems to be some decision paralysis in the market. The Insider is here to help you with a decision framework.

Let’s look at local market data and see what’s what.

Let’s start with new development supply, something the Insider mentioned in passing recently. Current units on the market = 862.

Source: Urbandigs

As you can see, the supply story is super clear here. It increased in a very strong trend from late 2012 to 2017. Since 2020, it has been doing the opposite. Notably the trend is still super clear. Supply is dropping and since the cycle from concept to sales in new dev is about a half-decade, it’s likely to persist in its current trend for a while. During this period expect developers to hew to their asking prices and be stingy with concessions (such as paying the transfer tax).

In the much broader resale market (current units = 6,337), the trend is far from clear.

Source: Urbandigs

As you can see from the chart above, there was a very clear data trend from 2014 until 2020. That was upended with the pandemic, and since then the “trend” has been clear as mud.  You can see in the data the chaos that the pandemic has made of, well, nearly everything.

What we can tell from the chart is that in spite of the fear in the market at the moment (I’m speaking anecdotally), the market is in fine shape, at current supply levels of the 2017-2019 period, and nowhere near the highs of 2020 or the 2009-2010 period (not on the chart but much higher).


In real estate, supply is a direct calculation and is simply the number of apartments on the market. Demand can only be measured indirectly, and the best that we have is contract activity. We don’t really know the number of people actively looking at real estate for purchase, and there’s no way to find out that number. But we can see how many buyers actually did buy something because every signed contract meant a buyer did something. Let’s take a look:

Source: Urbandigs

To begin with, notice that the data clearly shows the fall and spring seasonality of our market. It also shows how much more powerful the spring market is than the fall market. But both exhibit distinct waves of buying activity. If you were wondering if there are more buyers in spring or fall, you need to never wonder again.

More importantly, for the topic of today’s discussion, two things of note:

  1. Demand (as measured by signed contracts) is still higher than it was from summer of 2018 to fall of 2020
  2. Although the trend is currently falling, expect an upward bump anyway shortly due to the seasonal fall market effect.

A Combined Picture

Source: Urbandigs

This chart shows the ratio of in contract properties to listed properties. Higher numbers indicate a seller’s market, and the opposite is true for a buyer’s market. Intuitively this makes sense. If there are 100 apartments listed and 100 in contract sellers are in the driver’s seat (market pulse = 1.0). If there are 100 apartments on the market and only one in contract, buyers are in control (market pulse = 0.01).

The Market Pulse chart combines supply and demand into one view, and gives a better sense of what’s happening overall.

Here are our takeaways from this chart:

  1. We are currently in a balanced or neutral situation, after having spent the last two years in a seller’s market.
  2. The trend is definitely towards buyer’s market territory, but we’re not there yet.

—Washington Post


Here are the two relevant charts graphics. The first one shows where the housing markets are cooling (purple) and where they are stable (green). The second one zooms in on the greater NYC Metro Area.

Our region (including Manhattan) is exhibiting strong stability compared to other areas in the country. This does not mean that the zones in green are appreciating markets! Just that they are not dropping.

Just Tell Me What To Do

The hyper-local data points to a cooling market here in Manhattan but the effect is not particularly dramatic. Supply is similar to where it was in 2028-2019 which when we were living through it felt fine.

Demand is cooling from very high levels, but is still higher than most of 2018-2020.

With the third 75 basis point increase in the Fed Funds rate, there will be a cooling effect, which cannot be denied.

If You Are A Seller, Consider This

This graphic shows what happens to sellers that don’t adjust to market realities fast enough in a falling market. In the case above, seller’s initial price is just above the market price. Time goes on and the market drops. Seller finally does a price adjustment. Unfortunately this price drop does not take into consideration the reality of where the market is. So the apartment sits on the market. They finally do another price adjustment, but make the same mistake. It’s only on the third price drop that they get serious and drop the price enough to meet the actual market price. At this point they finally sell. As you can see they lose quite lot of money by not recognizing the market realities early.

