$2500 \* 12 \* 40 = $1,200,000

andreyf · on Feb 19, 2009

But grandparent said:

In New York, price/rent ratios are above 40. A $2500/month apartment will sell for over a million.

And $1,200,000 > $1,000,000! The first sentence implies the second, but not vice versa... am I the only one to stumble on this?

To me, it sounds like saying "I have over 20 cats. I have more than a dozen cats!".

time_management · on Feb 19, 2009

Price/rent ratio almost certainly varies by neighborhood and general price level. What I meant to say, and should have said, is that price/rent ratios are mostly over 40. The specific data point that followed was one case of that.

The data points I actually know about are in the $2000-3000 range. One of my friends tried to buy his $2800/month apartment and got a quote around $1.5 million.