How Much To Buy An Apartment In Manhattan ((FULL))
According to appraiser Jonathan Miller and his Douglas Elliman market report, the average apartment in Manhattan in Q1 2020 was $1.89 million and the median sales price was $1.06 million. This includes both co ops and condos. Coops are less expensive than condos for a number of reasons.
how much to buy an apartment in manhattan
The word luxury is way overused in real estate. What makes something a luxury to someone might be basic to another. In Manhattan, we refer to the top 10% of transactions as luxury apartments. The very very top of the market, say perhaps 1-2% of transactions is considered ultra-luxury. Prices for these can be in the $4,500 - $10,000 per square foot range. Super luxury starts at $3,000 per square foot.
For instance, in order to compare the price per square foot of a $4,000,000 property has 2,000 sq. ft. interior square footage and a desirable 400 sq. ft. terrace to an apartment without a terrace, we need to do some math first.
You should have your own buyers broker to help you find an apartment. Some of us have years of experience and know all the good and bad buildings. Having an experienced broker will not only save you lots of time, but will end up saving you money too. Sometimes buyers think they take a DIY approach, however, buying a property in NYC is likely the most expensive financial transaction of their life. This is not something to be taken lightly. It's not the latest Apple device! For those who go the DIY route, remember that if you deal directly with the seller's broker, you will have to give away your right to representation as you will be in a dual agency situation, which is inherently bad for buyers and allows the seller's broker to double dip on the commission.
Mansion tax is a transfer tax paid by the buyer on properties equal to or greater than $1 million. The Mansion tax rates range from 1% (for sales of up to $2 million) to 3.9% (for sales of $25 million or more). The name of the tax is a running joke in Manhattan real estate circles, where a studio apartment often costs more than $1 million.
Midtown, Central Park and some areas in downtown are the most popular Manhattan neighborhoods for pied-a-terres. A pied-a-terre is an apartment that is not a primary residence and is instead used on the weekends and for vacations. A lot of people from Westchester or New Jersey have pied-a-terres to access the city on the weekends or even occasionally during the week after work in the city, but their primary homes are in the burbs.
Vacancy rates in Manhattan hover around 2%, which is relatively low compared to other large cities. The latest vacancy rate came in at 1.1%, as the sales market faltered over the last couple of years, more people decided to rent apartments.
Hudson Yards, an entirely new section of the city built over train tracks, is another option. In 10 years, once construction subsides nearby, Hudson Yards apartments will be the place to be for a desirable location. The Second Avenue subway line has made huge swaths of the UES more accessible and will see gentrification in the easter sections of the neighborhood. Finally, the Lower East Side gentrification has already taken hold and is rapidly changing that neighborhood.
Yes. We manage many of our investors' properties and do not charge for the ongoing management. We do not handle rental receipts or payments of common charges and taxes, however, we do everything else. Depending upon the market, either the tenant or the owner will pay the brokers commission. In the past, it was customary for the tenant to pay 15% of the first year rent split between the tenant's broker and the landlord's broker. If there are many units in a building, the owner may want to offer the apartment as No Fee, which means the owner pays the fee. In this case, we usually charge 1 month fee.
Average Manhattan apartment prices are based on whether the apartment is a condo or coop. Price per square foot of a condo is higher than for a coop because: a condo owner gets real estate title, does not require board approval and can rent out the apartment as desired without limitation.
The average sale price for a condo ranges from $908,991 for a studio apartment to $9,846,869 for 4+ bedroom apartments. Meanwhile, the average price per square foot ranges from $1,138 for a studio to $2,738 for 4+ bedroom apartments.
The average price per square foot for a co-op is roughly 50 percent lower than that of a condo. Average sale price for a co-op ranges from $553,734 for a studio to $5,109,433 for a 4+ bedroom apartment. The average price per square foot ranges from $852 to $1,596.
