The average cost of a home in New York is $415,000, but prices vary greatly depending on where you live, with different regions offering vastly different pricing. For instance, the average cost of a home in New York City is around $800,000, while in Manhattan specifically, it is over $1.3 million.
In Long Island and Westchester County, it’s a bit cheaper, and the average price is around $650,000. But if you go farther upstate to cities like Kingston or Hudson, it’s even lower, and median housing prices are between $350,00 and $400,000. Plus, there are always small towns throughout the state that are even cheaper than that. So, the cost of a home in New York largely depends on where you look.
Housing prices in New York are not dropping yet, however, the market is beginning to cool off. Between June 2021 and 2022, median sales prices in New York rose 13.1%, representing 26 straight months of growth. But with increasing inflation, high sales prices, and interest rate hikes, the market began to cool off in the second quarter of 2022.
A total market crash is unlikely to happen, but it seems like the country’s current economic conditions have slowed the demand, putting an end to this rapid growth that followed the pandemic. Statewide prices have contained to increase into the summer of 2022, although at a slower rate than the previous months.
It depends on what kind of deal you’re looking to get. June tends to be the best month if you’re looking for the lowest listing price. Listing prices are about 5% lower than the average in June compared to other months. But October is your best bet if you’re looking for the most inventory.
On average, there’s roughly 11% more inventory in October compared to other months. But if you’re after the best interest rate, then December is likely the best option. Fewer people tend to look for homes in the winter, so you can often get a discounted rate by looking in the off-season.
Saving for a down payment is a crucial aspect of buying a home, so knowing what to expect is essential. The average down payment on a home in New York State is just under $35,000. While this figure will vary greatly depending on the cost of the home you’re looking to purchase, you should expect to save a substantial sum. The average first-time homebuyer usually pays about 6%, but a repeat buyer usually pays around 13%. While banks recommend putting down 20% to avoid private mortgage insurance and other fees, most buyers pay less than that, especially if they are using a government-backed FHA, VA, or FDA loan.
It all depends on where you’re looking and what you can afford. Most experts agree that you shouldn’t spend more than 28% of your salary on mortgage payments. So, if the average home price is $400,000 and the average down payment is $35,000, the average mortgage payment should be around $2300 for a 30-year fixed rate loan at 6.5% (the standard rate in the country at the moment). So, if you are a typical borrower, you should have a household income of around $100,000 to afford the loan safely. However, that’s just the average and will vary greatly depending on your city and region.
Condos are a prevalent style of housing found all over New York State. Most New York City residents looking to buy a home are most likely going to look at condos because they’re the most common (although there are also rowhouses and detached homes in the outer boroughs). But you can also find plenty of condominium complexes all over New York State that are ideal for those who want to own a home but don’t want to deal with the upkeep of a detached residence.
A co-op is a property where the owner purchases shares in a corporation that owns and manages the building and gets to live in a chosen unit as a benefit. Co-ops are most common in New York City and offer a more affordable alternative to a condo. However, the approval process is often rigorous, and the co-op’s board must confirm applicants before they can purchase a unit. So, it isn’t the best option for everyone.
A townhouse is a type of housing that features multiple floors and shares walls with an adjacent property but has its own entrance. Townhouses are standard in New York City and other parts of New York State and offer a healthy blend between an apartment and a detached home. They offer more square footage than a condo but not as much upkeep as a detached home, making them ideal for retirees, young professionals, and first-time home buyers.
Fully Detached Home
Fully detached homes are the most common type of housing outside New York City. While you can find detached homes in certain parts of Queens and Brooklyn, detached homes are more common in the suburbs and small towns in upstate New York and Long Island. Fully detached homes offer square footage and large plots of land attractive to growing families who need space for kids and pets to run around.
A loft is a type of apartment that is characterized by high ceilings, an open floor plan, large windows, and exposed brick. Typically, they are constructed in former industrial buildings and feature a rustic aesthetic many homeowners love. Lofts are very trendy and in high demand, especially in major urban areas like New York City. However, they may be slightly more expensive than a standard apartment or condo due to the high demand.
Due to the comparatively high housing prices, many New Yorkers often debate whether they want to rent or buy a home. In New York City, a little over two-thirds of residents rent due to exorbitant real estate costs. The median household income in NYC is just $67,000 per year, far below what is required to purchase a home. However, the homeownership rate in the state overall is around 56.3%, according to the Federal Reserve. So, it all depends on your financial situation and where you live. Homeownership offers more stability and economic benefits compared to renting. But it can also be more expensive and comes with greater responsibility.
Should I Get Pre-Approved?
Yes, it always helps to get pre-approved before you start looking for a home. If you’re just browsing to see what’s out there or you’re planning on paying cash, then pre-approval doesn’t matter as much. But if you’re serious about making a purchase and plan on taking out a loan, you’ll need to be pre-approved before a buyer will entertain your offer.
Will I Get into a Bidding War?
It depends on where you look and what type of property you’re looking to buy. Most housing markets across the state have begun to cool down, which means you likely won’t get into a bidding war if you’re looking for an average detached home or condo. But, if you’re after a property with exclusive amenities or unique features, you may face competition from other buyers that could lead to a bidding war.
How Long Before I Can Move In?
The time required before moving in depends on what you negotiate with the seller. In some cases, you can begin moving in as soon as the sale closes, while in others, you may have to wait several days or weeks. In most cases, you can usually close on a home and move in within 30-45 days of signing the contract. But this can be prolonged due to financing issues or other concerns, such as board approval.
What Can I Expect at Closing?
The closing in New York State will be similar to what you’d expect anywhere else in the country. A few days beforehand, you’ll do a final walkthrough to ensure the property is in a fit condition for purchase. On the day of the closing, you’ll meet with the seller and their attorney to sign the necessary documents and finalize the sale. You’ll also bring the outstanding balance needed to make the purchase (known as cash to close). If everything goes as planned, you’ll complete the necessary paperwork, and the title will be transferred over to you that same day.