Editor’s note: The effects of COVID-19 on the Staten Island real estate market have persisted for almost five years after the epidemic began: The post-2020 norm is reflected in the high home values, low inventory, and desired amenities by purchasers. We explore a number of subjects in our ongoing series, Market Shift: The Changing Face of Staten Island Real Estate, such as why so many properties are selling for more than their asking price, who is paying cash, and what it takes to afford a home in the borough.
New York’s Staten Island — With numerous fees, closing charges, and, of course, a sizeable down payment, the true cost of home ownership might be incalculable. For this reason, a lot of prospective buyers, particularly those in New York City, think the purchase is beyond of their price range.
What are the requirements to purchase real estate in the five boroughs? In order to make a monthly mortgage payment, how much should you be making? An annual salary of at least $200,000 or more is recommended by experts.
According to a recent survey by the New York-based real estate website StreetEasy.com, which looked at the average cost of property ownership in NYC, the citywide median asking price is an astounding $1.05 million. A buyer needs to earn at least $211,970 per year, which is nearly three times more than a buyer in the domestic market, in order to afford [that].
Using data from the U.S. Census, StreetEasy’s conclusions are alarming: in 2023, just little over 15% of all households in New York City earned a combined income of $200,000 or more. The sticker price is still high even though the numbers are a touch lower on Staten Island, where data indicated that an income of $151,483 is needed to afford the median price of $700,000.
Gennaro Lattanzi, a native of Staten Island and a 21-year veteran mortgage loan originator with New American Funding, said that the current market is extremely difficult for first-time buyers. The resulting mortgage payment is too high to qualify for, even though many people can purchase a home with as little as 3% down—or 0% for many military veterans.
According to Lattanzi, he is seeing an increasing number of applications with several borrowers to fulfill income requirements, as well as gifts from parents and loans taken out of retirement funds to reduce mortgage payments. Although there are grants for first-time homebuyers, the loan counselor stated that many purchasers are unable to qualify due to the low income limits.
He said, “It’s definitely a conundrum.” [But] it’s crucial to be optimistic. I advise my customers to pay off debt, work to raise their credit score wherever possible, and keep saving for a bigger down payment in order to better their overall situation. After talking to me about their financial situation, many have to reduce their goals about the maximum purchase price.
Although there are numerous residences in NYC that are priced below the $1 million median, many of them still require a combined household income in the six-figure level, according to the StreetEasy survey. A buyer needs earn slightly less than $95,000 a year, which is the income of roughly 39% of all households in New York City, in order to purchase a median-priced home in the bottom third of the market, which is defined as anything under $730,000. Lenders stated that although it is still high, purchasers are nevertheless making it happen.
Bryan Distefano, a mortgage retail supervisor with U.S. Bank, adding that it’s difficult to declare the New York City market unaffordable because consumers are still purchasing. This is certainly the most presents I’ve seen to help with the down payment in the more than 20 years that I’ve been doing this. However, it is being made possible by first-time purchasers.
“I agree,” said Annmarie Triolo, realtor and owner of Triolo Realty Group in Prince’s Bay.
According to her, the younger purchasers do receive gifts from parents and other relatives. 401(k) and other pension accounts are being used by the older purchasers. In order to get more value for their money, many purchasers are choosing to forego the trip to New Jersey. This explains why the market in that state is still competitive.
Triolo said she attributes the change to a sudden surge in cash purchasers and historically low mortgage rates.
With borrowing rates so low and a large number of cash buyers from Brooklyn, the ultra-seller’s market we had from 2014 to 2019 caused home values to soar, making them unaffordable for the present buyers at the increased interest rates, she added.
Even though the current statistics are depressing, StreetEasy pointed out that they are better than those from the previous year.
The survey pointed out that although Brooklyn has been the city’s most competitive sales market, a recent decline in mortgage rates offers some respite, with the average buyer in NYC with a mortgage currently earning $211,970, $10,625 less than a year ago.
According to StreetEasy, a buyer in Brooklyn today may afford a property with $1,857 less money than a buyer in the borough a year ago. Because of the borough’s falling asking prices, the income needed to purchase a home fell the greatest in Manhattan, where buyers may now make $33,593 less than they did a year ago.
Many purchasers, however, are still unable to afford Manhattan because a median-priced home requires at least $308,449 in income.
However, experts point out that statistics like these shouldn’t discourage homebuyers.
Lattanzi came to the conclusion that a lot of buyers have chosen to wait for rates and/or prices to drop. Regretfully, I believe the concept is faulty because, as rates decline, more buyers will enter the market, which would lead supply and demand to drive prices higher. I continue to believe that people should make a purchase as quickly as possible if they are able to and believe they can pay for it. However, keep in mind that affordability and qualifying are not the same thing. To ensure that the figures work for them, I advise my clients to put their budgets in writing.
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