Real Estate New York – If you’re looking to buy real estate in New York City, whether as a homebuyer or investor, it is important to understand the tax system, real estate market, and know all ins and outs of the city. New York City’s real estate is aggressive. To counter this, we have prepared an easy-to-understand simple guide for buying real estate in New York. We explain how to save money, what to look for in real estate agents, and more. Follow us on this tour through the top tips for buying New York real estate.
Buying New York Real Estate – Guide and How-To
If you want to buy real estate in New York, you’ll have to get informed. There’s many details and intricacies to be aware of and things to pay attention to. We will answer all your questions: What is the property tax like? Is New York property tax higher than elsewhere? Which New York neighborhoods are best? When should I invest in New York real estate? We answer all questions in this guide for buying real estate. Before we go on about the city though, let us take you through an important question. Which type of real estate do you want to buy?
If you already know in more detail what you’re looking for, go ahead and skip to one of the main articles! (opens in a new tab)
Buying a House – Full Explanation, Guide
If you want to buy a house, our article on the topic is where to look. Our full guide takes you through all steps of the process from beginning to end, starting even before you decide to buy a house, and finishing after you close the deal. If you want to invest in a owning a home, this guide on buying a house is everything you need:
Buying an Apartment – Full Explanation, Guide
If you’d rather buy an apartment, we have you covered. Buying an apartment can be a long and arduous process, especially in a mega-metropolis like New York City. Many people neglect even the thought that apartments can be bought as opposed to rented. This article should convince you otherwise. There is sufficient reason to believe that a significant proportion of people who are currently renting their apartment, could easily buy that same property. Our guide, taking you from A to Z, will no doubt teach everything you need from this top guide. If you are even thinking about buying an apartment, this guide will bring you a step closer to your dream. This is your one stop for everything you need to know:
Buying Real Estate in New York – Unique Costs
To buy real estate in New York is of course different than elsewhere. Let us explain the details which New York real estate carries with it, and what makes it different from other cities’ real estate markets. New York is a thriving metropolis of millions of people and a GDP larger than that of most countries. The real estate market, like most other markets in the city is booming, and there’s good reason to invest now. The only other market that would be similarly difficult is if you want to buy real estate in L.A., but honestly, there’s enough celebrities in the Big Apple.
- GDP: $1,57 trillion
- Pop.: 8,4 mil.
Taxes – Property Taxes, Real Estate Taxes + More
New York property taxes are very different than the general US property tax system. The state of New York changes the tax rates from year to year, depending on the needs of the state. Additionally, it is also complicated by the fact that tax rates are constructed in millage rates as opposed to tax rates. Property tax calculation is therefore more complicated than you’d like, but let us try to explain.
What are Millage Rates? New York Property Taxes Explanation
Mill Rates are Tax Rates. Quite similar to conventional property tax rates, Millage rates serve the same purpose and work quite similarly to the normal percentage of property value calculation. A millage rate, is first and foremost a number, as opposed to a percentage. This number indicates the amount of property tax a property owner is required to pay for their property. A mill rate of 1 indicates 1$ of tax for $1.000 worth of property, a mill rate of 24 indicates $24 of tax per $1.000 worth of property.
- Mill Rate of indicates amount of dollars of tax per thousands of dollars worth of property
New York Property Tax Rates – Most Expensive?
It is often said that New York has incredibly high property tax rates. This is true to a certain degree, New York state, and especially the counties surrounding the city of New York have relatively high property tax rates. NY has an average property tax rate of 0.86%, and this is higher than e.g. California (0.77%). Still Florida, the other major real estate state, has a significantly higher average property tax rate of 0,94%.
Property Tax in New York Boroughs – Manhattan, Brooklyn, Queens, etc.
New York city is the real estate hotspot par excellence. Still its property tax rates are quite low compared to others in the area. New York city is made up of 5 counties (the same make up the 5 boroughs of New York), and they each have property tax rates lower than the national average.
- County of New York (Manhattan) – 0.65%
- Queens – 0.87%
- Kings County (Brooklyn) – 0.90%
- Richmond (Staten Island) – 0.91%
- Bronx – 0.97%
Want to learn more about New York Property Taxes? Reducing your property taxes? Everything you need to know in our guide on
Buying Real Estate Taxes – Transfer Tax, Mortgage Tax, More
You are required to pay 3 taxes when buying real estate. In New York, it is actually four. there is the real estate transfer tax, which in New York at the moment is a rate of $2 per $500 of property, amounting to 0,45% of the purchase price of a home. Additionally, you will pay the mortgage tax, called the mortgage recording tax in New York, which has a rate of 1,80% when your mortgage is worth less than $500.000 and when the mortgage is worth more than this, the rate is 1,93%. Then there is also the mansion tax, an additional 1% when the property is worth more than $1 mil. Lastly, you are typically required to pay property tax pro-rata when buying real estate.
- Transfer Tax: 0,45%
- Mortgage Recording tax: 1,80%-1,93%
- Mansion Tax: 1%
- Pro-Rata Property Tax: 0.65%-0.97%
Additional Costs – Real Estate Over-Budget
When hearing about the price of your new home, whether an apartment, condo, townhouse, or villa, you never think about all the possible additional costs in real estate. While some call these closing costs, this is not strictly true since, in addition to closing costs like real estate transfer taxes, title-search fees, escrow fees, realtor fees, etc., there are additional costs like mving and furnishing or renovation. L.A.’s closing costs are a little over 2% of the mortgage. I.e. of the mortgage principal (the money loaned to you) you can expect to pay an extra 2% to cover closing costs.
