The junior banker’s guide to finding an affordable New York City apartment
Despite some of the recent negative rhetoric, finding a first job on Wall Street is a dream come true for many students, particularly for those moving to New York City for the first time. But know that the process comes with one ugly awakening – well, two if you count the hours - the spiraling New York property market.
The price of rental apartments in New York continues to escalate, even though banking compensation has remained relatively flat. Unless you want to be in mountains of debt – or you have a savings account to fall back on – you may want to be rather judicious when it comes to searching for a place to live.
The average first-year analyst in New York earned a base salary of roughly $72k last year, according to a recent survey from Wall Street Oasis. The average bonus for rookie bankers was around $35k. So if you’re in the middle of the pack, you’ll likely gross between $100k-110k in 2014 if compensation numbers remain relatively stagnant.
Experts say that you shouldn’t spend more than one-third of your gross income on rent, which would leave you between $33k and $35k for the year. Considering New York City tax and the lifestyle you’ll need to live in Manhattan, it’s safer to take the lower end of the scale. That leaves you a maximum of $2,750 a month in rent. Rude awakening time: that’s a studio, at best, in many neighborhoods in Manhattan.
As of March, the average Manhattan studio in a doorman building was priced at $2,886 a month, according to Real Impact Real Estate. The average one-bedroom was $3,985. Non-doorman buildings are cheaper, but often make life difficult for people who work north of 80-hour weeks. No one to sign for packages and no one to receive dry-cleaning. The average non-doorman studio in March was priced at $2,462, while a one-bedroom went for $3,226.
“And those numbers are only going to go up come spring with all the students moving in,” said Danielle Hamburger, a licensed real estate salesperson for Douglass Elliman Real Estate in New York.
While you won’t find a steal anywhere, there are certain locations in Manhattan that are more moderately priced. You’ll get the most bang-for-your-buck in the Lower East Side, where an average one-bedroom currently costs $2,500 a month, with some rents bottoming out at $1,850, according to Curbed New York. The East Village is a little hipper and will cost you, on average, just over $2,700 per month for a one-bedroom.
Other areas to look for reasonably-priced apartments include Murray Hill, a subset of Midtown which runs from East 34th St. to East 42nd St. between Madison and First. There are some pricey buildings in the area, which drive the average rent up, but there are also deals to be had in a doorman-laden area, said Hamburger.
It’s a similar story in the Financial District, where certain blocks drive the average cost of a one-bedroom apartment to $3,600 a month. Still, you can find plenty of apartments priced well below that figure. Midtown West also houses a number of affordable buildings, Hamburger said.
Uptown apartments, which used to offer some of the better deals in Manhattan, are no longer the financial safe haven that they used to be. The average price of a one-bedroom apartment in an Upper West Side doorman building increased 5.3% from February to March, more than any other neighborhood in Manhattan, according to Real Impact Real Estate. Meanwhile, rental prices actually fell for doorman one-bedrooms in Murray Hill, the East Village and the Lower East Side during that time.
Brooklyn has lost its edge
If you think rents are being jacked up in Manhattan, take a quick across the East River. The median monthly rent in Brooklyn was $2,900 for March, up 13% year-over-year. The difference in median monthly rent between Brooklyn and Manhattan was $1,100 in 2008. That difference fell to just $300 this year.
“If you are going to pay that much, you might as well live in Manhattan,” said Hamburger. “You’ll lose the difference in a week worth of cabs.”
That’s of course unless you prefer the culture, which plenty of people do. The number of new leases in Brooklyn doubled in March compared to a year ago. Then again, you can always get a roommate.