Buying residential real estate can be a daunting task for anyone who isn’t a billionaire. If you take a look at the figures, it can seem impossible. Manhattan real estate is particularly pricey, with the median price just for an apartment hitting a record-breaking $999,000 in the second quarter of 2021.
If you’re thinking about Queens or Brooklyn as an alternative, the typical value is over $736K and 875K, respectively. You can also expect to have to put 20 percent down here, which means you’ll need to have at least $147K for the down payment, if not much more. But that’s not all – in New York City, the closing costs are high, anywhere from one to two percent of the purchase price for a co-op, two to four percent for a condo, or even more if it’s newly constructed.
Homes vs. Apartments
By the 1930s, more New Yorkers lived in apartment buildings than single-family homes, and today there are fewer than 2,000 of them in Manhattan. There are many more in other boroughs, however.
While a brownstone in Brooklyn may be just as difficult to find and afford as one on Manhattan’s Upper West Side, there are a variety of housing options elsewhere. You’ll find single-family homes in Queens, Flushing, and Staten Island. Outer-borough neighborhoods like Forest Hills and Ditmas Park have options that are typically more spacious than an attached townhouse and sometimes come with plenty of outdoor space too.
In Dyker Heights, there are massive homes with lawns. Still, there are thousands of apartments on the market, so if you’re willing to compromise on size, it will be easier to acquire residential real estate in NYC.
With millions of people competing for a place to live in New York City, if you see a well-priced condo, apartment, or co-up that’s in your budget, it won’t last long, even if it’s a buyer’s market. In today’s seller’s market, it’s even more important to act quickly when you find something you like. Unless you plan to buy with cash, be prepared to lose a few to all-cash buyers.
Odds are, when you find a place that works, you’re going to find yourself in a bidding war. To have a chance at getting your offer accepted, you have to show the seller that you’re a serious buyer and can close on the home. That means you need to get preapproval for a mortgage before you start searching.
You should also be prepared to have earnest money on hand, which is submitted to the seller along with your offer. That money will eventually be applied toward your down payment, but f you don’t fulfill your obligations under the contract, it will go to the seller. In higher-priced markets like NYC, that can be $10,000 or more. The more you offer, the better the chance of scoring that desirable real estate.
Time It Right
The better news is that in Manhattan, the real estate market has been experiencing a bit of a downturn and prices are expected to decline further. By timing it right, you may have better luck. While the best time to buy a home in other parts of the country tends to be in late summer or early fall, in New York City, it’s usually spring or fall. Spring tends to be more competitive, so you might want to wait until mid-September of October to buy.