- Additional 2% of mortgage
For more information on additional costs that you can expect when buying a home:
New York Real Estate Market Outlook
It’s almost a cliche that New York real estate is impossible to find, and that housing is a commodity for the few and rich. This is true to some degree, the real estate market in New York is intense to say the least. Yet there is enough reason to be optimistic that one can find a property, and once that is done, all evidence seems to indicate that this property will only gain in value over time.
Are Real Estate Prices Going down in NYC? – Housing Market Trends
No. The housing prices are increasing steadily, as indicated by the Case-Shiller Index. To accurately guage the development of real estate prices, the Case-Shiller statistic published by Standard & Poor’s indicates how prices are changing. To be exact, it is a residential real estate market value trend. This index allows one to view the development of housing prices in the city. In New York, one can easily see that housing prices are increasing steadily for the past 9 years.
- Housing Prices increasing steadily for past 9 years
- Case-Shiller Index NY shows development of housing prices
How much it Costs to Buy Real Estate in New York – Average Real Estate Prices
As mentioned, NYC is expensive. You will be paying more per square foot in this city than most others in the US. As mentioned though, because these prices are increasing, this investment is one which is worth the money. So how much does real estate actually cost? In New York City, the median property costs $697.000, averaging to a price per square foot of $307. If you’re looking for a passive investment and want to rent out your property, you can exxpect a Cash on Cash return of 2,1%, with rental income being around $2.200 per month.
- Median Property Cost: $697.000
- Price per Square Foot: $307
New York Real Estate Trends: Price Development Overview
Manhattan, Brooklyn and Queens are clearly a sellers market, as agreed on by the vast majority of real estate experts. The amount of sales in real estate increased by over 20% in the past year. This demonstrates the increasing power of this real estate market. Meanwhile, to get a look at what you’ll be gaining once you have bought a property, median sales price also increased. From $275.000 to $335.000, an increase of 22%! Now, you may be thinking that homes are totally overvalued then, but this seems not to be the case, with the average real estate selling 2.6% below the price asked by the seller.
- Amount of Sales: +20%
- Median Sales Price: +22%
New York Real Estate Agents – How to find the Best Real Estate Broker
Apart from experience, there are a few important things which can make or break the quality of a real estate agent. First and foremost, you will want to find someone who will act in your best interest. This can be done with an agent who is cutthroat and willing to do what it takes in negotiating with a seller, but generally, an important attribute is that your agent is compassionate and friendly. Otherwise, it can quickly turn into a nightmare experience. You of course also want to get along on a personal level with your agent, otherwise the many conversations can become quite arduous.
Finding the Perfect Real Estate Agent – Tips
These are the three things you should keep in mind when looking for a real estate agent. If he or she is missing any of these, you quickly run the risk of a financially risky situation, or simply an uncomfortable experience. This is the 3 p’s rule. The 3 p’s are
- Personal attributes: is the agent trustworthy, approachable, diligent, etc.?
- Payment: What is the payment structure of the agent? is their goal to make you happy or to close on as many properties as possible?
- Past: Take a look at the agent’s past deals to see whether they have been successful
List: Top NYC Real Estate Agents
These are, according to our research the top real estate agents in New York. They are among the best and top selling agents, but also among those with the most favourable experience reports. Remember! Everyone has their own needs, and thus need different agents, but these have shown to have quality, care for their clients, and make good deals.
- Richard Leasure (Howard Hanna Rochester)
- John Farrell (EXIT Realty Homeward Bound)
- Alexa Lambert (Compass)
- Michael Kenduck (21st Century)
- Bryan Karp (RE/Max)
- John Lajara (RE/Max In the City)
- Geraldine Andolina (21st Century)
- Daniel Axtmann (Berkshire Hathaway)
Saving Money on Real Estate in New York – Tax Deduction Tricks, Tips, etc.
Real Estaet and real estate taxes are a domain where saving money is just around the corner. With the right moves, you can save in the thousands of dollars. You may want to leave this up to a tax attorney or your agent, but it’s best to be informed yourself about the options.
New York Real Estate Tax Deductions – Save Money on Mortgage
In New York City, you can deduct your mortgage interest from the first $750.000 you owe from your tax bill. This is a massive help to those struggling to make payments, especially considering that those paying mortgage interest will likely be in a harder financial situation as is. Another option for saving on taxes is to upgrade your home, which to make it more energy efficient. Lastly, if you want to improve the state of your house by taking out a home equity loan to pay for renovations, you can deduct the interest from this loan from your tax bill as well.
- Mortgage interest can be deducted
- Home equity loan can be deducted
- Energy-efficiency upgrades
We have a full-size guide on how to use tax breaks and deductions to your advantage:
First-Time Homebuyer Advantages
For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.
- Less taxes for first-time homeowners
Step-By-Step Guide – Buying Real Estate Process
These are the steps you will take when buying real estate in New York. They are by no means the most detailed (for details see buying apartment New York, and buying house New York), but cover the broad overview of what you should be keeping in mind when thinking about buying real estate. The process for all real estate will be similar, with differences only existing in the details.
- Save up for the Downpayment
- Find a Mortgage Broker
- Get Mortgage Preapproval
- Get your Team Together: Attorney, Real Estate Agent, etc.
- Start looking at Listings
- Go to Viewings
- Submit an Offer