Rising rents may spark urge to buy

Most city dwellers continue to rent, as they see buying as too risky in the still-fragile housing market.

But that sentiment is changing, said Mario Gatzambide, vice president of residential asset management for the LeFrak Organization. For one, rental prices have skyrocketed quickly. According to a Citi Habitats report last week, the average Manhattan rental has surpassed the market's peak before the recession.

Gatzambide also said that the decrease in new development has been affecting the rental market, as there are less apartments available to rent. The buying sector, however, has remained fairly stable.