Middle Class in NYC

Well, lots of us have wondered the same thing.
I'm middle class and we live in Queens. Great neighborhood, convenient, et cetera. I think middle class typically, but not always finds it difficult to live in Manhattan.

$500,000 per year.

That has been the great shame of this housing bubble...we constantly hear about making houses more affordable and yet every policy is put in place to prop up housing prices and incentivize speculation. NYC is the worst offender, the truth is, the middle class cannot live in Manhattan. This is changing, but it will be a multi-year process

Often wondered the same myself. I'm married we are both working professionals in non-finance fields. We do well and live comfortably in our condo we purchased before the boom. However, we don't have kids yet and that would really change the economics of things. I'd say 1 bed or small 2 bed for a couple/no kids or just a baby and $200k HHI, 2 bed or 3 bed (if you can afford it) for family of 4 and $500k HHI. Sounds outrageous but that's my feel on how much it would cost to support a classic middle class lifestyle in the city. I'm assuming private schools depending on where you end up living and one nice vacation a year. If we have kids, we will likely move to Brooklyn where the economics are better for us.

$500,000 per year is MIDDLE CLASS in NYC? So sad!

a friend told me the other day that after traveling to every continent he saw the same pattern in almost every city. the young middle class barely making it by. why is that so? too many people chose city versus rural/suburbs bidding up prices?

Don't listen to Wonderbra, he's a troll!

As a New Yorker, you might consider yourself middle class, but to the 'average american' you are rich.

A dollar goes a hell of a lot farther in Duluth Minnesota than it does in NYC...

"A dollar goes a hell of a lot farther in Duluth Minnesota than it does in NYC..."

yep, hopefully by 2012 the latest we are out. :-) don't want to be caught up paying unfunded pensions and the like in an already expensive place with already high taxes. doesn't make financial sense.

i dont think a family of four could live comfortably in Manhattan (classic six apartment, private schools a vacation or two, and a few other luxuries) for less than $500,000. That includes housing costs. I think $600,000 to $700,000 is closer to reality. Thats on a run rate basis. Of course lots of families with earners in former lucrative finance jobs now are struggling like crazy to make it work, but they will ultimately be forced to leave

by the same token, those of us that leave will cooperate towards making it more affordable (although the deficits due to unfunded pensions will stay the same and will have to be paid by a smaller tax base..., still housing for ex, should end up being cheaper if a relevant quantity of people move out).

Capitalist theory dictates that a family of four living on $600-700K will quickly spend up to that level on "necessities", and feel that a middle class family like themselves must need %750-900K to live in NY.

Okeh, so it's commie theory, but facts is facts.

lol, incomes only go up, just like houses

this is why they call it a bubble... its just not sustainable.

Middle class to me means certainly no private school. One can find a basic 1200 sq ft 2-3 bed room apt on the UES for $1mm (no marble bath, high ceilings, fancy views, no designer furniture, Hermes bags, and high-end designer clothing as we are talking middle class). I think that is affordable at $250-300K household income for a family of 4.

5 years ago, I said $200k, so that sounds about right to me.

Agree, middle class does not say private school. Thats not middle for america, and not even middle for NYC.

I guess that my wife and I will just be considering ourselves lower-class for the rest of our lives, while living in Manhattan. I think that an excellent way to save $$ would be to not send your kids to private school, and then to not send them to an overly expensive college.

The OP is asking about middle class definition in NYC, not in the Midwest. I think we also need to take into account when responding that many people working in the City wouldn't have the same employment opportunities in other, cheaper areas of the country. I include myself in that group.

This mantra is repeated often as if it reflects some sea change. It does reflect the general improvement of the housing stock in Manhattan, so there are less run down, inexpensive apartments on LES, East Village, west Chelsea, etc. that a family can pack itself into if it so desired. But the middle class has fled manhattan for generations in search of more space for less money, opportunities for children, etc., even back when people were content with far less space and the quality of little Johnnie's education was not the primary fixation of parenthood. The "middle class" have never (or, at least, not for decades) lived "comfortably" in Manhattan, owned or rented classic six apartments, or sent their kids to private school (in Manhattan or anywhere else). Sure, rent controls and rent stabilization enabled some to live large beyond their means, but those were few and far between.