If this looks overly theoretical, believe me: I’ve seen this exact scenario play out hundreds of times first hand. So if you believe the market is going to go through a prolonged decline the message is: sell now and price aggressively. Being passive and waiting will only hurt you.

If You Are A Buyer, Consider This

We are in a balanced market for the first time in two years. It would be tempting to just sit and wait but here are the conditions under which you should buy now:

  • You have a compelling life reason to do so
  • You can afford it
  • You find a well priced apartment or motivated seller
  • You plan to own your apartment for more than 5 years
  • You stick to your guns on negotiating
  • You are financing (as rates look like they’re going higher before they go lower)

Timing the top or bottom of the market is almost impossible. Finding a wide window of time and conditions in which a transaction makes sense is much easier. Just make sure it makes sense and you’ll almost certainly be doing the right thing.

I hope this helps you think through your current situation. As always if you want more perspective or help with a transaction, contact us.

Have a great weekend everyone!


Watch the live recap of today’s Insider with Mark Chin and Josh Rubin here:

The Insider: Kill the Chicken to Scare the Monkey. It’s Happening…

By | The Insider | One Comment

Goldman Sachs lifts all COVID protocols, orders staff to return to office full-time

—NY Post

Goldman Sachs to kick off Wall Street layoff season with hundreds of job cuts this month

—CNBC Financial

Let me ask you a question: who exactly do you think is going to be fired first? Exactly.

Goldman Sachs is about to embark on a project referred to by my Chinese friends as “kill the chicken to scare the monkey”, which means setting a strong example to get everyone else in line. Executives at the bank are well aware that entitled young bankers prefer working from home (WFH) doing sort of half-days while being paid full time wages and bonuses. Now they are going to take advantage of temporary market weakness to cull their ranks of WFM dissenters. And let’s not forget all the newly-minted MBAs chomping at the bit to work in the office. Believe me, this strategy will work just fine. After all (and I quote from the NY Post),

“In the ’80s, we had a saying on Wall Street: They can’t take your desk away from you if you’re sitting at it. Junior bankers would be wise to remember that,” the source adds.

Source: Kastle

Same message, different view:

Fine, so Wall Street will inexorably force its front line workers back to the office. Why does the Insider care? Because this trend is the current bellwether for New York City real estate.

  • JP Morgan, Goldman and Citibank are major owners of NYC office space. The more that space is full, the more those assets are worth. So they are going to fill them. Period.
  • The big banks set the tone in NY. Once their offices are full and the standard is set, the rest of the city will follow (where in-office work is necessary)
  • As the pandemic ends and high interest rates threaten a recession, the power to force workers back into the office is back in management’s hands. Perfect timing (after a few false starts).

Full offices mean demand for apartments. And for retail space. And for office space. This is the trifecta.

Have a great weekend, everyone!


The Insider: It’s All About The Asset Class

By | The Insider | No Comments

As I read the news in the last week, I was struck by how precarious things are globally across many (many) assets. Japanese Yen, Euro, and Sterling getting slaughtered against the dollar. Europe, Japan, and UK all being forced to raise rates as their economies are slowing. China’s property market looking decidedly sick. Like intestinal flu sick. China’s stock market in a rout. Emerging markets are swooning in the face of a monstrously strong dollar.

Let’s consider some asset classes and their outlook:

Let’s remember that real estate is the mother-of-all assets, which some people either forget or don’t realize. In 2022, the total market capitalization of the US residential housing market was $43.4 trillion, according to Zillow. This does not include commercial or government owned real estate. The total market cap of the Nasdaq and NYSE combined was $44.1 trillion.

Here is my point. Sometimes we get myopic about real estate, and we only think about the two bedroom in Chelsea (or whatever) that we ourselves are interested in. However, real estate is a fundamental piece of the global asset pie. And New York City is the cherry on that pie. In 2018, Bloomberg estimated that just the land of Manhattan, without any of the buildings on it, and excluding parks, roads and highways was worth $1.74 trillion, more than the GDP of Canada.

