Thirty-eight of the 400 individuals on Forbes magazine's list of the richest Americans—almost ten percent—call New York City home. All thirty-eight are billionaires. Some of them, like Ralph Lauren and Donald Trump, are household names. Two of them are Rockefellers. One of them, Michael R. Bloomberg, is the mayor.
The point is, big money is so integral to the Big Apple that when the appraisal firm Miller Samuel reports that the average apartment in Manhattan is selling for $1.22 million, New Yorkers respond with a shrug.
But let's put that in perspective. According to the National Association of Realtors (NAR), the average home price for the entire United States is $220,000, give or take. That means—ready for this?—the average apartment in Manhattan costs a million dollars more than the average U.S. home.
Let's break it down further. Most co-ops require a minimum of twenty percent down (the super-exclusive buildings on Fifth and Park Avenues and Central Park West often require a full cash purchase, but that's a different article entirely). Then there are the closing costs. Mortgage taxes, legal fees—there can be as many as five attorneys at a closing: the buyer's, the seller's, the co-op's, and the two banks'—appraisal costs, mortgage taxes, transfer fees, flip taxes, and, for all apartments sold at a million bucks and higher, the so-called "mansion tax" of one percent. (The six percent broker's fee, generally evenly divided between the listing and selling agencies, is picked up by the seller). When all is said and done, you need about $220,000 up-front in liquid cash to buy a million-dollar apartment. For that amount of money, you could buy a house outright most places in the country.
All that said, most New Yorkers are not Rupert Murdoch, Carl Icahn, or David H. Koch (numbers 32, 24 and 19, respectively, on the Forbes list and the three richest men in Gotham). In fact, according to Bloomberg News, the average yearly income in Manhattan is a "mere" $73,000. So who's buying these seven-figure apartments, and how are they doing it? Is now a good time to buy? To sell? To move to Pittsburgh? And what does the future hold for New York real estate?