When someone uses the word affordable, it’s important to understand that it doesn’t have a universal meaning. What seems accessible to one person may seem very expensive to someone else. This is often the case with affordable New York City apartments.
For people with experience in the NYC real estate market; their awareness of consistently increasing property values means they have specific criteria for finding a good deal. But for someone new to this market, they may be shocked when they see the prices of different properties.
Table of Contents
- Putting Affordable Apartments in the Right Context
- Thinking About What’s Most Important
- What Buyers Need to Know About Affordable Apartments
- The Most Affordable Apartment Types in NYC
- Affordable Neighborhoods
- Final Thoughts
Putting Affordable Apartments in the Right Context
If you’re putting serious thought into buying in New York City instead of renting; it is important to start this process with the right mindset. The first thing to realize is that New York City has the highest cost of living in the entire United States. The second important reality is not only is New York City an expensive place to live, but the competition for real estate is high.
Competition for NYC real estate is due to the combination of its limited inventory and demand. As a result of New York City’s high cost of living and the high demand for real estate, the two best things buyers can do is be realistic about what they can afford and remain open to compromise.
Thinking About What’s Most Important
The worst situation that a New York City homeowner can get into is needing to sell their property prematurely. Because that’s the most common reason buyers lose money; it’s essential to have the future in mind as you start looking for a place to purchase. Specifically, you want to be able to find a property that can grow with you for at least five years.
Since you want a place that provides future flexibility, you may not be able to get 100% off your wish list. That’s why we recommend buyers focusing on getting 80-90% of what matters to them most. By being open to a little compromise, you’ll ultimately end up in the best position.
What Buyers Need to Know About Affordable Apartments
In New York City, buying an apartment is 22% cheaper than renting one. That being said, many new buyers overlook the full scope of costs associated with owning a home. Those costs include high property taxes and homeowner’s insurance.
In many cases, buying an apartment also comes with the responsibility of paying common charges or maintenance fees. In addition to understanding the full cost of an affordable New York City apartment; it’s also important to have your finances in order before buying.
Not only do you want your credit to be in great shape, but you also need cash available for your down payment; closing costs and six months worth of a capital reserve. Since there’s so much additional information that can help put you in the best possible position as a buyer in the New York City market, we highly encourage you to download and read our free Home Buyers Guide.
The Most Affordable Apartment Types in NYC
It’s not easy keeping up with daily expenses and the costs of housing in NYC. The city offers no end in excitement and opportunities, but all that comes at a price. When it comes to the house, that price comes in the form of either high rent or minimal living space. Given a choice, most New Yorkers are willing to sacrifice space if it means living in a hot neighborhood or a building with incredible amenities.
But if you like hosting parties with more than ten people or weekly yoga classes; then space might be a concern. Generally, the further out you go from Manhattan the more space you’ll get for your buck. However, there are other ways you can save on money and get more space. Here we have a list of apartment types that will get you more space for your money.
A First-Floor Apartment
Everyone wants a beautiful view from their apartment, and that view tends to come with a higher price tag. One easy way to save on housing is to choose a first-floor apartment. On average, the difference in price between a first and second-floor apartment can be as much as 15%. As you move up each level, it tends to go up by another 10%; which makes the difference between a first and third floor as much as 25%. Just keep in mind that in a walk-up apartment (no elevator) this will be reversed.
Speaking of walk-up apartments, that’s your next option. If you don’t mind walking up a few flights of stairs each day, then this can translate into significant savings. Compared to an elevator apartment, the price difference between each floor can be as high as 5%. Adding to that, your legs are going seriously toned within a few months of living in a fifth-floor walk-up. But if you’re planning to spend your golden years there, then this might not be an ideal choice.
Also, these types of units are typically located in buildings with six levels or less. Buildings with more than six floors must have an elevator.
A Post-War Apartment
Pre-war apartments are highly sought after for their high ceilings, thick walls, crown moldings, and other architectural details. But all the charm comes at a high price. If you want something cheaper, look instead for post-war apartments.
These are buildings built just after WW 2 when there was a housing shortage. As such, they’re usually less extravagant and come with simpler furnishing. But the one primary trait they still share with pre-war apartments is spacious floor plans. They may not come with all the modern amenities and floor-to-ceiling windows that you’ll see in new developments buts that exactly why they go for a lower price.
No doubt, a doorman is a great extra to have. They can receive packages for you and provide an extra layer of security. But if you want more space for less then they’re an extra you’re better off without. Narrow your search down further by looking for non-doorman buildings.
Simple economics tells us that the more demand there is for something, the higher the price and vice versa. Open-plan apartments are currently all the rage in NYC. These are apartments in which the kitchen, living room and dining room all seamlessly blend into one. But if you prefer a traditional setup with a separate room for each area, then you stand to get a better price. Look into what the latest design trends are in the city and then look for something else.
Admittedly, I still dream of living in Downtown Manhattan. As an Upper West Sider; while I appreciate walking on quiet streets and living near a vast amount of green space in Riverside Park and Central Park; I dig the vibe south of 23rd Street. Back in 2008 when we were searching for an apartment to buy, my husband and I aimed to live in Chelsea. We came pretty close to buying a co-op on 24th between Seventh and Eighth Avenues, but we couldn’t pull the trigger because the price was higher, and space required more work than comparable apartments farther uptown.
