The Surprising Cost of Buying an Apartment in New York City
According to Sarah Funky, “New Yorkers throw away an average of $38,000 a year on rent alone.” Most New Yorkers do not own a home in the city because it is “way too expensive.” And honestly, I do not blame them in the slightest! Yet at the same time, 1 in 21 New Yorkers are millionaires hence why they can afford the beautiful apartments while the others can’t. This is mainly why 67% of New Yorkers rent their apartments while 36% of non-New-Yorkers rent properties. The average rent for a one-bedroom apartment is $3,200 which is 82% of the median American salary. Sarah met with various real estate agents to answer the question of why more and more New Yorkers do not own apartments.
Sarah Funky met with real estate agent Phillip Salem about the reality of buying an apartment in the city. The average cost of a one-bedroom condo (a property that is solely owned by you) costs 1 million dollars and this makes up 20% of the city’s real estate market while 80% are co-ops (owning shares of the building). The average cost of a one-bedroom co-op is $5,000. Condos require a 10% down payment while co-ops require a 20% down payment. Co-ops also require post-closing liquidity (a hypothetical statistic to that would be $5,500 monthly mortgage x 24 months = $132,000). There is also a flip tax which is 1-3% (about $10,000). For properties that are over $1 million in the city, there is a required mansion tax, which is also 1-3% (about $10,000). Then there is a transfer tax which is 1.875-2.025% (about $18,750). For Co-ops, there is a co-op application fee which can be anywhere between $2,000 and $5,000. The average total amount of all of these down payments, taxes, and fees, is $377,250. I don’t know about you but all of these statistics are making my head spin! At the end of the day, the little things make an apartment cost more or less and all of these extra taxes and fees will depend on the apartment that you are interested in. Before all of the apartment hunting madness commences, it is highly recommended to get a buyer's agent. It is free and they save you from a lot of stress. The more uptown you go, the higher the prices go. Once everything is cleared with your buyer’s agent you are ready to move into your dream apartment!
Sarah navigated through Compass.com which is a website where you can look at the area and cost of various New York City apartments. Phillip also works at Compass and he highly encouraged her to look on that website to see what she could find. What I liked that Sarah did too was that as she was looking at apartments online, she made a spreadsheet in Microsoft Excel about the apartment fees, price, and monthly mortgage for her to know how much she needs in total to get that apartment. She can now see how much she would be spending on the fees alone depending upon the apartment that she likes. Even though New York City is one of the most expensive places in the world, Sarah cannot imagine living anywhere else and I couldn't agree more. “Its energy, glamour, and the people draw me back.” From the moment I saw the Radio City Rockettes, I fell in love with this city. As a little girl, I knew that I wanted to live in the Big Apple. Overall, Sarah’s positive yet honest personality helped me prepare for the unexpected when it comes to apartment buying in New York City.
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