Starter Homes Vanish from the NYC Market
New Yorkers looking to update their status to homebuyers have less options and square feet to peruse.
Three years ago, New York City counted 5,300 listings priced between $400,000 and $800,000, which StreetEasy defined in a report as the price range for a typical starter home in the city. By August 2022, that figure had dipped to nearly 4,500 listings for sale, leaving typical first-time homebuyers 15 percent fewer listings to choose from in the post-pandemic market.
The size of the typical starter home is also shrinking. Today, it is 9 percent smaller than it was in the summer of 2019 — with the median footprint shrinking by 90 square feet to 900 square feet. Starter homes in Queens and the Bronx have shrunk the most, by 150 square feet and 208 square feet respectively. In Manhattan, the median square footage is 686 square feet — the smallest in the city.
“That’s essentially about four and a half parking spots in New York City,” said Kenny Lee, a StreetEasy economist and author of the report. “And if you’ve done parallel parking in the city, you know how small that can be.”
Inventory varies, based on borough. In Manhattan, starter home inventory was up 3 percent in August from three years ago, but shoppers looking for a home face high costs: $942 per square foot, the highest in the city.
Homebuyers are also losing ground in the outer boroughs, as rising median rents push the former budget havens out of reach. Brooklyn’s starter home inventory was 26 percent below its pre-pandemic level and still pricey at $658 per square foot, clocking in as the second most expensive after Manhattan.
Queens has 11 percent fewer starter homes available, but price per square foot has risen the most. At $608 per square foot, it’s 17 percent more than three years ago.
The Bronx and Staten Island similarly had substantial declines in starter home inventory, with 51 percent in Staten Island and 23 percent in the Bronx. Median price per square foot reached $414 and $386 respectively.
“It’s a really tough market for buyers out there, especially the shoppers with lower income and lower savings [that] are being squeezed quite literally, according to shrinking median square footage,” Lee said.