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

In the 2003 movie “Elf,” the lead character Buddy discovers he is human, though he has spent his life raised by elves.

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

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

Today, a two-bedroom apartment at that location would cost around $2 million, Garrett estimates, with a mortgage payment of around $10,000 per month before taxes, insurance and maintenance.

Given the current New York real estate market, it would be cheaper for the family to rent rather than own, according to Garrett.

The median asking rent for a two-bedroom, two-bathroom apartment in that same ZIP code is $9,175 per month as of November and $8,400 per month more broadly on the Upper West Side, according to StreetEasy, a New York City real estate search website owned by Zillow.

Meanwhile, the median asking price for a two-bedroom, two-bathroom apartment is around $2.5 million as of November and almost $2.2 million on the Upper West Side, according to StreetEasy data.

Renting is cheaper than paying a mortgage in all 50 of the largest U.S. metropolitan areas, according to an April Bankrate study.

That cost difference has grown in 38 metro areas in the past year, Bankrate’s research found. Yet, New York does not top the list for the biggest difference between renting and buying. Instead, cities including San Francisco; San Jose, California; Seattle; Denver; and Salt Lake City are in the top five.

There are reasons why buying can be more financially challenging. Rising home prices have outpaced rent increases in many markets, while mortgage rates have also climbed. Housing supply can also be an issue, with not enough homes available for aspiring purchasers.

Emotions may also factor into the buying vs. renting trade-off. For some, buying can offer a sense of security. Others may prefer the reduced responsibility for upkeep that renting provides.

“I actually consider a primary residence to be a lifestyle decision, not an investment,” Garrett said.

To help clients gauge housing affordability, Garrett said he refers to the 28/36 rule. That means no more than 28% of gross monthly income should go to housing costs, and total debt including housing should be no more than 36% of monthly gross income.

Monthly homeownership costs are typically measured by PITI — the sum of mortgage principal, interest, taxes and insurance.

The fictitious couple Walter and Emily Hobbs in the “Elf” movie would need gross income exceeding $450,000 to justify buying the property, according to Garrett.

Walter is an executive at a children’s book publisher, while Emily also has an unspecified high-level job. Even if they meet that income threshold for home ownership, they may still be squeezed by saving and planning for retirement, Garrett said. Moreover, their son Michael attends York Preparatory school, where annual tuition and fees currently run around nearly $68,000 for grades six through 12.

Garrett recently worked with a client who purchased a home in the same neighborhood for around $15,000 per month. Ahead of the purchase, Garrett cautioned the client about how the high home costs could require sacrifice in other aspects of life, including pushing their targeted retirement date later.

The “Elf” movie has other lessons when it comes to cost of living, particularly for the character Jovie, who works at Gimbels department store and lives in Chinatown.

Because it appears she is living paycheck to paycheck, she likely isn’t saving for retirement or emergencies, Garrett said, which is common among people who move to New York in search of success.

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

Those who move to New York or other big metro areas with similar aspirations may take steps to try to defray the high cost of living, Garrett said. For example, to ease her financial situation, Jovie may find roommates or additional streams of income, he said.