NYC Apartment Ownership an Impossible Dream

Today's New York Times reports that the average apartment price in Manhattan hit $1 million during the first quarter of 2004, a new record, and an increase of 32% over the same period last year. The previous record was $920k, set during the third quarter of 2003.

The median apartment (or middle of the market) is now at $625k, which is up 21% from a year ago. This suggests that the super-heated high-end of the market (apartments that cost well above $1 million) is what's pulling up the average so quickly.

But for $625k in a decent neighborhood, you're only going to get a one-bedroom. If you want two bedrooms, you're going to be spending over $1 million, or making serious compromises (a bad building, a bad location, or both). The article discusses a recent transplant from California, who was shocked to discover that she couldn't get a decent two-bedroom apartment for under $1.8 million.

The survey is limited to Manhattan below 112th St on the West Side, and 96th St on the East Side, which are the traditional boundaries separating the Upper West and East Sides from Harlem. These divisions are increasingly irrelevant, as Hudson Heights and Washington Heights become more gentrified. But don't expect any great bargains up there either. Half-a-million dollars in Washington Heights doesn't buy much any more.

In Manhattan, at least, home ownership for most of us is becoming the impossible dream.