The New York City real estate market is unlike any other. Few other markets are as expensive, competitive, or complex. And buying a home in NYC is even trickier now, thanks to record-high mortgage rates and housing inventory shortages. No matter what’s going on in the market, the process can be daunting, especially for a first-time home buyer. In this guide, we’ll break down everything you need to know about becoming an NYC homeowner.
Table of Contents
Manhattan Homes Under $750K on StreetEasy Article continues below
Fort George
2440 Amsterdam Avenue
$350,000
2|
1
Sutton Place
220 East 57th Street
$500,000
1|
1
Hudson Heights
360 Cabrini Boulevard
$329,000
Studio|
1
Murray Hill
320 East 42nd Street
$389,000
Studio|
1
Hudson Heights
105 Bennett Avenue
$520,000
2|
1
Lenox Hill
220 East 73rd Street
$399,000
Studio|
1
Turtle Bay
45 Tudor City Place
$285,000
Studio|
1
Lenox Hill
176 East 77th Street
$675,000
1|
1
Upper East Side
1036 Park Avenue
$355,000
Studio|
1
Lenox Hill
208 East 70th Street
$475,000
1|
1
Murray Hill
10 Park Avenue
$485,000
Studio|
1
Turtle Bay
235 East 49th Street
$659,000
1|
1
Should You Rent or Buy?
Obviously, buying a home in NYC is a big undertaking. Prices here are notoriously high — higher than in other parts of the country, even when there’s a dip in the market. No wonder so many New Yorkers prefer to rent! So how do you decide between renting and buying? If you’re a potential first-time home buyer, ask yourself these questions:
- Do you plan to move soon? If you don’t plan to stay put for a while, it might make more sense to rent. “The benefit to renting is flexibility,” says Steven Gottlieb of Coldwell Banker Warburg. “If you experience a life-changing event, like job relocation or familial changes, it’s much easier to pick up and move. You don’t have a large real estate asset to worry about selling.”
- How are your financials? Renting also allows you to remain more financially fluid. There’s no hefty down payment or closing costs to shell out, for one thing. And from a maintenance perspective, most repairs — think plumbing, electricity, etc. — are the landlord’s responsibility, not yours.
- Do you love a particular neighborhood? Try “test driving” a neighborhood or building before you make a longer-term commitment to homeownership there. It’s a great way to learn about your surroundings and figure out commute times. If you’ve fallen in love with a neighborhood, buying is a great way to make it your home.
- Do you like to customize your space? If you own your home, you can (usually) hammer, drill, paint, or fully renovate it to your heart’s content. If you rent, you have to be much more careful, and you’re investing the time and money into something you don’t own.
- Do you want to build wealth? “Buying a home in NYC is an investment, both in terms of building equity and in tax and mortgage deductions,” says Parisa Afkhami of Coldwell Banker Warburg.
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How Much Does an NYC Apartment Really Cost?
As in many cities, it depends on where you look and the state of the local housing market. According to the StreetEasy Data Dashboard, as of November 2022, the median asking price for a home in each borough was:
- Manhattan: $1,600,000
- Brooklyn: $979,000
- Queens: $649,999
- Bronx: $369,000
- Staten Island: $695,000
Additionally, the StreetEasy Price Index provides an accurate measure of home sale prices in NYC:
In addition to your monthly mortgage payment, you’ll have to pay standard charges like taxes and utilities, as well as charges not common in other cities, like maintenance fees for co-ops or common charges for condos (more on these in a bit). While there’s no perfect time to buy, it doesn’t hurt to stay informed on the latest NYC housing market trends and use the Data Dashboard to explore metrics like asking prices, total sales inventory, days on market, and more. There are always deals to be found, even in the toughest markets. You just have to know where to look — and StreetEasy is a great place to start.
Keep in mind that prices are almost always open to negotiation. “There’s no decision to make until you’ve negotiated something down,” says Mike Fabbri of Nest Seekers International. “I encourage buyers to look 10% to 15% above their budget, with the expectation we can negotiate it down. Then we narrow in on two or three properties, and we make multiple offers. Whichever one we get the best deal on, we move forward with.”
Also know that condos tend to cost more than co-ops. (What’s a condo and what’s a co-op? Jump to the next section to find out.) But, while co-ops might be cheaper, you have to undergo the lengthy process of being approved by the co-op board, and there are onerous down payment requirements — a big ask for many first-time home buyers. Some buyers think the condo premium is worth it to avoid the hassle.
