The recession has turned the old rent-or-buy calculus on its head. In the past couple of years, cautious shoppers have flooded into rentals, bringing the vacancy rate (as reported by Citi Habitats) down to 1.27 percent. The corresponding flattening of the co-op and condo market means that "the formula now tips in favor of buying," says Melissa Cohn, president of the Manhattan Mortgage Company. That's doubly so because mortgage rates are historically low—in fact, some loans are below 4 percent, and simply can't get much lower, because the banks have to make something on the deal.

The market is particularly attractive for starter apartments. Prudential Douglas Elliman's recent market report placed the median monthly rent for a Manhattan studio at $2,350. Do the math for, say, a $345,000 co-op studio (the median price, per the appraisal firm Miller Samuel). Put up 20 percent, borrow $276,000, and your monthly outlay hovers at $1,250 plus a maintenance that's typically around $500, and your monthly nut is about $1,750. For now. "We hit rock bottom in late 2009," says Elliman CEO and president Dottie Herman. "Certain pockets are going sideways, others are going up at a healthy pace."

You may have competition. Corcoran's William Bolls says buyers have started to return. "They were waiting for something to push them one way or the other," he says, and high rents have nudged them to the buy side. Nor are we poised for a second slump. "We're not going to see a free fall like after Lehman Brothers [collapsed]," says broker Noah Rosenblatt of analytics firm UrbanDigs.com. "There's not a lot of fear. Buyers have the confidence, for now, that this asset class"—real estate—"won't destroy itself."

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