New York City real estate is “undervalued” for the first time in decades, but there’s a catch
For decades, New Yorkers have lamented sky-high rents and the affordability crisis that pushed many to leave the city, but a closely watched housing indicator suggests Manhattan may have quietly become a relative bargain - particularly for cash buyers.
According to Nick Gerli of Reventure App, the home value-to-rent ratio in Manhattan — the city’s wealthiest borough — has dropped to its lowest level in more than 20 years. That could make it an appealing market for investors or buyers paying in cash, who stand to save compared to renting.
Manhattan home values have declined by roughly 20% from their 2022 peak, while rents have remained high or recovered more quickly, resulting in a sharp decline in the ratio of home values to rents.
“Ignore talk about “NYC-exodus” and buy Manhattan long-term,” Gerli wrote. “It’s one of the few truly undervalued housing markets in the U.S.”
The home value/rent ratio in Manhattan is at the cheapest level in over 20 years.
undefined Nick Gerli (@nickgerli1) November 3, 2025
Meaning it could actually be a good place to buy.
Especially for cash buyers who want to save money compared to renting.
As a result - ignore talk about undefinedNYC-exodusundefined and buy Manhattan long-term.… pic.twitter.com/ZPacbuFrMy
Gerli points to post-pandemic stabilization in population trends as evidence that demand is returning. Manhattan’s population has been rising again since 2023, suggesting the pandemic-era exodus is starting to reverse.
Still, Gerli cautions that “undervalued” does not mean “affordable.” The median condo price in Manhattan remains above $1 million, with monthly costs — when factoring in taxes, mortgage payments, and HOA fees — often exceeding $8,000. For most Americans, owning a home in Manhattan remains out of reach.
What has changed is the market’s relative value: compared with rents and long-term trends, Manhattan real estate now looks more favorable for buyers and investors than at any time in recent memory.
Manhattan is an outlier for several reasons
While Manhattan may not reflect the broader trends across New York State, it stands out for another notable reason: rents relative to home prices have been declining sharply nationwide.
According to InvestorsObserver Research, all 50 of America’s largest metropolitan areas are now more affordable to rent in absolute terms than to buy. In fact, 39 major metros have flipped since 2021 from being ownership-favorable to rental-favorable markets.
Reventure’s data doesn’t dispute this national shift, but it underscores how relative trends matter.
Manhattan remains extraordinarily expensive, yet it could represent a better long-term value compared to its own historically elevated rents. The same can’t be said for many other U.S. markets, where housing demand is softer and price corrections remain limited.
Case in point: Redfin data this year shows the U.S. housing market currently has about 1.9 million home sellers but only 1.5 million buyers - a gap of nearly 500,000, suggesting a clear imbalance between supply and demand.