With the dollar soaring, it’s true that real estate here looks expensive to foreigners. But what other decent choices do they have? Would you really want to invest in European real estate at the moment? Or European stocks for that matter? Wouldn’t it make sense to have some money out of the liquid but volatile and highly correlated equity markets? With interest rates rising globally, real estate is the asset class of choice.

My sense is that as we accelerate out of the pandemic, NYC real estate will become even more apparent as both a store of value and a great place to live and work. Expect it to outperform other asset classes and global cities in both the short and long term.

Have a great weekend, everyone!



The Insider: Let’s talk about kitchens. Yes, I am opinionated.

By | The Insider | No Comments

There are few rooms that affect the price of a home than a kitchen. Today we’re going to look at how to renovate a kitchen to enjoy it and also get the most resale value.

I remember years ago, I was at an architect friend of mine’s and was admiring his kitchen which was (as befitting his training) minimal and beautiful. I asked about the cabinets and was totally stunned to learn they were Ikea. But… he had custom-made pulls on the cabinetry that looked amazing and the “Ikeaness” was totally dispelled. Over the years I have been in many multi-million homes that had Ikea cabinetry. Here are some pictures of Ikea cabinets that have custom fronts to give you an idea of what you can do:

Credit: Superfront

Credit: Superfront

Here’s the thing about Ikea kitchens: the industrial designers did a great job and the shapes have withstood the test of time. The hinges and slides are excellent. But the fronts and the pulls make them look cheap. So the very best kitchen hack of all time (favored by architects) is installing an Ikea kitchen, then swap out the pulls (at minimum) and the fronts if you want to go the next step. The result is a super high-end looking kitchen at a 30-40% savings on the cabinets, which can be ridiculously expensive if you are having it all done in custom millwork.

Here are some more tips to maximize your taste/price ratio:

Avoid glass backsplashes:

NEVER, EVER do an accent stripe in tile. It screams “Home Depot Contractor Special”

NO to that rustic stone tile look. This is not Santa Fe.

If you have the money, slab stone is best:

But if you need to save money on the backsplash, classic subway tile is a great option (and timeless). Colored grout is a nice touch.

Credit: Jenna Burger Design

When it comes to appliances there are


  • Amana
  • Magic Chef

Middle range 

  • GE Profile
  • Whirlpool

Upper middle range

  • Bosch
  • Bertazzoni

High end

  • Wolf
  • Miele
  • Viking
  • Sub Zero

Ultra Premium

  • La Cornue
  • Lacaranche
  • Aga

Unless you are selling your apartment to a billionaire (though possible in this town), skip the ultra premium appliance brands, which can cost into the six figures (believe it). If you are going to be selling your place for north of two million dollars, then invest in the high end package. You’ll get it back in the sales price.  In all cases don’t bother with the low-end.

The same goes for fixtures, except in this case if you can get the ultra premium fixtures on sale, do it. A little Ebay and sale stalking will go a long way.


  • Kohler (Kohler’s high end range is “middle range” but most is low-end)
  • Moen

Middle range 

  • Elkay
  • Hansgrohe

Upper middle range

  • Blanco

High end

  • Dortbracht
  • Lefroy Brooks

Ultra Premium

  • Boffi
  • Bulthaup
  • Waterworks

As a last point make sure your fixtures match your aesthetic. If you have a minimalist modern place, choose Dornbracht, Boffi, or Bulthaup. If your style is more traditional or transitional, then Lefroy Brooks or Waterworks are the way to go.


Above: Waterworks fixtures in a transitional style kitchen.


Above: Boffi fixtures in a modern, minimalist kitchen.

Hope that bit of real estate fluff was helpful to those of you doing renovations.  If you want to hear some expert opinions on your kitchen renovation, don’t hesitate to reach out to us!



