The Top Homeownership Myths I Hear as a Real Estate Agent in NYC

Do you think it's too expensive to live in New York City? Yes, New York is incredibly expensive, but it's also arguably the greatest city in the world. There are very creative and affordable paths to homeownership here.

I was recently out and about in the city, viewing apartments with two rental clients. These ladies fit my typical client profile: young, educated, working professionals — generally upwardly mobile and soon to be in the market for a starter home. During our conversation, one casually mentioned, "I don't think homeownership would ever be possible for me in the city."
Her statement stopped me in my tracks, yet, I can't tell you how many times I’ve heard this line over and over again!
As an agent, part of my philosophy is that anyone can own a home with the right coaching, resources, and support. Here, I want to take some time to address some of the top homeownership myths that I’ve encountered.
Myth #1 New York is too expensive
Yes, New York is incredibly expensive, but it is also arguably the greatest city in the world. And believe it or not, there are very creative and affordable paths to homeownership here.
Two things to consider when thinking about buying a property in New York are HDFC Co-ops and the location.
There are affordable HDFC co-ops all over the city I.e. Chelsea, Williamsburg, Upper East side, etc. These are very similar to rent-stabilized apartments, as many have income restrictions that make Co-ops a more affordable option for middle-class and working-class New Yorkers. Ask your buyer's agent to curate some options for you or set up search alerts on websites such as Compass or Streeteasy.
The second tip is be creative about the location. New York City is a HUGE city. If you're only looking in popular areas, it can definitely be more challenging to find something affordable. If I were to buy in New York on a budget, I would be looking in places like Inwood, Crown Heights, or Jackson Heights. They are growing, close to transportation, and it's just more affordable in general — for now.
Myth #2 Incredibly High Upfront Costs/Downpayment
Yes, thinking about the amount of cash needed to purchase a home can be overwhelming. The thing is, when you decide that you want to buy a home, you must also plan accordingly. That means you need to start thinking very seriously about your savings strategy. By developing an effective savings plan, you'll have the road map you'll need to make homeownership a reality.
Also keep in mind that just because you’re making a lot of money, doesn't mean that you're saving a lot of money. Lifestyle creep amongst Millennials and Gen Zer's is very real. $20 drinks and $60 brunches can really add up. It's important to start having this conversation early on if you think you might want to buy a home sooner than later. I know saving $60-$100 a week doesn't sound like that much, but if you have a goal to buy a house in three to five years, and you can save 1,000 each month, it can really add up. It's all about your intention.
When you have saved up a good amount of money and are ready to start the process, keep in mind that there are some very creative financing options out there. When it comes to a downpayment, 20% is the golden standard, but you do have options!
For example, FHA loans only require 3.5% down. For a $700,000 property, that’s $21,500. Objectively, it's a lot of money, but it's also do-able. If you think about it, $21,000 could be equivalent to your rent for half of the year (the average apartment rent in Manhattan is $4,208). If you're able to curb your lifestyle, live with a roommate, and save half of your rental budget, you'll have $21,000 in a year.
Myth #3 You are stuck in a home mortgage forever
I often hear that people are afraid of losing their flexibility when buying a home. What if I leave New York? Or what if I get laid off? These are very real fears, whether you're renting or buying! Yes, it is a complicated process, and yes you could lose your job, but what I've seen with clients over the years is that this fear isn't coming from actually committing to homeownership, it's coming from a fear of tackling the admittingly difficult process of buying a home in NYC.
But there are countless resources that can prepare you for homeownership. For example, real estate companies all over the city host free seminars to teach New Yorkers about the home buying process. They will typically provide free snacks and drinks because there are agents, bankers, and lawyers there who want your business. They are completely noncommittal. You can learn the process, pertinent risks, and concerns, ask questions, and make an informed decision if homeownership is the choice for you.
Myth # 4 Fear of making a bad investment
Another fear I hear often is that people are scared to make a bad investment. This one is tough. As an agent, I don't have a crystal ball, and I can't predict how the market will behave (who would have guessed a wolrd wide pandemic, besides Bill?).
But if you own stocks, as most working professionals do in the form of 401ks or brokerage portfolio, you are already familiar with the basics of investment - buy and hold. Buying real estate is a long term commitment and one that rewards you handsomely over time -- the average length Americans hold on to their homes is 10 years. But just like picking a stock or index, you can also pick the wrong stock/property. Use good judgement and look for properties in neighborhoods you are familiar with, has good access to transportation, facilities, and never over stretch your budget!
While it is helpful and important that you, as a potential buyer, understand the basics of investment returns on a property, you don't have to be a subject matter expert. That's why you work with an agent to navgiage you through the process. While it's always great to get referrals, you can also easily go online to read agent reviews. We go on Amazon all the time and read product reviews, so why wouldn't you do the same with your agent? Trust is key when you're deciding on which agent to work with. They can guide you in making the best investment decision for you, given your background.
When it comes down to it, ignorance keeps you poor. Don't let fear around cost and around the unknown keep you from making a solid investment in your future. If you're confident, thinking about it, or just curious about purchasing a home in the future, my best advice is to just start! Check out some videos on YouTube, go to a seminar, or start talking to an agent. As with any good plan, you must start with a good foundation.
If you have a specific question, please reach out! I'd love to chat with you.

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Su doesn't see clients as mere transactions but as real human beings with real human needs. She is passionate about educating and empowering clients to make smart decisions, and as a devoted and human-centric advocate.

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