My father was a prototypical "middle class" civil servant. We lived in Hells Kitchen in the 1960s when it still was hell, five of us in a fourth floor two bedroom walkup. In 1971, we moved to a "spacious" 1500 sq foot three bedroom house in the outer boroughs. My father's brothers (also all civil servants) lived in apartments in the Bronx, and moved to Rockland county in the mid-1970s. This has been "middle class" living in NYC for decades. At least in terms of families, Manhattan has catered to poor families in public housing and public schools and rich families in the housing of their choice and private schools for a long time.

A person living in Manhattan needs to earn $123,322 a year to be considered middle class.

Source: Study by Center for an Urban Future. http://www.nycfuture.org/images_pdfs/pdfs/CityOfAspiration.pdf

nyc_sport, but the difference is that people who would have been considered upper middle class 10 years ago would have been able to afford the classic six and the private school education. if you hadn't bought previously, in the last 8 or so years it had become increasingly difficult for many who had been considered quite well off in the past.

> The OP is asking about middle class definition in NYC, not in the Midwest.

And, in both cases, the definition doesn't include private school. What is confusing about that?

"The "middle class" have never (or, at least, not for decades) lived "comfortably" in Manhattan, owned or rented classic six apartments, or sent their kids to private school (in Manhattan or anywhere else)."

Bingo.

There was an article in the NYT saying that someone making $50,000 in Houston, TX was enjoying the same living standard as someone making $123.000 in NY. $123.000 seems to be what it takes to be Middle class in NY.
I find that number outrageously high to be classified as middle class.

""The "middle class" have never (or, at least, not for decades) lived "comfortably" in Manhattan, owned or rented classic six apartments, or sent their kids to private school (in Manhattan or anywhere else)."

Bingo."

WRONG!!! That's the view from Brooqueens. Ask thousands of kids who grew up on the Upper West Side (and other neighborhoods) at that time, went to public school, etc. There was a very solid middle class in nice roomy apartments.

sledgehammer: "enjoying" is a poor choice of word.

at what time? 1776?

1) What makes them the middle? Thousands went to Dalton, are they the middle, too?

2) The part I was responding to was the public school part... which you seem to agree with, no?

3) BTW, I grew up with tons of kids from the UWS who went to public school with me, I don't remember any in classic sixes. I remember quite a few sharing bedrooms with siblings, though.

"nice roomy"... maybe you're going back a little too long.

try the 1960's. the west side was extremely affordable although viewed with great suspicion by east siders.

Sorry Alan, English is not my native tongue, but i hear what you're saying. Before 2000, there was a strong middle class in NY that totally disappeared ever since. The Highest the % of your income you put in housing , the least money you're left with to enjoy everyday's life and prepare your retirement. Unfortunately because of bubble prices, people who make $100K a year don't have much left at the end of the year. It's a shame, because $100K is a quiet a lot of money.

"try the 1960's. the west side was extremely affordable although viewed with great suspicion by east siders."

We just moved from decades to a half century. If we go back to the egyptians, I'm sure you'll be able to make a great case.

forgive me for my lack of precision...the west side certainly remained affordable well into the mid 90's and late 90's if you count rsd and wea above 96th st.

can I include the west side of the bronx, too?

Especially if we're going back to the 90s, I think its pretty clear folks are talking about S of 96th.

"Unfortunately because of bubble prices, people who make $100K a year don't have much left at the end of the year. It's a shame, because $100K is a quiet a lot of money."

most of those in that earning bracket rent or bought 8-10 years ago, don't they?

nyc10022, I can nearly guarantee you that most of the UWS kids you went to school with lived in Classic Sixes. Their ridiculous layouts often necessitated the bedroom-sharing. They are, after all, two bedrooms plus a barely-usable maid's room. But nice and roomy nonetheless.

Sledgehammer, I assumed "enjoying" was the NYT's word choice, and I was just commenting on how unlikely it is that the imaginary family could actually enjoy Houston.

