Study: NYC is only the fifth least affordable city in the U.S.
In spite of recent inroads from San Francisco, New York City has long settled into its identity as the most expensive metropolis in the country (and also one of the most expensive in the entire world). But recent data would indicate there are actually several U.S. cities where the housing market is even harsher. And where everyone has to pay for a car, to boot.
Mortgage data site HSH.com released a survey this week looking at the salaries needed to afford the median home sale price in cities across the country, and found that NYC was only the fifth (!) least affordable U.S. city by these metrics, behind San Francisco, San Diego, Los Angeles, and Boston. The most affordable cities on the list were Pittsburgh, Cleveland, Cincinnati, St. Louis, and Detroit.
Lest you have your world view utterly shaken up by this news, the outcome of the study has a lot to do with the way the data was collected.
The median sales prices were pulled from National Association of Realtors data, which groups things together by "NY Metro area," which includes cheaper places outside the city including parts of Long Island and New Jersey. (You can see the full breakdown of metro area definitions here.)
While this is true for other cities on the list, as well, HSH.com vice president Keith Gumbinger tells us via email, "I'm sure that a much narrower definition of geography would tend to lift the median price, perhaps substantially, as the influence of midtown Manhattan prices (and taxes, and insurance costs) would be more pronounced."
Additionally, Gumbinger points out that the NAR data looks strictly at homes that were actually sold (and not the prices of options that are sitting on the market), so may be subject to fluctuations if, for instance, more one-bedrooms happen to have sold versus townhouses in a given quarter. This also makes sense, in light of the widely-discussed "softening" at the top of New York's luxury market, where many of the city's highest-priced apartments are currently sitting un-sold.
In any case, not necessarily the time to call all your friends in L.A. or Boston to gloat about your comparatively dirt-cheap living situation here. "Regardless of the definition (and whether or not the NY metro is the most expensive or only almost the priciest), there is no doubt that homes are an expensive proposition in this area, and that people struggle to afford decent living spaces," Gumbinger says. "Perhaps the only saving grace is that as this is the median price, half the homes sold during the period were for smaller amounts, meaning that there are chances for these homes (even if the competition for those properties is probably quite severe)."
That, and that mortgage rates remain unbelivably low.
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