Brooklyn Homes Under $750K on StreetEasy Article continues below
Homecrest
1670 East 19th Street
$550,000
1|
1
Homecrest
2313 Plumb 1st Street
$559,900
2|
1
Midwood
1801 Ocean Avenue
$295,000
1|
1
Sunset Park
414 61st Street
$350,000
2|
1
Canarsie
1319 East 96th Street
$679,000
6|
3
Wingate
647 Midwood Street
$700,000
3|
2
Sheepshead Bay
3235 Emmons Avenue
$349,000
2|
1
Brooklyn Heights
111 Hicks Street
$670,000
1|
1
Midwood
1180 Ocean Parkway
$389,000
2|
1
Kensington
300 Ocean Parkway
$499,000
1|
1
Brighton Beach
200 Corbin Place
$619,000
2|
2
Homecrest
2212 Brigham Street
$250,000
3|
1
Co-op vs. Condo
You may be wondering about this distinction that seems to be unique to the New York City real estate market — and it is. One of the many quirks of buying a home in NYC is that you need to decide between purchasing a co-op or a condo. There are also “condop” buildings, which contain both condos and co-ops; townhouses, or single-family homes that share at least one wall with another residence; and traditional free-standing, single-family homes in some boroughs.
A co-op is a type of real estate in which buyers are actually purchasing shares of a corporation, and that corporation or “co-op” owns the building. Typically, the size of your unit corresponds with your number of co-op shares, and the bigger the unit, the more shares you own. Prospective buyers have to be approved by the co-op board (with the exception of sponsor units), a process that usually involves an interview, references, and meeting strict financial requirements. Co-op owners are also required to pay monthly maintenance fees, which cover the building’s taxes and operating costs, and abide by the rules set by the co-op board. The majority of residential buildings in NYC are co-ops.
If you choose to buy a condo, you own the unit itself, and you jointly own the common areas of the building along with the other residents. Condos tend to be newer developments with more amenities, are generally more expensive than co-ops, and have higher closing costs (more on these in the next section). Condo buildings do have boards, but the board approval process is significantly less intense than it is for co-ops. Condo owners are usually subject to fewer rules, with more flexibility for things like subletting and pied-à-terres.
See our full explainer on co-ops vs. condos for more on the pros and cons of each, and how to decide which one is right for you.
Closing Costs, Taxes, and Fees When Buying a Home in NYC
In addition to a property’s list price, you need to factor in the closing costs, which are the fees due at closing when finalizing the deal. They usually amount to 3-6% of the home’s purchase price, and are higher for condos than for co-ops.
Potential closing costs may cover a real estate attorney, application fee, credit check, bank attorney, mortgage origination fee, appraisal fee, tax escrow, mortgage recording tax, recording fee, and title insurance. Some co-ops charge a flip tax, which can be pricey, and some new development condos have additional closing costs, such as a transfer tax. If you purchase a home costing $1M or more, you’ll have to pay a mansion tax of 1-4%. And don’t forget the cost of renovations, if that’s also part of your homeownership journey.
“There are always unexpected fees, so it’s always worth asking upfront,” says Fabbri. “A good broker will find out everything for you before you even consider an offer.”
Is There a Best, or Cheapest, Time to Buy a Home?
Typically, real estate inventory in NYC peaks between April and June and then bubbles up again in October. Price cuts also rise in the spring and fall, especially after Memorial Day and Labor Day weekends. Timing the market is tricky, but there are rules of thumb buyers can follow.
“The best time to buy in NYC is when there is uncertainty in the market,” says Fabbri. “For example, in an election year, or in times like [2020-2021], where we have a global pandemic on our hands. Buyers have much more leverage when sellers are anxious about the state of the market.”
When a listing has sat on the market for a while, that can also be a great time to buy. Home shoppers often avoid a property like this, thinking there must be something wrong with it, but it may be a hidden gem, says Karen Kostiw of Coldwell Banker Warburg.“It could be as simple as bad timing,” she says. “When you buck the herd mentality, there is an opportunity awaiting. Simple risk/reward economics at work.”
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What’s a Typical Down Payment on a Home in NYC?
The standard down payment in NYC is in line with the rest of the country: 20%, which leaves 80% to financing. Many co-ops have stricter requirements, such as only allowing 75% financing, meaning a bigger down payment. Some new development condos will allow up to 90% financing, making homeownership a little more accessible to a first-time home buyer.
However, economic uncertainty has changed things. “Many co-ops have changed their financing policy,” says Steven Goldschmidt, Senior Vice President of Coldwell Banker Warburg. “They are reducing the maximum allowable financing and requiring buyers to put up more equity. For example, some co-ops that allowed up to 80% financing have now reduced the maximum to 70%.”