CC is right about the timing and geography of UWS affordability, and of the view from the East.

imho somebody that cannot save for retirement & college shouldn't be considered middle class, whether they send their kids to private or public school.

300 Mercer...Do you really think a family of 4 in Manhattan can afford a $1 MM home with $250,000 in income. How much is that for a monthly take home after 401K / health care and taxes in NYC. $10,000, maybe $12,000. AFter 20% down, you are left with an $800,000 mortgage, that is $4,500 per month at 5.5%. Add to that at least $1,500 in maintenance, probably more as 3 bedrooms on the UES are only priced at $1 MM today if the maintenance is high. You are already at 50% to 60% of take home for living expenses. I certainly believe a family making $250,000 (the arbitrary cutoff of the wealthy, at least according to all new tax proposals) should be able to live a middle class lifestyle in Manhattan, and I believe prices are heading in that direction. But they are not there yet IMO

dcorreale, I would argue that incomes will go down with housing as unemployment rises. If income falls at a faster rate than housing, it becomes even more difficult to buy a place and further out of reach for the "middle class"

add to that at least $2k/month in college savings ($10k for 529 and $2k for ESA)... you are have left after basic savings and house $2-$4k/month. you can make it, sure, but the point is that it's not going to look like the lifestyle somebody earning $250k/year thinks he's entitle to.

"nyc10022, I can nearly guarantee you that most of the UWS kids you went to school with lived in Classic Sixes. Their ridiculous layouts often necessitated the bedroom-sharing. They are, after all, two bedrooms plus a barely-usable maid's room. But nice and roomy nonetheless."

Nope, no maid's rooms, not roomy, not classic sixes. If it had a formal dining room, it would have been used as another bedroom... but they didn't have 'em.

> CC is right about the timing and geography of UWS affordability, and of the view from the East.

Yes, we all know what happened when Sean and Madonna crossed the park. For folks who don't know the history, check out the movie "Metropolitan" from the guy who directed "Barcelona".. Does a good east v. west mindset.

> Do you really think a family of 4 in Manhattan can afford a $1 MM home with $250,000 in income

The old standby ratio was 3 to 1. 4 to 1 I don't think is crazy given you're supposed to spend a ton in this town.

Nervousbuyer, this is possible, I know this first hand in finance and media, two of the larger industries in NYC. But ultimately, it is unsustainable to have only the super rich in Manhattan, so housing has to eventually catch up, but as proven in all cycles, it lags considerably

"WRONG!!! That's the view from Brooqueens. Ask thousands of kids who grew up on the Upper West Side (and other neighborhoods) at that time, went to public school, etc. There was a very solid middle class in nice roomy apartments."

Yeah, living on rent control/ renta stabilization on someone elses' dime. But paying market prices? I think not. I went to PS6 so I know a thing or two about middle class families and large apts. and the two never mixed.

"Metropolitan" is truly excellent.

As somone who spent most of my childhood in Manhattan, the idea that there used to be middle class families lviing comfortably in Manhattan is a myth. I grew up in co-op village and we had a ton of middle class people, but they didn't exactly pay market prices for their apts. When I went to a private school, almost everyone who was middle class lived in the outer boroughs or non-prime Manhattan. A few lived in prime Manhattan, but they were certainly not middle class. I remember I had one classmate whose parents would regularly travel to exotic destination,s like safaris in Africa. That's not exactly a middle class vacation.

"Yeah, living on rent control/ renta stabilization on someone elses' dime. But paying market prices? I think not. I went to PS6 so I know a thing or two about middle class families and large apts. and the two never mixed."

It's funny, I heard from a woman a generation older than me that PS6 was a really crappy school in her day, but I didn't believe her until now.

Until the entire 1970s, and well through the 1980s, living in a Classic Six on the UWS almost necessarily meant living in RC/RS apartments. The coop boom really only hit in the 1980s. You couldn't pay market prices if you wanted to, except a few buildings on CPW.

Alpine, until going market rate (and to a great extent after as well) Co-op Village was lower-middle class at best, and (by your own estimate) hardly counts as Manhattan.

