Cold Feet from Santa Fe
SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.
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Dear Ms. Real Estate:
I am an artist currently residing in a home/studio on Long Island. I am considering a move to Manhattan, and would like to know whether I should rent or purchase a live/work space. I am not wealthy, but do have some independent means. But during the recent Great Recession, I was badly stung when I sold my Santa Fe home.
—Cold Feet from Santa Fe
Dear Cold Feet,
Manhattan will continue to be one of the world’s most highly demanded places to live. The New York economy can be expected to remain strong, with resilience and adaptive response to change. Its bankers have once again become eager to make loans to developers, and you can be assured residential builders will find a way to take and use the proffered loans. You can expect to see another surge in new multi-family housing.
But there are some unknowns that may create some bumps in the path of economic growth, not the least of these being the enactment of additional business taxes and other equalitarian policies that will come from the new mayor’s office. If you buy your new home and subsequently have to sell while the economy is affected by one of these bumps, you will once again suffer a loss. But if you can wait out the period beyond the growth-stalling bump, you will have a good home and investment. The answer to your question is determined by your own staying power. If you can count on staying in your Manhattan home/studio for ten years or more, Ms. Real Estate advises you to buy. But if there is a chance that you will want to move again in less than ten years, Ms. Real Estate advises you to rent. Let me know your decision.
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