This is the closest New York has come to being a buyers' market in years. But for most city dwellers, the proposition only makes sense if they have a lot of cash to put down upfront and are willing to stay in their home for five years or more.
In the heart of the city, home prices are still stratospheric. A modest two-bedroom apartment in Manhattan, for example, can easily cost $850,000.
And while rents are among the highest in the nation, it's still cheaper to pay a landlord than a mortgage. During the first three years of owning a home, buyers will shell out an average of 11% more than renters, according to Trulia.
After five years, the numbers turn in a buyer's favor. That's when they start realizing an average 15% savings over renting, says Trulia.
Those willing to look further afield, say in Connecticut or New Jersey, will find many homes that sell for well below city prices. During the last three months of 2012, the median price of homes in the greater metro area was a much more reasonable $450,000.
Source: Trulia Savings are based on a comparison of total housing costs for buyers and renters and include transactional cost, such as commissions, taxes, appreciation and opportunity costs, like the potential returns of selling a home. The calculation assumes homeowners will put 20% down on a 3.5%, 30-year fixed-rate mortgage, will itemize deductions and are in the 25% tax bracket.
By Les Christie@CNNMoney - Last updated March 28 2013 12:23 PM ET