Starter homes in New York City typically cost anywhere from $400,000 to $800,000. But, for those seeking to purchase their first home, there’s a catch: you get less space.
In fact, a starter home in Manhattan may be no larger than a few parking spaces, according to StreetEasy.
Across New York City’s other boroughs, the median footprint of a typical starter home has decreased by 90 square feet to 900 square feet in August. That’s 9% less than it was three years earlier.
The reduction in median square footage was most obvious in the historically more affordable neighborhoods of Queens, Staten Island, and the Bronx. Here’s a breakdown:
- Manhattan. Starter homes in Manhattan have consistently been the smallest in the city, measuring 686 square feet. Given that a normal parking space in New York City is about 153 square feet, this is equivalent to about four and a half spaces.
- Brooklyn. Starter homes in this borough are the second most costly after Manhattan, at $658 per square foot. As of August, the median size for starter houses in Brooklyn was 924 square feet. That’s 8% less than it was three years prior.
- Queens. Since the pandemic, there are currently 11% fewer starter houses available in Queens due to sharp hikes in asking prices. Additionally, it is the borough where the cost per square foot of a home has increased the greatest. Although still more inexpensive than Manhattan and Brooklyn, the average Queens starter house has lost 150 square feet in the last three years.
- The Bronx & Staten Island: With a median price per square foot of $386 and $414, respectively, The Bronx and Staten Island continue to be the most desirable neighborhoods for first-time homebuyers. These neighborhoods’ starter home inventories have significantly decreased in recent years, falling by 51% in Staten Island in August from three years earlier and by 23% in the Bronx, as more properties are now being listed for more than $800,000.
Listings between $400K and $800K in price are not only becoming smaller in square footage but also tougher to find.
There were roughly 4,500 listings for sale in this price bracket as of last month. There were 5,300 listings at this price point three years ago, before the Covid-19 pandemic. That means there were 15% fewer listings available in August for typical first-time homebuyers.
For an eager buyer who can’t wait for a downturn to purchase their dream home, mortgage lender NASB Financial Inc. NASB is offering self-employed mortgage options for the handyman or self-incorporated day trader.
Asking prices across New York City are beginning to moderate after sharp increases this spring, as buyers jumped into the market to get ahead of rising interest rates.
After a hyper-competitive market led to the tightest market in six years by April, the median days on market rose modestly by three days month-over-month to 69 days in August. As the sales market continues to rebalance, some priced-out first-time buyers should be able to find opportunities to rejoin the market if they have the salary to do so.
The most recent Census Bureau data says the median yearly salary of top-earning young adults that live in New York City hovers at around $87,446. Current 30-year fixed mortgage rates vary from 6.6% to 6.9%. The $400K–800K range is consistent with these figures.