Read on to find the 10 best neighborhoods for first-time buyers on a budget.
Even in ultra-pricey New York City, there are quite a few neighborhoods where first-time buyers earning an average income will find a wide selection of affordable homes.
In time for home-buying season, StreetEasy has uncovered the 10 NYC neighborhoods with the most homes available to first-time buyers. Topping the list is Forest Hills, one of many Queens neighborhoods to make the cut. But our analysis even found a pocket of central Manhattan that’s relatively affordable for first-time buyers.
We sought homes that would be affordable to New Yorkers ages 25 to 44 who earn the median annual income of $70,406. According to a recent StreetEasy survey, millennials make up the majority of first-time buyers in NYC; the typical new buyer is 37 years old. In order to find the neighborhoods with the most options for these buyers, we looked at the absolute number of affordable listings in a given area out of all sale listings from 2018.
Our definition of “affordable” factors in a 20 percent down payment, as well as the costs of maintenance, taxes and common charges, to arrive at a maximum monthly outlay of $2,347. How much will that get you? The median asking price of all homes we considered affordable in these 10 neighborhoods is $335,000.
Assuming a median-earning buyer saved 10 percent of their gross income every year, it’d take them about 9.5 years to save up the 20 percent down payment on such a home. That may sound like a long time, but consider that saving up for a down payment on the median-priced home across all of NYC would take a lot longer — 18 years.
Forest Hills Takes the Top Spot
Forest Hills came out on top of our list, with 414 apartments on the market in 2018 that fell within the affordable monthly spending range. Bordering the lush Forest Park and known for its quaint Tudor architecture and tree-lined streets, Forest Hills offers a mix of detached single-family homes, spacious co-ops, and even some high-rise luxury condos.
Three other Queens neighborhoods qualified as affordable for average first-time buyers: Rego Park, Kew Gardens and Jackson Heights. The latter area is known especially for its elegant historic district and its easy commute to Manhattan — an express trip on the E train from Jackson Heights to Lexington Ave./63rd Street can take just 11 minutes. Though Jackson Heights has limited public outdoor space, many of its apartments include private gardens and courtyards.
| Neighborhood | Borough | Affordable Homes in 2018 | Share of Affordable Listings | Median Monthly Cost of Affordable Homes | Median Asking Price of Affordable Homes |
|---|---|---|---|---|---|
| Forest Hills | Queens | 414 | 40% | $1,907 | $309,000 |
| Riverdale | Bronx | 399 | 46% | $1,626 | $225,000 |
| Sheepshead Bay | Brooklyn | 326 | 32% | $1,653 | $279,000 |
| Bay Ridge | Brooklyn | 241 | 30% | $1,886 | $325,000 |
| Jackson Heights | Queens | 235 | 43% | $1,913 | $329,000 |
| East Flatbush | Brooklyn | 210 | 38% | $1,731 | $277,000 |
| Midwood | Brooklyn | 157 | 30% | $1,675 | $299,000 |
| Rego Park | Queens | 156 | 43% | $1,880 | $309,000 |
| Kew Gardens | Queens | 147 | 61% | $1,812 | $250,000 |
| Midtown East | Manhattan | 143 | 5% | $2,137 | $349,000 |
Affordability in Brooklyn Means Going Farther Out
In terms of affordability for a first-time buyer earning the median income, Brooklyn tied with Queens to land four neighborhoods on our list: Sheepshead Bay, Bay Ridge, East Flatbush and Midwood. But unlike the Queens neighborhoods, these Brooklyn areas all require around an hour on the subway to reach Midtown.
Some good news for buyers who do not mind living farther out: Many of these neighborhoods have some of the highest share of price cuts in New York. Nearly 30 percent of homes in Bay Ridge and Midwood received a price cut in the first quarter of 2019, signaling flexibility on the part of the seller and perhaps additional negotiating power for a potential buyer.
These neighborhoods have a number of other advantages: Sheepshead Bay offers ocean breezes and Avenue U’s Chinatown, where residents can find some of the best Chinese food in the city. In East Flatbush, buyers can find plenty of homes with backyards and some excellent Caribbean cuisine.
NYC 1-2BRs Under $450K Article continues below
Affordable Options in Midtown? They Do Exist
Manhattan may not be the first place first-time home shoppers on a budget think about when searching for a place. Yet the neighborhood of Midtown East can offer surprising value, ranking at number 10 on our list.
This neighborhood is still very pricey: Only 5 percent of its homes qualified as affordable in our analysis. Yet Midtown East has options for budget-minded buyers in large part because of its size. It’s one of the largest neighborhoods in New York City, and has a dense concentration of high-rise buildings, which translates into lots of listings — more than 3,000 in 2018. A small share of its overall stock still means 143 possible homes for average-earning shoppers.
Just north of Midtown East, the Upper East Side offers a sizable number of affordable units, too — it would have ranked at number 11 on our list, with 134 homes affordable to a median-earning first-time buyer. But while it does have some more attainable options, they make up an even smaller portion of the overall housing stock than in Midtown East.
A caveat for buyers eyeing these Manhattan neighborhoods: Be aware that many of the lower-priced units in them are co-ops, which often require buyers to have cash reserves or assets significantly larger than the down payment alone. Check with an agent for the requirements of any given building.
As always, “affordability” in NYC is relative. While more than 60 percent of listings in some of these neighborhoods would be affordable to an average first-time buyer, in others, the share of attainable listings was only 5 percent.
The good news is that buyers are looking in a soft market that’s moving in their favor, and this is true even of the least-expensive homes. Lower prices, high inventory, and price cuts offer lots of chances to score a deal.
Even neighborhoods that did not make this list can offer great value. In the first quarter of 2019, 1 in 5 homes in New York City received a price cut while listed on StreetEasy. In Manhattan, fully 25 percent of homes got a price cut in the first quarter. Factoring in these discounts — and leveraging them in negotiations — will expand the range of homes affordable on any budget.
Midtown East & Upper East Side Apartments Under $500K Article continues below
When Buying, Think Long Term
A question many residents ask is, should I buy? And the fact that there are affordable homes does not mean buying is right for everyone.
The upfront costs of purchasing a home in New York City are high enough that it takes six to eight years of living in a place for owning to make more sense than renting. Most buyers in NYC do stay in their homes long-term: 71 percent of homeowners live in the first place they ever purchased, and they stay in their purchased homes for a median of 18 years.
If you are looking to buy, consider whether the home you can afford will be roomy enough to accommodate your future plans and desires, and whether you’ll be happy dwelling in its neighborhood for the better part of a decade.
Whether or not to buy a home is always a personal decision, one that takes a lot of research and careful planning. But right now, buyers in New York definitely have the market dynamics working in their favor — and at least 10 neighborhoods where there are plenty of homes within reach on a median first-time buyer’s income.
How We Did It
We analyzed the number of homes affordable to New Yorkers ages 25 to 44 who made the median gross household income of $70,406, as found by the U.S. Census’ 2017 American Community Survey. We assumed a mortgage rate of 4.06 percent, the average rate of a 30-year fixed-rate mortgage as of the end of the first quarter of 2019, and used taxes and maintenance costs from StreetEasy listings data. A home fell in the affordable range when its monthly total payment did not exceed 40 percent of the monthly gross household income. Monthly total payment here includes the maintenance or common charges, taxes, and mortgage payment. Monthly mortgage payment is calculated as the remainder of the price of the home after a 20 percent down payment, amortized over a term of 30 years at the monthly mortgage rate.
[This post has been updated and republished.]
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