How did you scam a PS6 invitation from the Grand Street projects?

most of the west side was affordable to middle class families until the mid 80's. and that includes plenty above 96th ST. interestingly columbus ave and 88th street used to be rougher than west end and rsd in the 100's. and there were druggies and prostitues on broadway throughout the 80's in the 70's and 80's...go back further to panic in needle park...middle class lived reasonably well throughout these neighborhoods...families making 100k in 2009 dollars..kids at stuy parochial and public schools..dad a prof..mom an artist..or whatever..thay are all gone...it has made the city a less good place...lotta soul comes from the not rich

86th St. was a police precinct boundary -- drugs below, prostitutes above. A nice cop once nicely asked us to cross to the south side of 86th to continue smoking our nice pot. Which, probably not coincidentally, would have also meant not smoking on church steps. Nice cops are very sensitive about such things.

I remember 14th street in the late 90s, when cops would push drunks/bodies to the other side of 14th so it wasn't their precinct.

you make excellent point re: rc, rs apartments being the norm not the exception. everyone here is so busy trashing that system; meanwhile there is no doubt that the co-oping and phase out of RS directly led to less middle class people in manhattan.

If middle-class people hadn't had the RC/RS-fueled incentive to stay in parts of Manhattan like the UWS, it would have become like most of Chitroit -- totally gutted.

My own grandmother (in Queens) would beg my mother weekly to move us from the UWS to Lawn Goylin, but between loving the UWS and the affordability of rent-regulation, she wasn't budging. Which is good, because NY Post "Teens Kill Mom Then Selves" headlines get tiresome after too many.

"add to that at least $2k/month in college savings ($10k for 529 and $2k for ESA)... you are have left after basic savings and house $2-$4k/month."

and add to that $1000 a month for a car and $2800 a month for childcare. That leaves you with $200 a month for food for that family of four in the $million apt.

And add two footmen at $6,000 a month. That leaves you buying steak and shrimp with foodstamps on another thread.

Owning a car in Manhattan is a luxury, not middle class living.

A car in Manhattan is a nuisance, not a luxury. Parking tickets, garages, dents, getting your mirror taken off, etc... lots of fun!

you're a nuisance.

so...how did you get into ps 6?

alanhart, yout thoughts on the classic 6 layout are interesting. we purchased a classic six because it is one of the few layouts that hold a family well. and given that they're generally over 100 years old they are well built in terms of containing sound. have you had an infant or toddler in the city? if so, i'd imagine you'd know a classic 6,7, or 8 is an ideal layout to raise a family in. what are your alternatives? a loft? then you'd have to cut it up into rooms as the children grew which would damage the integrity of the concept. new construction? try it and see how long before you have nasty notes and board complaints fromy oru beighbors when they child cries or runs. a townhouse would work but there are so few avail. and they are enormously expensive. as far as bedroom sharing you couldn't be more wrong. classic 6s were built FOR families that were generally larger than the average NYC family.

ignore typos please--child ON lap as i type.

A car (driven or driving) is the only civilized way to travel from point A to point B. Only rats belong underground.

Only poor people talk about tickets and parking.

wonderbitch. every time i read another one of you elitist posts i always have this urge to cyber-slap the shit out of you.

e: most were built in the 20's...not 100 years yet.

is that so? mine was built in 1908. but i am way north.

This thread reminds me of Sherman McCoy's rat-race ruminations in "Bonfire of the Vanities" - a driver for my car would cost him XXXX more than just having the car, if only he could afford a REAL prestige address, Fifth instead of Park, etc.

eliz181144, I'm not sure what you mean about the layout of a Classic Six, but my best guess is that it was designed as a transitional apartment for a childless couple that entertains.

When not chopped up, the layouts usually tell a story: Guest arrives, the maid pops out of the pantry/kitchen through this little door, leads them past the coat closet through these French doors to the LR, unless they're late in which case there's an elegant multilight single door at the end of the entrance gallery directly in to the DR. After drinks in the DR, they pass through a grander set of French doors into the DR. And of course there's a swinging door for the maid between the DR and the pantry/kitchen.