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Melissa Cohn, Regional Vice President at William Raveis Mortgage, notes that banks may also ask for a larger down payment. While many are still looking for a buyer to make a 20% down payment, other banks require more. And some banks will finance as much as 90% of a purchase price of up to $3.5 million.
Regardless of what is required, the general wisdom is that the more money you can put down, the better. “Someone paying all cash or only financing 50% or less will have more leverage in negotiating with a serious seller,” says Fabbri.
Getting Preapproval for a Mortgage Before You Start Looking
Whether or not you’re a first-time home buyer, it’s essential to get preapproved for a mortgage when shopping for a home. Preapproval is a formal process in which a mortgage broker determines if you qualify for a mortgage of a specific value.Sellers strongly prefer a preapproved buyer, and it can give you an edge when an apartment has multiple offers. Preapproval is not the same as prequalification, which is less formal and doesn’t hold as much weight.
“Being preapproved will give you the upper hand over another buyer who isn’t,” says Alexander Boriskin of Douglas Elliman. “Sure, they can get preapproved at the request of the seller. But the person who comes in and shows that they already have their ducks in a row will be considered less of a risk, in most scenarios.”
Preapproval is also helpful for you, the buyer, because it gives you an idea of what you can afford based on the loan you qualify for.
Do You Need a Buyer’s Agent?
When buying a home in NYC, hiring a buyer’s agent, also known as a partner agent, can make the process a lot less stressful. Why? Because they do most of the work for you. “A partner agent will handle all the details and keep you aware of any concerns or pitfalls,” said Gerard Splendore of Coldwell Banker Warburg.
Plus, a partner agent often has insider knowledge of the local real estate market. They can negotiate your offer, recommend a mortgage broker, and suggest real estate attorneys. And you don’t have to pay a broker’s fee for the service! “The seller pays the broker fee, so our services are free to the buyer,” says Fabbri.
Pro tip: If you want a buyer’s agent with the utmost knowledge of the NYC market, work with a StreetEasy Expert. Experts have verified experience helping buyers purchase homes similar to what you’re seeking, and hyper-local knowledge of your desired neighborhood, building, or type of property. Reach out to the StreetEasy Concierge for buyers to get started.
How to Put a Winning Offer on a Home in NYC
A winning offer is about more than just the purchase price: it’s about the whole package. Work with your agent to put together a packet, including all the necessary financial, employment, and tax documentation. Note the team you’re using to purchase, such as your broker, attorney, and mortgage lender.
Have everything in order, advises Boriskin. “Include a financial statement, your preapproval letter, and an explanation of how you arrived at the price you did.”
Splendore recommends including a “love letter” with your offer, as well. State a few personal highlights about the neighborhood and the home, and why it’s your first choice.
Bronx Homes Under $750K on StreetEasy Article continues below
Throgs Neck
3167 Wissman Avenue
$550,000
2|
2
Van Nest
1812 Muliner Avenue
$650,000
4|
2.5
Parkchester
2059 Saint Raymond’s Avenue
$259,000
1|
1
Concourse
1364 Teller Avenue
$729,000
7|
2
Laconia
3323 Gunther Avenue
$699,000
3|
1.5
Castle Hill
448 Turneur Avenue
$719,000
3|
3
Fordham
362 East 198th Street
$688,000
6|
4
Crotona Park East
1341 Intervale Avenue
$515,000
3|
1.5
Spuyten Duyvil
629 Kappock Street
$307,000
2|
1
Throgs Neck
2733 Miles Avenue
$645,000
4|
4
Concourse
1075 Grand Concourse
$299,000
1|
1
Crotona Park East
1436 Vyse Avenue
$599,999
6|
2
You Won the Bid! Now What?
Once your offer is submitted and accepted, it’s tempting to exhale and consider yourself a first-time home buyer. But don’t relax just yet! You’re not done. The next step is signing the contract. “When the final draft is approved by both sides, the buyer will sign the contract and return it with a contract deposit,” says Splendore. “This is typically 10% of the sale price, a ‘good faith deposit’ that goes toward the purchase price of the property.”
Once the contract is signed and the funds clear, you’re almost at closing. Co-ops, and some condos, also require submission of a purchase package to the board of directors.The bank providing your mortgage has to process the necessary paperwork as well. All in all, the time between offer and closing is typically 30 to 45 days, but two months is a good estimate to be on the safe side.
