To buy or not to buy? That is the question.” Taking a cue from Hamlet, this question is on the minds of many contemplating moving to New York City these days.

“Many are taking advantage of this slightly-down market by buying, while others are opting not to buy at all, but rather to remain renters until the economy and/or their own fortunes are more favorable for securing a mortgage and purchasing property,” says Marilyn Harra Kaye, president of MLBKaye International Realty Inc. “Real estate has traditionally kept up with inflation, but the buyer knows in the short run about their finances, stability and needs, so paying for it becomes a personal issue.”

Even though the New York City housing market has not been hit nearly as hard as many other areas of the country, the ongoing recession has had an impact on how people undertake the search for a co-op or condo.

“What is going on right now is a lot of economic instability and political instability, and beyond that the restrictions are in place on people looking to secure mortgages has become incredibly stringent compared to the hey day,” says Gary L. Malin, president of CitiHabitats. “I think a variety of factors are playing into people’s minds that make them consider renting.”

CitiHabitats has divisions in renting and buying and have seen the number of those renting in the last few years increase by 10 to 20 percent. In fact, the past two years it has averaged about 13,000 rentals in Manhattan, far more than the number they are selling.

Malin compares the rent vs. buy question to that of dating vs. marriage, explaining that you want to be sure that you are confident in your circumstances before making any long-term commitment.

“If you rent, you need to make only a one-year commitment, and there are a lot of amazing properties with amazing amenities available,” he says. “There is great flexibility in renting and it gives people a year to figure out what’s happening with them personally, economically and allows them to be conservative in their approach.”

Of course, there’s a case to be made for buying and a case to be made for renting.

“One should buy when it makes fiscal sense for them to own and they feel the risk in tying up capital is worth it to them,” says Marc Lewis, the chairman and senior advisor at Manhattan brokerage A.C. Lawrence & Co. “Many people feel that apartment sale prices will go down further and if they wait, they will get a better price. Others feel the prices have gone down enough to make it worth their while. Others feel they want to temporarily park themselves in a rental apartment and wait out the marketplace.”

Finances Play a Role

Those looking to buy often have a hard time getting the financing they need to get the property they desire, so they are forced to buy something smaller than they envisioned.

“These people are forced into a situation because the dynamics aren’t working in their favor, and that impacts their decision,” Malin says.

Choosing between a co-op and condo can also play in the decision to buy or rent. Condo prices are in some cases 60 percent higher than a co-op of the same size, but there is usually no underlying mortgage on the building, so carrying charges are less.

“In Manhattan, there is a much larger co-op market but there is very little financing for loans in co-ops,” says Kaye. “Money was given to bail out the banks but there was not a quid pro quo to give cooperative loan financing and it is hard to obtain, so the reason to rent becomes a financial one.”

Since the recession has hurt many buyers’ financial statements with decreases in the value of their assets, that could work against a co-op buy when you have to go up in front of a committee and reveal your finances.

It’s a Buyer’s Market?

Industry experts explain that in today’s market, especially in Manhattan, it’s a great time to buy a condo or co-op.

“Pricing has not appreciated significantly, interest rates are ridiculously attractive and many segments are buyer’s markets,” Malin says. “If you can get into it today, things will eventually go in a positive direction, so you put yourself in a situation to buy in somewhat of a depressed environment and capitalize for when the pendulum starts to swing in the different direction.”

According to Karen A. Berman, vice president and director of sales for Argo Residential, this market is not a wise one for investors to get involved in.

“Years ago you would have investors come in and buy something and try to flip it soon after and make a profit; that’s not happening now,” she says. “The same holds true for someone who is planning on leaving a home in less than four years. You’re taking a big chance.”

Plus, she says, some boards are more lenient now and it might be easier to get into a co-op that you won’t be able to when things start to turn around.

“We have seen some boards bend over backwards to help shareholders sell apartments,” she says. “I think this will change soon and they can get back to being choosey.”

For those on the fence between buying and renting, if one can obtain financing at the attractive rates that are out there right now, and are comfortable with the down payment and reserves required, it’s an amazing time to buy.

“Those scratching and clawing to find a down payment or whose credit scores aren’t so good so they will be paying a higher interest rate—maybe they need a year or two more and these people are well served to stay in the rental market,” Malin says. “For those who have the money, it’s the perfect time to buy.”

Pros and Cons of Renting

The biggest downside you will hear about renting is the perception that you are throwing money away that can be used to establish equity and create tax benefits.

“A lot of time people are led to believe that renting is bad, but it’s not. I think renting in today’s environment is a flexible alternative for people,” Malin says. “I think that American Dream of owning property and getting the tax deductions is overstated.”

Berman says that renters in Manhattan have increased 25 percent in the last two years and it is at its highest point in five years. With that in mind, she suggests that if you find something you like, don’t wait to make a move.

“It’s a very difficult market to find an apartment and landlords are no longer making concessions because they don’t need to,” Berman says. “If you like it, you better take it immediately because they are going quicker. A lot of people don’t understand that. It’s all about the mentality.”

A smart shopper will let their personal circumstances guide them to a choice.

“If you only plan on living at a home for 2 to 3 years, buying makes no sense. The costs going in and the costs going out plus market changes can put you in a situation where you walk away with less money,” Malin says. “You need to be in an apartment for five years to make it an attractive opportunity.”

Lewis says the benefit of renting now is that you can control your money and maintain liquidity to ride out the recession.

“The sales market under one million is flat, and on the high end is moving better,” Lewis says. “I expect 2012 to be very similar to 2011 on the sales end depending on the election results. If you are a landlord in Manhattan you are in a very good place now with higher rents and less loss factor. If you are a tenant looking for an apartment you will have to move fast and come prepared with all of your documentation.”

Role of the Broker

The job of the broker in this environment is to really understand who that consumer is and listen very carefully to what they are saying and guide them to the best outcome.

“We have a full-blown rental and sales division and we have data on both sides of the coin and we can give guidance on what makes the best sense,” Malin says. “We can fluently speak on both sides of the marketplace and that’s important for anyone looking.”

A broker should be honest with what is needed to put forth with a sale and understand that a decision is a personal one for the buyer. The decision should always be the buyer’s but access to information should come from the broker.

“To push a buyer with a sale in a co-op where he or she could get turned down because of lack of a good financial statement can be very costly for a buyer with lawyer’s fees on contracts that don’t come to fruition. So the best thing for a broker is to give the requirements and let the buyer decide,” Kaye says. “If a buyer has very little cash and is buying new construction, careful analysis might be prudent. It will cost less if they have more cash and perhaps they should wait and rent now or buy smaller. The bottom line is what is best for the buyer if you represent them.”

A buyer should also be proactive and educate themselves by reading everything about the market and value of renting vs. buying.

“The brokers need to present all the facts to the sellers and explain that if you’re looking for the old market, you could be waiting 10 years,” Berman says. “With the current economy, people are unsure about their jobs and are afraid of jeopardizing their down payment. It’s scary and they are scared to make a commitment.”

Keep in mind that this is one of the longest and deepest recessions in recent memory and the real estate landscape is still traversing uncharted waters. However, a buyer can still be very proactive when making a decision. Remember though, any decision should make financial sense personally and feel right.

Keith Loria is a freelance writer and a frequent contributor to The Cooperator.