The Insider: Let’s Zoom Out for the Big Picture

By | The Insider | No Comments

There have been lots of breathless headlines recently, such as:


“With high levels of inventory and affordability woes, these four cities have been hit first by the housing slowdown.”


And so on.  So let’s zoom out and look at what’s really going on.

We need to look at (only) four things. employment, credit conditions, foreclosure activity, and supply.  We’ll take them one at a time.

One: Employment

It took 2.5 years to recover from the Covid-19 employment shock. We are, in fact, back where we started before Covid right now (nationally).

Here in NYC, we are not quite back to where we were pre-Covid. But still, the recovery is striking.

This is a blended rate however. The unemployment rate in Manhattan is a lot better:

Two: Credit Conditions

As you can see from the graph above, credit conditions are still pretty tight, and NOTHING like they were during the housing bubble of the mid-aughts.

Three: Foreclosure Activity

Foreclosure activity nationwide is lower than it has been since 2005. In New York City, the distribution of foreclosures looks like this:

Manhattan continues to see very little foreclosure activity, whereas the outer boroughs are disproportionately hit.

Four: Supply

Folks, we are below the 10 year average supply market wide.  Significantly, in the new development segment, in Manhattan, supply has fallen below 6,000 units for the first time since 2018.  Furthermore, that supply constriction is not going away any time soon.


The US is fine from a lending standards standpoint. Better than fine, in fact. Employment is tight, and in Manhattan it is strong. Foreclosures are a non-issue nationally and a rounding-error matter in Manhattan. Finally supply is tight! And in the crucial new development segment, the years-long supply overhang is finally gone.

The same factors are not as rosy in non-prime NYC as the outer boroughs (besides prime Brooklyn and Queens) are suffering unemployment and foreclosure stress. But in our core markets, everything is just fine.

Have a great weekend, everyone!

The Insider is a weekly blog from the Rubin Team covering current trends in New York City Real Estate.

The Insider: Congestion Pricing! What it means for NYC Real Estate

By | The Insider | No Comments

Back in 2019 New York State passed a law authorizing the implementation of congestion pricing here in the City. First what is it?

Congestion pricing levies tolls on vehicles entering the Central Business District of Manhattan. This is defined as all areas south of 60th Street, but excluding the West Side Highway and the FDR Drive. You can only be charged once a day, even if you leave and return.

Range of Proposed Central Business District Toll Prices:


  • $1 Billion annually to fund capital improvement projects at the MTA
  • 20% reduction of vehicular traffic in the CBD
  • Better air quality
  • Improved street level experience for all
  • Reduced parking placard abuse (people who abuse the system for free parking will now have to pay the toll)
  • Decreased travel times in the CBD


  • Increased cost or travel time for those who drive through Manhattan daily (such as from Brooklyn to Jersey)
  • Motorists driving from Jersey already pay tolls (and you can’t blame them for avoiding NJ Transit trains!)
  • Could have a negative impact on owners of retail properties if foot traffic falls significantly

When: Late 2023, earliest.


What Does It Mean For Residential Real Estate?

  1. In other places that have implemented congestion pricing, the prices of properties in the affected zone have risen. London saw a $15 billion increase in property values inside the affected area. We expect the same trend here.
  2. Traffic right outside of the zone (in this case the 60s both East and West Sides) will see increased vehicular traffic as drivers circle looking to park and avoid the tolls. This will mean pricing pressure in these areas.
  3. Parking in the 60s will get even more expensive than it is now.
  4. Outer borough locations poorly served by subways will face pricing pressure as driving will become a less attractive option and those commutes can be grueling otherwise.
  5. People from Staten Island will be mad. Very.

For all the belly aching and hand wringing about congestion pricing, who doesn’t want less traffic, better air quality and for the MTA to get some badly needed capital improvements? Not to mention the upward pressure on real estate prices? I say, congestion pricing? Bring it on.