Think about it -- one bedroom is for the maid. One is for the parents. That leaves one bedroom. Nobody then had only one child once they started having children. My guess is that the second bedroom was designed as a guest room. Certainly not for the first child -- a nurse would need quick access, and that ain't gonna happen when the maid's room is at the far end of the apartment. Once the family started having more kids, there were larger apartments -- Classic 7s if you wanted to put the boys in one room, the girls in another (surely you don't think they had co-ed kids' rooms then?), and have no guest room. Classic 8s solve that. But 12, 15, up to 25-room apartments existed. Not to mention townhouses. And soon thereafter the burbs. I'm not saying that any of these were built for the middle-class of the day -- that would probably be even harder to define for that time than it is now, but the tenements on Amsterdam and Columbus probably housed the lower end of that (tenement not being a synonym for slum, as it's often used now).

As for better alternatives to Classic Sixes today, you're right -- there are very few. It's just too bad the spaces aren't made for today's "story", not as described above.

Those 1908 ones were often chopped to pieces during the Depression, by the way.

michaelkyleh, wondergasbag's posts are hardly elitist. Quite the opposite, in fact. It's sad.

OF course after reading these posts, I need to amend my post. I was talking about the upper middle, clearly not the middle class

"Often wondered the same myself. I'm married we are both working professionals in non-finance fields. We do well and live comfortably in our condo we purchased before the boom. However, we don't have kids yet and that would really change the economics of things. I'd say 1 bed or small 2 bed for a couple/no kids or just a baby and $200k HHI, 2 bed or 3 bed (if you can afford it) for family of 4 and $500k HHI. Sounds outrageous but that's my feel on how much it would cost to support a classic middle class lifestyle in the city. I'm assuming private schools depending on where you end up living and one nice vacation a year. If we have kids, we will likely move to Brooklyn where the economics are better for us. "

This is why with the correction in the finance industry that apartment prices will need to go much lower...In order to be affordable to people who work in industries where people don't make $500k three or four years out of graduate school. Also considering the fact that finance may no longer be that kind of industry either.

"i dont think a family of four could live comfortably in Manhattan (classic six apartment, private schools a vacation or two, and a few other luxuries) for less than $500,000. That includes housing costs. I think $600,000 to $700,000 is closer to reality."

You need $500k, but you don't feel comfortable budgetting $500k unless you make $600-700k. This is the truth.

"I think that is affordable at $250-300K household income for a family of 4."

This is dead wrong. My wife, baby and I go through $15k a month easy. That $180k is $300k pre-tax. Our baby costs next to nothing. Our rent is $5,000. Maybe we could cut that but I don't care to right now. Even without private school this figure is light. We don't have a car either. I love the city but the standards people cut to rather than move to a decent burb make no sense to me.

People earning much less than $500k could live here in the 1990s, never mind the 1960s or 1970s. Its a lot different when a classic six would cost $600k than when it cost $2mm. Huge overhead. Its a joke now.

Rhino, out of curiosity, you say you only pay 5k on rent yet go through 15k a month, easy.
What are your other big main expenditures, and how do they break out?
Im assuming you have no second home.
With two slightly older children in private schools what do you think your monthly needs would be?

How do you spend 15k per month easy if your rent is only 5k per month, and you don't even own a car? So are you guys/gals saying that living in a 2bed/2bath or a bigger place is considered middle class? If you can afford living in a place that size, I dont think you are middle class even in NYC. I would agree that you would need around 6-8k just to pay for the mortgage and other expensive from owning, and a living expense of another 6-8k per month. So I would agree that you would need at least 300k per annum pretax just to break even without any saving for retirement. I would be quite nervous if I were in that scenario.

Why are you even talking about private schools? NYC has perhaps one or three great ones, a few good ones, and lots of totally mediocre. Why not assume that you're smart enough to navigate the public school system, and that your child will be smart enough to get in to one that's a good fit? To me, budgeting for private school is like budgeting your child's future criminal attorney costs. Have more faith.

