“Elf,” starring Bob Newhart and Will Ferrell.
warner bros
In the 2003 film Elf, the main character, Buddy, discovers that he is human, even though he has spent his entire life being raised by elves.
He travels to New York City to find his real family. That includes her father, who shares an Upper West Side apartment with his family.
The fictitious apartment building at 55 Central Park West is home to Buddy’s father, Walter. his wife Emily; and their son Michael. Based on this story, the apartment likely has at least two bedrooms, said Cody Garrett, a certified financial planner with Measure Twice Financial in Houston.
Currently, building a two-bedroom apartment in that location would cost about $2 million, Garrett estimates, with mortgage payments of about $10,000 a month, not including taxes, insurance and maintenance.
Given New York’s current real estate market, it’s cheaper for families to rent than own, Garrett said.
The median asking rent for a two-bedroom, two-bathroom apartment in the same zip code was $9,175 a month in November, compared to $8,400 a month on the broader Upper West Side, according to StreetEasy, a New York City real estate search site owned by Zillow.
Meanwhile, the median asking price for a two-bedroom, two-bathroom apartment was about $2.5 million in November, compared to about $2.2 million on the Upper West Side, according to StreetEasy data.
Rent or buy?
View of Madison Square Park in New York City, Christmas lights and Manhattan skyscrapers.
Getty Images
The question “Should I buy or rent?” Today, its relevance is increasing.
According to an April Bankrate study, renting is cheaper than paying a mortgage in all 50 U.S. metropolitan areas.
Over the past year, that cost gap has widened in 38 metro areas, according to Bankrate research. But New York doesn’t top the list of biggest differences between renting and buying. Instead, cities including San Francisco. San Jose, California. Seattle; Denver; and Salt Lake City round out the top five.
There are reasons why purchasing can be difficult financially. In many markets, home price increases are outpacing rent increases, and mortgage rates are also rising. Housing supply can also be an issue, with not enough homes available for prospective buyers.
Emotions may also be factored into the buy-vs-rent trade-off. For some people, purchasing can give them peace of mind. Others may prefer the reduced maintenance burden that comes with renting.
“In fact, I view a primary residence as a lifestyle decision, not an investment,” Garrett said.
Garrett said he relies on the 28/36 rule to help clients determine the affordability of a home. This means that no more than 28% of your gross monthly income should go towards housing costs, and your total debt, including housing, should be no more than 36% of your gross monthly income.
The monthly cost of homeownership is typically measured by PITI, which is the sum of mortgage principal, interest, taxes, and insurance.
Garrett said Walter and Emily Hobbs, the fictional couple from the movie “Elf,” would need a gross income of more than $450,000 to justify a real estate purchase.
Walter is an executive at a children’s book publishing company, and Emily also has an unspecified high-level job. Even if you meet the income threshold for homeownership, you can be overwhelmed by savings and retirement planning, Garrett said. In addition, his son Michael attends York Preparatory School, where annual tuition and fees for grades 6 through 12 are currently approximately $68,000.
Garrett recently worked with a client who bought a home in the same neighborhood for about $15,000 a month. Prior to the purchase, Garrett warned his clients that high housing costs may require them to sacrifice other aspects of their lives, such as delaying their planned retirement date.
The movie Elf also offers other lessons about the cost of living, especially for the character Joby, who works at Gimbels Department Store and lives in Chinatown.
Garrett said she seems to be living paycheck to paycheck and likely isn’t saving for retirement or emergencies, which is common among people who move to New York in search of success.
Leon the snowman says this to Buddy as he leaves the North Pole for New York. “This might be the perfect opportunity to find out who you really are.”
People moving to New York and other metropolitan areas with similar aspirations may take steps to try to cover the high cost of living, Garrett said. For example, Joby may find a roommate or an additional source of income to ease his financial situation, he said.
