What the Christmas movie ‘Elf’ can teach us about today’s cost of living

in 2003 movie “Elf” The main character, Buddy, discovers that he is human despite having spent his life being raised by elves.

He travels to New York to find his real family, including his father, who shares an apartment with his family on the Upper West Side.

The fictional apartment, located at 55 Central Park West, is home to Buddy’s father, Walter; his wife, Emily; and their son Michael. As the story goes, the apartment is likely to have at least two bedrooms, according to Cody Garrett, a certified financial planner at Measure Twice Financial in Houston.

By Garrett’s estimate, a two-bedroom apartment in that area today would cost about $2 million and require a mortgage payment of about $10,000 a month, not including taxes, insurance and maintenance.

According to Garrett, given New York’s current real estate market, it would be cheaper for the family to rent rather than own.

The average rent asking for a two-bedroom, two-bathroom apartment in the same zip code was $9,175 a month as of November, and more generally $8,400 a month on the Upper West Side, according to StreetEasy, a New York City real estate search site owned by Zillow.

Meanwhile, the average asking price for a two-bedroom, two-bathroom apartment was nearly $2.5 million as of November, according to StreetEasy data, compared to almost $2.2 million on the Upper West Side.

Renting is cheaper than paying a mortgage in all 50 largest U.S. metro areas, according to April Bank rate study.

Bankrate’s research found that this cost gap widened in 38 metro areas last year. But New York doesn’t top the list of the biggest differences between renting and buying. Instead, cities including San Francisco; San Jose, California; Seattle; in Denver; and Salt Lake City round out the top five.

There are reasons why buying can be more financially challenging. As rising house prices outpaced rent increases in many markets, mortgage rates also rose. Housing supply may also be an issue, with not enough homes available for willing buyers.

Emotions can also affect the balance between buying and renting. For some, purchasing can provide a sense of security. Others may prefer the reduced maintenance responsibility that renting provides.

“I actually view a primary residence as a lifestyle decision, not an investment,” Garrett said.

To help customers gauge housing affordability, Garrett said: 28/36 rule. This means that no more than 28 percent of gross monthly income should go towards housing expenses, and total debt, including housing, should be no more than 36 percent of gross monthly income.

Monthly homeownership costs are often measured by PITI, which is the sum of mortgage principal, interest, taxes and insurance.

According to Garrett, fictional couple Walter and Emily Hobbs in the movie “Elf” need a gross income in excess of $450,000 to justify purchasing the property.

Walter works as an executive at a children’s book publisher, while Emily has an unspecified high-level job. Even if they meet the income threshold for homeownership, they may still be under pressure from savings and retirement planning, Garrett said. Moreover, their son Michael attends York Prep; annual tuition and fees here currently run around $68,000 for sixth through 12th grades.

Garrett recently worked with a client who purchased a home in the same neighborhood for approximately $15,000 a month. Before the purchase, Garrett warned his client that high home costs might require sacrifices in other aspects of life, including postponing the target retirement date to a later date.

The movie “Elf” has other lessons about the cost of living, especially for the character Jovie, who works at the Gimbels department store and lives in Chinatown.

Garrett said he probably wasn’t saving for retirement or emergencies because he appeared to be living paycheck to paycheck, a common situation among people who move to New York in search of success.

As Leon the snowman tells Buddy as he leaves the North Pole for New York, “This could be a golden opportunity to find out who you really are.”

Garrett said those moving to New York or other major metropolitan areas with similar aspirations can take steps to offset the higher cost of living. For example, he said Jovie could find roommates or additional sources of income to ease her financial situation.