Disappointed, we figured everything happens for a reason, so we started to focus our search on the Upper West Side. I guess Chelsea wasn’t meant to be, because here we are, six years later, living in the heart of the Upper West.
If you’re in a similar situation and scouring for a deal; or trying to a neighborhood where you get the square footage for the least amount of cash, I encourage you to expand your search area. Although you’ll notice some apparent discrepancies from downtown, these alternative neighborhoods offer more inventory at less per square foot than you’ll find anywhere near 14th Street. And should you find your next apartment, you might even discover a handful of downtown’s coveted characteristics in your new hood.
Battery Park City
Battery Park City doesn’t exactly have a reputation for being completely livable. It sits on a 92-acre plot of land that’s owned by the Battery Park City Authority, a public-benefit corporation created by New York State. Despite having good schools, a landscaped waterfront, and easy subway access, the neighborhood also has a reputation for being a ghost town by night.
Homeowners in the neighborhood must pay higher monthly charges because apartment owners must pay ground rent to the BPCA. With high-end retailers like Hermes and trendy eateries like Shake Shack and luxury gym Equinox moving to the neighborhood, the area is set to take off as the city’s hot new neighborhood.
Lower East Side
The Lower East Side may have had a rough reputation in the past, but with new condo developments taking over the Bowery and boutiques, trendy hotels, bars, and cultural centers moving in, the area is a prime spot for nightlife lovers. While swanky developments are still little ways in the future and the area’s subway access is a bit limited, the affordability of the neighborhood can’t be beaten.
For those looking to live the high life, Gramercy Park is the neighborhood to check out. Gramercy Park has long held a reputation for luxury and is the only neighborhood with a private park—if you live on the edges, you get a key with your purchase. There are also gorgeous townhouses that date back to the 19th century. And while properties on the west side of the park are pricey, if you look east, the cost goes down as much as $1million.
For your savings on living in an elite area, you will have to make a small sacrifice on completely easy conveniences like subway access and restaurants and shops. Once the Second Avenue subway is constructed, linking the area to Midtown, prices are sure to change.
With the Second Avenue Subway slated to open at the end of 2016; and an array of hot new bars and restaurants already doing business in the nabe, Yorkville may be the next most happening area in Manhattan. Although most of the neighborhood is a haul from Central Park, Carl Schurz Park is easily accessed from most spots in Yorkville.
The key is to buy an apartment within the next year before the subway is completed, however. You’ll have to endure about another year of construction dirt and noise (perhaps less, depending on the time you buy), but after the train starts running, your property value will soar, and you’ll have access to a brand new subway line with escalators and elevators and a climate-controlled platform. Currently, you’ll find 61 properties less than $750,000 on the market.
Similar to Greenwich Village–– home of NYU –– Morningside Heights has a large college-age population. With Columbia University at 116th and Broadway, the area will continue to thrive, and remain an obvious option for real estate investment. You’ll find middle-class families as well as singles and students living in the neighborhood.
Benefits of living in this part of town include terrific dining options, Riverside to the West, and Morningside Park running through the heart of the area. The one train runs directly through the neighborhood with stops at 110th, 116th, and 125th and Broadway. Right now, Streeteasy.com shows 21 properties under $900,000 in Morningside Heights.
Spanish Harlem is an area brimming with culture, and can’t be ignored any longer as a viable choice for real estate investment. Known for its friendly demeanor, the enclave boasts a good selection of ethnic eateries, as well as the Target/Costco mall at 117th Street. With express bus service on First and Second Avenues, residents can reach the Upper East Side in mere minutes. Condo buildings have been developing over the last decade.
New York real estate is on the upswing, which means that Harlem is prime for another rebound. The introduction of a Whole Foods Market to the area is set to help gentrify the neighborhood and invite more bars and restaurants to the area as well; including name places like Marcus Samuelsson’s Red Rooster. Harlem is still a little ways from central Manhattan, and the disparity in prices is because of different housing options on different sides of the neighborhood.
While East Harlem is close to South Harlem, it is filled with housing projects that make it hard to find land to build condos. Columbia University campus is on the West Harlem end, and brownstones can be found in Central Harlem. Another reason for lower prices is fewer luxury accommodations, like those that might be found in Tribeca.
Kips Bay borders the East River between East 23rd and East 34th Streets. Many people don’t want to live so far east, as subway access is fewer and farther between. The area is excellent for first-time apartment buyers, as the neighborhood is mainly filled with co-ops; which tend to be less expensive than condos and help to keep prices in the area down.
Unless you’re in the Fortune 500; it’s just not possible to find an NYC apartment that covers all your wants and needs. You’ve got to prioritize things and make sacrifices. If space is one of those priorities, then be willing to go without an elevator, doorman; favorite layout or all three.
Talk with a local real estate broker and let them know what your priorities are and what your willing to go without. If space is a priority than the others really won’t feel like sacrifices when it comes time for the next dinner party.