The Rhino family goes through $180K per year in living expenses, without a car? This isn't middle class. These are snobs.

This is really personal... Let me think. I have a budget somewhere. Well put it this way. Individuals who make $150k and pay $2700 in rent have a pretty easy time going through their money, no? Add a baby...and add the fact that one $300k income is taxed more heavily than two $150k income... I guess we each go through about $300 a week in petty cash, so thats $2500 a month. Two gym memberships, two cell phones, obnoxiously expensive cable bill... A lot of 92Y classes for the baby. I spend a few hundred a month on books. One wedding or another costs a couple thousand every few months. One nice trip amortized. A number of trips to the Cape are $500-1000 each time. My credit card bill which carries dinners out and some of the afforementioned expenses seems to be $3000/mo consistently. And now that I think about it, we budget $15000 conceptually, but it comes in $13-14k a month many time.

I dont think private school makes sense to me. If I am a finance professional with a $150k or $200k bonus and a healthy housing payment, I dont see how I justify $80k in aftertax tuition bills. My friends and I have had this discussion. I agree with the $500k pretax figure. And if my base is $200k, I don't see living that lifestyle unless I am consistently earning $600-700k. I'm really not sure if you pinned me to the private school. At current marginal rates, that $80k you are talking about nearly $150k of pretax income to cover it. So start from $450k vs our current $300k and build from there.

There are so many people in the financial industry that got clobbered in compensation last year. Plenty of wealth have been evaporated from this economy through RE,equity investment, scandals like madoff and others. How is the current downturn impacting comps in other fields? Last year comp have been slashed by half for most. This year so far looks good but who knows what will happen during payout time. On BBG, they have listed how much the GS and etc have stashed away for on a per employee basis. The median is much much lower.

For the record here, I am not saying how we live is middle class at all. Not for Manhattan, not for anywhere. My intention for now is to navigate the public school system through 5th grade and play it by ear from there (or perhaps sooner). I am not a snob. And I think you would be surprised how we live and what we spend and how quickly we get there. Two people living seperately and making $125k a piece and paying $2500 in rent can easily spend that money. That is all we do collectively, with a baby.

I say $125k a piece to make a rough guess that $125 x 2 filing as single is = $300k filing jointly.

GlobalOption - how much do you go through per month?

I am a little surprised that people are debating that $150k pre-tax per person plus an infant is tough to imagine. I'll be honest. I marvel at the fact that we go through it. I have no intentions for private schools or even staying here past 5th grade (assumes PS 6), unless the new world of finance affords me the $600-700k. I just don't think the $500k lifestyle here is preferable to the $500k lifestyle in CT say. To each their own. Its not being a snob, its just what one likes and what one is willing to pay for it. My wife tries to defend the position that a $250k income budget is doable with a family of four down here. I call bullshit on it all the time. We could trade down in neighborhood to make room for the second kid. The fact that there are no big identifiable expenses to cut other than rent tells me its not what I would want to do. And when I talk budget, I am saying budget, not income. To budget $500k, especially in finance, you'd want to be making more...both to smooth it out and to contribute to savings consistently.

Alan, I think we're agreeing for the most part in that unless you're very wealthy there are few apartments that house a family well. And I agree most classic 6,7,8, in my area at least, were chopped up. We had to do an extensive reno. But, if you're asking we have our own bedroom. The kids both have their own bedroom bedroom. What I like about the maids room is that it allows my older child/us privacy, a second bathroom, and we still have a dedicated living/dining room and an extra room for the computer and toys. But to stay on topic, I agree for middle-upper middle class living in nyc is a struggle and a matter of what you're going to give on. There are times we wonder if living uptown was a bad move until we go downtown and see our friends living with children in 800 sq. ft. and, much worse, fretting over their enormous mortgage. But then I'm sure they come uptown and wonder how we do it. And not to reveal too much I would say no household is making less than $250k.