—NY Times


Have a great weekend!

The Insider: Rent VS Buy – It’s a LOT clearer than you think!

By | The Insider | No Comments

Click to view our seminar with top real estate and mortgage bank professionals to help determine whether to rent or buy in today’s market.

Instead of a Hot Listing of the Week, in this week’s Insider, we’re going to consider whether we should rent or buy. To make this example concrete, I am going to look in a building that has a similar apartment for purchase and rent.  I found two such apartments in Zeckendorf Towers, a large apartment building on Union Square, which are the two listings below.

Here’s the rental, which is a one bedroom, one bath rental for $5,000 on the 20th floor:

And here’s the sale, which is a one bedroom, one bath apartment for sale for $1,495,000 on the 18th floor:

As you can see, these apartments are quite similar, even if the one for sale is in slightly better condition.

With rents skyrocketing and the sales market settling down to a more balanced market between buyers and sellers, it is a good time to think about whether staying in a rental is a good idea, or whether it’s time to buy an apartment.

In one way, this is a surprisingly difficult thing to model financially. This is because it requires estimates of home price growth, rental price growth, interest rates, and equity price growth. Rent vs buy calculators are highly sensitive to these inputs, so you can get a very skewed answer unless you have accurate data. And picking a number out of the air because it “feels about right” leads to ridiculous outputs, as we shall see.

We are going to use the Rent vs Buy Calculator provided by the New York Times, the best one I have found. If you want to play around with it, which I suggest, you can see it here (you can access this link with a free account):


Let’s enter the calculator parameters and see what’s what:

  • Home Price: $1,495,000 (from listing)
  • How long do you plan to stay: 7 years
  • Mortgage rate: Jumbo 30 year fixed is 4.206% as of the first week of August
  • Down Payment: 20%
  • Length of Mortgage: 30 years
  • Home Price Growth Rate: 5.51% *see addendum below for data and calculation
  • Rent Growth Rate: 6.3% *see addendum below for data and calculation
  • Equity growth rate (S&P 500): 7.68% *see addendum below for data and calculation
  • Inflation Rate: 2.5%
  • Real Estate Taxes: 1.14% (taken from listing)
  • Marginal tax rate: 30% (Effective tax rate, including federal, state and local)
  • Closing costs of buying a home: 3.9% (my estimate for buying a condo, financed)
  • Closing costs of selling a home: 8% (my estimate for selling a condo)
  • Maintenance/renovation: 1%, which would be $15,000 per year in this example. This seems conservative, as spending $15k every year is a lot.
  • Monthly utilities: $100 (this is only what you wouldn’t pay if you were renting, typically heat and hot water)
  • Monthly common fees: $1,183, taken from listing
  • Common fees deduction: 0%
  • Renting security deposit: 1 month
  • Broker’s fee for rental: 15% of annual rent
  • Renter’s insurance: 0.75% (about right)

These inputs result in the following:

You can’t remotely rent this apartment for $4,000 in this market. The best comp is $5,000, a full 25% more than what our target rent rate would be if renting were a better idea. Sure, you can rent an apartment for $4,000. But it is not like-for-like and will require sacrificing the doorman, size, amenities and possibly the bedroom to get it done. So the overwhelming conclusion is that you should buy an apartment if you can afford it. I might add that I have run this scenario with several paired apartments to see if renting ever was a better idea according to the model and it never was.

Here is another way to think about it, as an extreme short cut: when you buy an apartment, it’s kind of like rent stabilization. Assuming you have a fixed rate mortgage, you know what you’ll be paying now and what you’ll be paying in 20 years. Sure, your taxes and common charges will go up over time, but marginally – and most likely not as much as your asset value (by a long shot). In New York City, rents can rocket upwards, and so long term assumptions about stable rental growth are suspect.