Newer condos tend to have more desirable amenities both inside the apartment (washer/dryers, anyone?) and outside (roof decks, playrooms, health-club-quality gyms, etc.) than co-ops and older condos. (That said, many co-ops have been retrofitting some amenities in order to stay competitive...often with mixed results.)
While the main advantage of buying is that you can build equity and the property can appreciate, the costs are much higher. Purchasing means higher down payments and monthly costs than renting. Even something like renters insurance in New York does not cost nearly as much as homeowners insurance, and you also won't have to worry about property taxes or maintenance fees.
Goldstein's piece of the city ended up being a one-bedroom co-op in Crown Heights, Brooklyn, which she bought at the end of 2013 for $280,000. She was just 25, four years out of college, and making around $30,000 a year as an editorial assistant for the Curbed Network. She was able to save as much as $2,000 per month, she says, because after graduating in December 2009, she moved back in with her father in the Manhattan apartment where she grew up.
She enjoyed living with her father in the heart of the city and appreciated that it enabled her to save so much. Without a rent bill, student loans or other day-to-day living expenses to worry about, she began dreaming of a place of her own. Many of the friends she grew up with were also living back home, as they looked for jobs and tried to save in the midst of the recession.
"I was very, very fortunate," says Goldstein. "After a year or two of living with my dad, I realized how much I was saving. I mapped it out and found I could save for a down payment if I lived with him for another year and a half."
"Our family just does not spend that much," she says. "My parents were good at saving and were good at spending on the right things, and not spending in a willy-nilly way. I found myself in this very lucky position and took advantage of it," she says. "I had very low expenses and no debt, so I had to make it happen."
She eventually shifted her focus to nearby Brooklyn neighborhoods like Park Slope and Crown Heights. After missing out on two apartments, one of which was scooped up with an all-cash offer, she offered over-asking price for a one-bedroom in Crown Heights, which was accepted.
Her mortgage broker, too, was a helpful resource. At the beginning of 2015, the broker contacted her to let her know that interest rates were lower than when she bought the apartment. Goldstein was able to refinance, and her bill dropped from $1,185 to $1,020 per month.
"I feel a lot more secure knowing I have this asset, which is massive," she says. "I paid $280,000 for the apartment, and I could probably sell it now for $480,000 or $500,000. It's appreciated a lot, which is incredible."
Regardless of where you are in your life, make sure you set a realistic budget so that you have enough money leftover for other expenses. Goldstein enjoys collecting art and taking in all of the cultural events the city has to offer. She wouldn't be able to invest in and enjoy those hobbies now if she bought an apartment she couldn't truly afford six years ago.
For young buyers in cities like New York, patience is key. Goldstein searched for apartments for seven months before she made her first offer. And she missed out on two apartments before the deal went through for her one-bedroom in Crown Heights.
"I think I was a little bit naive in general," she says. "I didn't really think of the other costs, like moving, and I had literally no furniture because I was coming from my dad's apartment." She paid her lawyer a flat fee of $1,900 for her services, and in addition to her monthly mortgage, she pays $600 to $700 per month in maintenance costs to the co-op.
Buying an apartment in New York City is more than just a status symbol of owning in one of the world's most iconic cities. It's also a solid investment decision. The key to deciding whether you should be purchasing a NYC condo or coop will be dependent what you plan on doing with the property.
Choose between a condo or a coop. You are well positioned to decide between a condominium or a coop apartment. There are numerous differences to keep in mind. One of the main ones to keep in mind is that coops are often slightly cheaper than condos.
It's your apartment. Do what you want. Stop having to ask for permission to paint, install shelves or get new appliances. It's finally your own apartment. Make the apartment your sanctuary. You can do with it as you please. Of course, if you are doing anything involving construction, you will need consent from your board.
Apartments in New York City are liquid. When you ask yourself, "Should I buy an apartment in NYC?" because you are concerned about asset liquidity, remember that NYC real estate is sough by domestic buyers and foreign buyers across the world. If you need to wind down your property portfolio, it can be done just as easily as you acquired it. 041b061a72