"Metro area" is doing a lot of work in this article.
Remember metro area is generally a catchment that includes all sorts of outlying suburbs you mentally discount.
So $78K "metro area NYC" is going as far out as Suffolk county on LI, Ocean county, NJ and Putnam county, NY... none of which are normal commute-to-NYC residences.
Note its also a very narrow definition, that fits people in their early 20s mostly:
"SmartAsset’s study analyzed the after-tax income needed to live in the nation’s 25 largest metro areas comfortably. To determine the required salary for a single individual with no kids in each city, SmartAsset employed the 50/30/20 rule, which defines a comfortable lifestyle as one in which 50% of after-tax income is applied to basic living expenses (needs), 30% to discretionary income (wants) and 20% to savings and debt."
In other words, a couple with kids probably needs about 2-3x to "live comfortably"..
And actual NYC 5-boroughs-only would apply another multiplier.
And desirable-to-HN-readers hoods like Manhattan below 96th St, North/West Brooklyn, etc .. yet another multiplier.
I still laugh when I think about the guy I worked with who was like "my father in law said we gotta make $1M gross to own a place & raise a family in Manhattan (ie - UES)".
Initially I thought he was deranged. Now I think he was probably right or at least within the order of magnitude.
Within an order of magnitude is $100k to $10mm. That’s so wide as to be meaningless.
I know people in Yorkville with kids and a coop making $300k ish. If you want west of lex and private schools, you probably need to double that. 1mm as the minimum is still outlandish even for the UES.
Maintaining a NYC lifestyle on $300K household income makes sense for a family with multiple kids attending public school(s). But owning a place in most desirable locations (including Yorkville) seems to require that additional cushion that had to come from somewhere (extreme saving discipline, investments, inheritance, liquidity event, $1MM HH income, etc.).
Yeah I mean, $300K HHI in a 2-3 BR coop in Manhattan with multiple kids is tight, right.
People in that category are probably "house poor".
Easily spending north of 50% of monthly income on housing, with most of their savings tied up in home equity.
I had a friend like this who lived in a $2M condo and conceded the down payment came from family (even after flipping up other condos for a decade) and that he didn't really have a 6 month savings cushion.
$300K in Manhattan..after-tax you're looking at $180K/year maybe, so $15k/mo.
$3k alone on RE Tax, maintenance & insurance on a 2-3BR coop in Manhattan, forever, whether you have mortgage or not.
$5k on mortgage probably, even if they've owned a while with a good entry price and high down payment.. probably $1M mortgage.
So now you have 53% of your money immediately just to having a roof over your head.
Hopefully you are saving 20% for retirement, your kids college, and a rainy day.
Which brings you down to having $4k/mo for electricity, internet, phone, food, clothes, transport, holidays and basically everything for a family, in a place where everything costs a lot of money.
Hopefully you don't do something dumb like own a car and spend another $1k/mo on loan/insurance/garage.
I think people also underestimate the variance of experience of NYC public schools before overleveraging themselves like this.
K-5 is basically zoned, provided there is space. So you can buy yourself into a good school, unless a lot of other people did first and you get shunted off to an adjacent not-so-great one.
6-12, it gets into grades/test/interest/lottery/preferential treatment based placement. Your kid has to apply to middle school and then again to high school, much in the same way they do for college.
You might live in a rich enough neighborhood that your PTA, no joke, has a multi-million-dollar budget.. and famous actors showing up to school events/donating things/etc.
After 5th grade though, your kid could end up anywhere from, at the high end, a nationally known high school with famous alumni, and dozens of kids who end up in Ivys every year.
Or in a school 45min+ away by train, with a sub-70% graduation rate, and basically zero PTA to speak of.
This can create some serious brain worms for parents who have enough money to live in a rich suburb with good schools, but choose Manhattan & public schools (run out of money for private).
People should do what they want, but they should do it with eyes wide open.. and not project their desires too much onto their children.
One couple I’m thinking of, the husband didn’t leave the military until around ten years ago. So they certainly didn’t buy in the 90s. It was pre Covid though.
There could be family money but not obviously so. I do think the space is a bit tight and they are somewhat house poor, but still. It seems very viable. You aren’t talking about needing to eat instant raman every night.
I could believe savings is the thing that falls on the ground.
Savings (retirement & college) are totally the things that just got skipped.
I have friends with kids going to college now, and they mention the shock of talking to neighbors who basically admit as their kid hits 18 "they got into all these good schools but I can't afford them".
I dunno man, you choose to live in one of the most expensive cities in the world, prep your kid for high achievement, and then fall flat on your face in the final lap.
Guaranteed these are the same people who will be working til they die too.
I’m with you, I’d rather a “boring” suburb. But the whole I’m poor on $500k genre can be pretty tiresome sometimes. Yeah, you have to make tradeoffs, but that doesn’t mean you are poor.
Sort by price.
Absolute cheapest is $875k.
7 pages of listings, scrolling to the mid-way point at bottom page 3 / top page 4 puts you at $1.4M. (quick & dirty med-avg proxy)
Note its also a very narrow definition, that fits people in their early 20s mostly: "SmartAsset’s study analyzed the after-tax income needed to live in the nation’s 25 largest metro areas comfortably. To determine the required salary for a single individual with no kids in each city, SmartAsset employed the 50/30/20 rule, which defines a comfortable lifestyle as one in which 50% of after-tax income is applied to basic living expenses (needs), 30% to discretionary income (wants) and 20% to savings and debt."
In other words, a couple with kids probably needs about 2-3x to "live comfortably".. And actual NYC 5-boroughs-only would apply another multiplier. And desirable-to-HN-readers hoods like Manhattan below 96th St, North/West Brooklyn, etc .. yet another multiplier.
I still laugh when I think about the guy I worked with who was like "my father in law said we gotta make $1M gross to own a place & raise a family in Manhattan (ie - UES)". Initially I thought he was deranged. Now I think he was probably right or at least within the order of magnitude.