Photo: Marianne O’Leary/Flickr
Owning a home has long been a staple of the American Dream, but in New York City less than 32 percent of residents own their home — half the national average. This is not surprising considering the median down payment alone on a home in Manhattan is currently almost double the national sale price of the “average” home, according to a new report by the real estate data site Property Shark.
Currently, the national sale price of a home is just over $300,000. Over the last 5 years, the median cost of a home in the US has increased $52,000.
However, in Manhattan over the same period, the down payment for a home alone increased by over $125,000, and is now $500,000. The down payment in Manhattan has risen faster than the entire value of a home in most of the US, says Property Shark.
Many homebuyers in Manhattan tend to have more wealth, or are foreign individuals or companies looking for an investment that is easy to liquidate. Along these lines, Manhattan is the only one of the five boroughs to consistently record over 50 percent of its sales without financing. In 2016, 55 percent of sales were “all cash” transactions, or done without any financing.
In 2016 so far, only 45 percent of Manhattan homebuyers took out a mortgage to purchase their home, compared to 63 percent citywide. In the luxury market — homes selling for $5 million and up — the number of all cash transactions skyrockets to 60 percent. This is impressive considering the median down payment for a luxury home is currently 38 percent, or $3.1 million.
However, back in 2009, the luxury market down payment peaked at a high of 50 percent or $3.7 million. Additionally, only 27 percent of luxury homebuyers financed their purchase in 2009, well below the 40 percent recorded in 2016.
Click here to view the entire report.