Rhino, Dont listen to Global, he doesnt understand how expensive it is to live in NYC and to have kids. It is somewhat easy to blow pass 15k per month. If you spend a little more here and there. It all adds up. When I open my credit card bill, sometime I am astound to see how much i had spent in a month, and I didn't even do that much either. By no means, we are in the middle class when compared to the rest of the world or even NYC. That said, making 500-700k per year and assume that you can save half of that, you will be pretty well off by retirement (20+yrs).

alanhart...I didn't grow up on the UWS like you and we didn't have Classic anythings downtown (perhaps at 299 West 12th or the other Bing & Bings but I have never set foot in those buildings, my house was one of the few with an elevator in my social circle aside from those kids who lived in city projects or Mitchell Lama housing) but it seems to me I remember that people with those larger apartments generally had two same sex children share a room and the "maids room" was used for guests. If the two kids were of opposite sex they shared the room until age 8 or so and the family moved, usually to the outer boroughs or burbs, The presence of three bedroom apartments is one of the things that made Stuvesant Town/PVC and Mitchell Lama so popular with families...they were long the bastions of middle class life in Manhattan.

Dual income of $300K, rent is $3,100, we have the luxury of indoor parking for another $400 per month, no kids, at the end of the year, after taxes, we save $35,000. We're middle class in Manhattan, and we're having a very hard time justyfying a $1.25 -$1.35M 2 Bed/2Bath w/ $2K in maintenance. Is Manhattan unaffordable for us to buy, yes, to rent, no it's pretty easy, no worries about $ when renting, but very nervous about a $7K to $8K nut for a condo, as we would then save $0 and our savings plan would be the appreciation of said condo and the forced savings of paying down the mortgage. It only feels like Manhattan would have been affordable had we bought in 1999-2002. I think the 2.5 to 3x multiple for your purchase price vs. your gross is still a valid formula, but it doesn't fly in Manhattan.

The issue is finance and the small base. I wasn't listening to global. A few people here seem to want to moralize a little. Yes, if you make $700k and live off a $400-500k pre-tax scaled budget in Manhattan with a family four you are very fine at retirement. Frankly, I'd rather just move out when we have our second child..retire earlier...make grade school and high school less of an effing drama and save for college like normal people. However, for now, we enjoy it...and its not like swapping a 2 bed/2 bath for a house and two cars with a pre-school kid really captures the economies of the suburbs.

Talisman you are why prices in Manhattan need to come down. In the purchase market, everything you would have liked had been bid up by finance people who make $500-600k. That said, I think your $1.2mm is a dated figure. Its $900k now depending exactly where you are talking about. I think prices need to come down to where a dual income $300k family would find staying here attractive. And thats not a 2 bed / 2 bath...thats a six or a true three bed. 1990s style. When "normal" people could actually stay here.

There are couples who live down the hall from us, in chopped up one beds for $3200 or $3500 with two kids and a dog. Thats the type of shit I dont understand. Some people are addicted to the idea of living down here. There are other pleasant places to live.

Private school is not a necessity in New York. There are many great public schools and many more that are getting better. I don't have kids but if I did I don't think I would want to start paying college tuition in kindergarten. I'd rather pay a little more in rent/mortgage to live in good school district and have my kid educated among hopefully, a more ethnically and economically diverse group of students.

That's well and good, and I agree, but what happens after fifth grade...espcially if you own and the apartment is not trading above your cost basis? Paying college tuition in grade school is absurd...unless you have so much you can't justify not paying it.

Rhino, I'm going a little piggish here, if it's not more than 1,200 square feet, I don't consider it a true bedroom, in fact, I'm not particulary interested in a 2 Bed that less than 1425 square feet. So, that being said, I think the $1.25 -$1.35 is pretty valid range. Neither me or the wife are "finance guys" so I think we can wear the mantle of real middle class Manhattanites, as a Xmas bonus equal to our base isn't coming down the pike.

Are you talking about Manhattan? 1200 is a good size two bed. And 1425 is rare not to be a cut up in some other fashion. A 1200 two bed is no longer $1.25mm. Our apartment is 1200 or so. They just sold one around the corner of same size but much better finished for $1.1mm...and this is PS 6 Carnegie Hill.