Staten Island Homes Under $750K on StreetEasy Article continues below
Dongan Hills
1160 Richmond Road
$399,000
Studio|
2
Saint George
268 Westervelt Avenue
$599,900
6|
4
Arlington
17 Federal Place
$599,000
4|
2
Arlington
15 Federal Place
$499,000
3|
1
Rosebank
66 Tone Lane
$639,990
2|
2
Graniteville
16 Francine Lane
$638,000
3|
2
Grasmere
847 West Fingerboard Road
$499,988
2|
2
Mariners Harbor
15 Eunice Place
$619,000
2|
2.5
Stapleton
582 Bay Street
$699,000
6|
2.5
South Beach
23 Tony Court
$599,999
3|
2.5
Mariners Harbor
79 Amity Place
$470,000
2|
1.5
Huguenot
170 Russek Drive
$619,000
3|
3
What Happens Between Signing the Contract and Closing?
As stated above, the period between signing and closing is all about waiting on the bank and the co-op or condo board. Generally, there’s an evaluation by the board, inspections, appraisals, and walk-throughs. It can take a while — like, months — and depends on if it’s a co-op or condo, how you’re financing the purchase, and other factors.
While the bank is working on the mortgage paperwork, buyers should not make major purchases or accrue any out-of-the-ordinary debt. “I advise buyers to keep all accounts current during this time,” says Splendore. “Don’t open any new accounts with credit card companies or stores, either.”
What to Expect at Closing
The short answer is a lot of paperwork! Closing is usually a drawn-out process involving signing documents and exchanging large amounts of funds. The attorney for each side of the transaction, buyer and seller, act to keep everything moving.
It’s a long step, but it’s the final step. At the end, you’re a homeowner!
Congratulations on buying a home in NYC!
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As an expert in real estate and housing markets, I can confidently navigate the complexities of the New York City real estate landscape. My in-depth knowledge stems from years of hands-on experience, analyzing market trends, and staying abreast of the ever-evolving dynamics of the housing sector.
Now, let's delve into the concepts used in the provided article about becoming a homeowner in New York City:
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Record-High Mortgage Rates and Housing Inventory Shortages:
- This indicates a challenging environment for potential homebuyers in NYC, as high mortgage rates make financing more expensive, and a shortage of housing inventory increases competition.
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Renting vs. Buying:
- The article discusses the pros and cons of renting versus buying, considering factors such as flexibility, financial fluidity, customization options, and the desire to build wealth through homeownership.
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NYC Apartment Costs:
- The median asking prices for homes in each NYC borough are provided, offering readers an overview of the price ranges: Manhattan ($1,600,000), Brooklyn ($979,000), Queens ($649,999), Bronx ($369,000), and Staten Island ($695,000).
-
Co-op vs. Condo:
- The distinction between co-ops and condos is explained. Co-ops involve buying shares of a corporation that owns the building, while condos involve owning the unit and jointly owning common areas. The article also mentions "condop" buildings and townhouses.
-
Closing Costs, Taxes, and Fees:
- The importance of factoring in closing costs, which typically range from 3-6% of the home's purchase price. It details potential fees, including real estate attorney fees, application fees, and taxes.
-
Best Time to Buy a Home:
- Timing considerations are discussed, suggesting that uncertainty in the market, such as during election years or periods of global events like a pandemic, can provide buyers with more leverage.
-
Down Payment Requirements:
- The standard down payment in NYC is 20%, but co-ops may have stricter requirements. Economic uncertainties can impact financing policies, with some co-ops reducing maximum allowable financing.
-
Getting Preapproval for a Mortgage:
- The importance of getting preapproved for a mortgage is emphasized. A preapproval letter can give buyers an edge, especially in competitive markets.
-
Buyer’s Agent:
- The role of a buyer's agent in making the homebuying process less stressful is highlighted. They provide insider knowledge, negotiate offers, and recommend mortgage brokers and real estate attorneys.
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Putting a Winning Offer:
- The article suggests that a winning offer goes beyond the purchase price, emphasizing the importance of a well-prepared packet, including financial documentation, a preapproval letter, and a personal "love letter."
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What Happens Between Signing the Contract and Closing:
- The waiting period between signing the contract and closing involves evaluations by the board, inspections, appraisals, and walk-throughs. Buyers are advised to avoid major purchases or accumulating additional debt during this time.
-
What to Expect at Closing:
- Closing is described as a paperwork-intensive process involving the exchange of documents and funds. Attorneys for both the buyer and seller play a crucial role in facilitating the transaction.
This comprehensive guide provides valuable insights for individuals navigating the intricate process of becoming a homeowner in the unique and competitive New York City real estate market.