Where are the New York City starter homes? They’re upstate or in New Jersey, according to two house- hunting couples.
These are the tough choices facing many New Yorkers with midlevel or modest incomes who dream of owning their homes.
That’s because the metro area continues to have some of the most expensive home prices in the nation, according to a new study by mortgage-information site HSH.com.
“It’s an expensive part of the world to do business,” said Keith Gumbinger, vice president of HSH.com. Land here, he added, is “incredibly expensive.”
Gumbinger advises house hunters to be flexible. “It may mean moving out to the sticks,” he says. Or it may also mean being open-minded about where you live within the region, adds Ray Mignone, a financial adviser in Little Neck, Queens, who believes there are a few home bargains on Long Island.
“There are homes for first-time buyers, but you have to look around,” he says.
That’s what Ray DeWire and his wife, Brittany, both young middle-class professionals, recently did. They lived in Kew Gardens, where “we were having problems parking our car,” Ray DeWire said.
They wanted to stay in Queens, but “it was tough to find something in Queens,” namely, a one-family house at the right price and with the amenities that they wanted.
So they broadened their search, ultimately opting to buy a one-family house in Teaneck, NJ.
“We may have paid as much as if we stayed, but we got so much more space by moving,” DeWire says. “We have a garage. We don’t live right on top of our neighbors. It’s much easier for us, because we have a car and a dog.”
Jamaica Estates residents Mekale Jackson and his wife, Aisha, two young art-industry professionals with middle-class incomes, have a year-old daughter whom they want to grow up in a home. But it’s been rough.
“It’s a difficult environment [to buy in New York]. Queens is out of the question,” Mekale Jackson said. “You would have to pay $388,000 and then maybe more to fix up the house. We also want to find a home in a place where we are not going to pay for private school.”
They are now considering a move to a distant Westchester County community or New Jersey.
Jackson, a former Detroiter, says the high home prices are “sad.” “In Michigan you can get so much more than here for $388,000,” he said.
The HSH.com survey found that homes in the New York City area (including Long Island and northern New Jersey) have a median price of $388,900 and require a median monthly payment of $2,095. That number figures in the home’s principal and interest on the mortgage, as well as taxes and insurance.
The survey included co-op and condo units as well as houses.
One factor in the higher prices locally is that the supply of new units is not growing fast enough. Also, since the housing meltdown of 2008, it has become more difficult for many people to obtain a mortgage.
“At the moment we certainly still have restrictive underwriting standards, requiring them to have a very strong credit score and a very big down payment,” Gumbinger said.
Another potential roadblock is the average down payment of 20 percent. That means the prospective New York City-area homeowner must have $97,225 up front. Obtaining a mortgage also requires an annual household income of just under $90,000, HSH.com said.
But hey, believe it or not, it could be worse. In San Francisco, you’d need an annual income of $137,000.