If you would like to join a Rubin Team free webinar to learn about purchasing in New York, tailored to people who are currently renting,  click here:


Have a great weekend, everyone!

Addendum Calculations

The following three calculations are based on calculating actual 30 year data from Manhattan for the compound annual growth rate (CAGR)


Home Price Growth Rate: 5.51%

V(begin) = 400,000

V(final) = 2,000,000



Rent Growth Rate: 6.3%





Equity growth rate (S&P 500): 7.68% CAGR

V(begin) = $416.08 (S&P in 1992)

V(final) = $3,831.39 (S&P as of early Aug 2022)


An interactive seminar with top real estate and mortgage bank professionals to help determine whether to rent or buy in today’s market. Wednesday, August 24th, 6:30-7:30PM



The Insider: The Recession! Or Not… That Is The Question.

By | The Insider | No Comments

The Insider is a weekly blog by the Rubin Team, focusing on hot properties and the most recent NYC real estate trends and topics.

25 foot wide lot (!!)
Windows on 3 sides (!)
Original detail, including
• Ornate molding
• Marble fireplaces
• Pocket doors
2 family – income potential
Huge back yard
Amazing potential


5 Beds, 3 Baths


Call 212.321.7111 for an Insider showing!



In your group of friends/colleagues/family members, how often have you heard just in the last few weeks that the US is “already in a recession” or that one is right around the corner?
Joe Rogan, everyone’s favorite Nobel Economics laureate, lambasted the Biden administration for adhering to the actual way a recession gets called in this country. His complaint was that although the US economy has posted two consecutive quarters of GDP decline, the Biden camp was insisting on (the official) definition of “recession” in the US.
Thanks, Joe, but…
The problem is that in the US, a recession is not called off by the two-quarter rule, but rather by a group of eight academics at the National Bureau of Economic Research, who by the way, are nowhere near to making a call on the dreaded R-word. -Bloomberg
What are the big banks saying? Well…
“We’ve looked a lot very carefully into our actual data… There is essentially no evidence of actual weakness.” -Jeremy Barnum, CFO JP Morgan Chase
Executives at JPMorgan, the nation’s largest bank, said there were few — if any — signs that the U.S. economy was entering a recession. Retail banking customers are still spending money on things they want but don’t need, like travel and restaurants, and the businesses that JPMorgan lends to are making more use of some credit lines. Those are two signs that economic activity has — so far — held up despite a surge in annual inflation, which hit 9.1 percent in June. -NY Times
I am not saying that there won’t be a recession. What I AM saying is that deciding against a real estate purchase because we are in a recession is silly. Of more importance for NYC real estate is the skinny bonus pool for the Wall Street crowd:
Some investment bankers could see bonuses shrink as much as 45% this year, while those on the M&A side could see a decline of 25%, as a slowdown in deals cuts into banks’ 2022 bonus pools. -Bloomberg
Wall Street is still (even after the giant tech migration to NYC) the largest contributor to the income tax base in this town. And Wall Street bonuses drive real estate purchases. So an anemic bonus pool will have a negative impact, especially on the high end, on NYC residential real estate purchases.
On the other hand, as I’ve been arguing in The Insider for weeks now, the stock market is likely to post strong gains as inflation comes under control (indeed, it’s been up 8% in the last month during which time there was a 75 basis point hike in the Fed Funds rate). I would argue that the stock market rallying 20% from here will have a far more profound effect on Manhattan real estate than the Wall St bonus pool as it affects wealthy people in every industry.
In short, there are some mixed signals on the horizon. None of them are particularly dire at the moment, however, and several of them are very positive for NYC real estate. Finally, in a concrete sign that the market has waning concerns that inflation is an issue in the medium term, the 30 year fixed jumbo rate dropped to 4.21% APR (!) today according to Wells Fargo.
I will conclude with my current mantra: If a purchase of real estate positively affects your lifestyle, and you can afford it, this is a great time to buy.
Have a great weekend, everyone!