About a half dozen years ago i was sitting with a number of US expats in the Dominican Republic 9these are guys who said FU to teh US and haven't been back in 20 to 30 years since retiring early down there. Safe to say a number of firemen, policemen, etc). We were talking about "the rich" and someone noted that there were a bunch of rich people in the DR. My comment back is that what makes the difference between a Third World Country and a First World Country is not the percentage of "rich" people, which is always going to be the top 1 to 3 percent. What makes the difference isn't the poor people, either. What makes the difference is the Middle Class. At that time, Middle Class in the DR meant you had 3 walls and a roof and a concrete floor.

But in this country, the percentage of middle Class is shrinking rapidly, with more of the wealth going to the top 1% almost every year, and more people slipping from lower middle class to below the poverty line every day.

So, what defines Middle Class in Manhattan? "Someone who bought or signed a RC/RS Lease before 1995". In other words, there is no definition because there is no more opportunity (currently) for the Middle Class in Manhattan.

One thing I did note a few months back to a number of friends: I remember growing up, doctors and dentists were always thought of as Upper Middle Class. These (and other "professionals") have been "crowded out" - to use an economic expression - by people in finance, dot commers, etc. over the past 15 to 20 years. But if Wall Street actually makes that large sucking sound job wise for an extended period of time, one thing you have to ask is "who are the buyers of apartments in Manhattan?". Well, whatever the answer is, the prices they will pay are certainly going to be "what they can afford". So, you have to wonder if the food chain changes substantially, and doctors, non-"Big Law" attorneys, etc. become the group who makes up the pool of buyers of units, when preices will HAVE to adjust to is what the group of people who are buying can/will pay.

lizyank, not much available for public school once the kid hits middle school. only a couple of the top programs take kids for those grades (hunter and lab come to mind, and hunter is crazy hard for admission to middle school). and many of the options are simply horrible. elementary school education has improved, and high school can be quite good (although limited supply there also) but middle schools generally suck, big time.

Salk, near PCV, is another great public MS. There are others, too, once you start digging around.

AH, i'd never send my kid to salk. there are a couple, but really, not many and the competition is fierce.

"But if Wall Street actually makes that large sucking sound job wise for an extended period of time, one thing you have to ask is "who are the buyers of apartments in Manhattan?". Well, whatever the answer is, the prices they will pay are certainly going to be "what they can afford". So, you have to wonder if the food chain changes substantially, and doctors, non-"Big Law" attorneys, etc. become the group who makes up the pool of buyers of units, when preices will HAVE to adjust to is what the group of people who are buying can/will pay. "

There will always be sellers and new construction. Even if Wall Street doesn't "suck" its just not going to create enough down payments at these prices. What do 1990s style affordability ratios say about prices? Scaled down Wall Street is basically 1990s Wall Street. Don't we basically need a market of decent $500k two beds and $300k one beds...$800k-$1mm family apartments?

Rhino: think you hit it on the nose. Until two non-finance professionals making 300-500k combined income can afford a family-size apartment to raise two children (thinking 1mm classic six in better neighborhoods), this city continues to have less "soul" than it should and could.

AR, Salk, please elaborate.

LOL at this thread. What constitutes the middle class in Manhattan/NYC and how it can feel tight to survive on 500k gross has been a daily, if not hourly hot-button topic on urbanbaby.com since 2001 (and now youbemom.com).

It's easy to spend money like water in the tristate area and other parts of the States. It's not so much a city vs. suburb thing as the sheer amount of consumerism. Putting rent and housing costs aside, how many of us have personal iphones/bberries, $$$ cable packages, walk out of the door and buy an iced coffee. Heck, I even see the doormen/handymen/porters of the buildings nearby drop $5 on lunch at the deli.

Not casting stones here, I just spent $150 on more crap (most of it made in the U.S.) at Target today.

Rhino: it's easy to blow 300k gross without feeling like you have anything to show for it. Because I'm a tightwad and occasionally feel guilty about spending this much money, I have "no spend" weeks. Sure, it's a little artificial because obviously I still have to pay utilities and mortgage but I make a conscientious effort
to not even buy outside coffee, no cabs, cook from the pantry/fridge.