Phil Mondiello, 29, has been saving for more than 10 years to buy a starter home.
Still living in Eltingville with his family, he has no student loans. He says he has great credit, owns his own car, and has been "smart" with his money.
"Every year, I've been saving up and saving up for a simple three-bedroom house, and every year I need more money for the down payment," said Mondiello, who said his girlfriend, Lindsey Bedford, is saving as well.
After searching for a home, Mondiello realized he likely has to spend $550,000 for a three-bedroom house on the South Shore that likely "needs work."
But these homes often get sold in "bidding wars," said Mondiello, who is in the electrics distribution business.
"I have been saving aggressively for the last 10 years of my life. But it has come to the point where it's going to take every dime I have to afford a house. Plus, I have to save for retirement, so am I also going to be able to keep up with a monthly mortgage?"
And Mondiello isn't alone.
"It's very tough for first-time buyers because they generally have little to put down and need higher mortgages," said Ken Gonzalez, a real estate attorney and partner in the law firm of Gonzalez & Merlino in Castleton Corners.
"Sellers are looking for buyers with all cash or very small mortgages because they are trying to avoid lender appraisal issues," he added.
According to the Staten Island Board of Realtors' website, homes are reaching "unaffordable levels," at a time when there are less homes on the market than buyers who want to purchase them.
"Although mortgage rates have remained enticingly low, home prices have reached unaffordable levels for many new entrants into the housing pool at exactly the same time that established owners are proving to be less interested in moving," said SIBOR.
Increase in prices
From Jan. 1 to Sept. 30 of 2016 there were 2,957 residential properties — one-family, two-family, condos and co-ops — sold. The average price of these homes was $477,280, according to SIBOR.
During the same time period in 2017, 3,125 residential properties sold on Staten Island, with the average price rising to $527,901.
The average home price increased by $50,621, or about 10.6%, from 2016 to 2017, according to SIBOR.
"Prices are up quite a bit from year over year," said Sandy Krueger, CEO of SIBOR. "The entry level home is higher than it was. ...We have minimal inventory, which is part of what's driving the prices up."
Some home buyers are looking to cash in on the seller's market, and in turn, are inflating the prices of their homes.
"Due to the low inventory, prices are still going up monthly," said Andrew D. Klapper, a real estate attorney and partner in the West Brighton firm of Klapper & Klapper.
"We are in a situation where deals are made at over-market prices, and then the appraisers come out with the task of valuing the home mostly based on prior sales, but there are no prior sales that support the current prices. Unfortunately, more sellers, when hearing that their houses appraised low, do not negotiate, but, instead, take the attitude that, since there were so many bids made when their houses went on the market, they will just move to the next buyer," he added.
Realtors say another reason for overpriced homes is seller desire to build negotiating room into the price.
"There are overpriced homes, most often because sellers insist on building negotiation room into the asking price," said Connie Profaci, broker/owner of her self-titled New Dorp real estate agency.
"But many times, sellers feel they need to recover the cost of improvements they made on the home. We urge our listing clients to take into account that they made improvements and enjoyed them while they lived in the house, and, therefore, should not feel cheated if they don't get back what they spent dollar for dollar," she added.
And many buyers say homes are simply being inflated in price because people know it's a "seller's market."
"Sellers are simply charging more money because they know they can get it," said Donna King, who had to settle on a different style home than she and her husband, Mickey, initially desired.
"The experience I was having, was if you didn't get there the afternoon the house went on the market, the chances of you getting that house was slim to none," she added, noting they purchased a town home for $407,000 earlier this year.
Down payment/cash needed
Another obstacle for first-time buyers is there are many "cash buyers" and investors with large down payments in the marketplace.
"Banks are still playing it safe when it comes to underwriting mortgages so that is a challenge for buyers who need to come up with a larger down payment and a better credit score in order to qualify, " said James Prendamano, managing director/associate broker of the St. George-based Casandra Properties.
King said she found that buyers not offering to pay cash take a back seat to those who can in this market.
"If you weren't paying cash, the expectation was that you'd pay more than the listing price, which was already high," said King.
Challenges for Realtors
Carmine Masullo, broker/owner of the Bulls Head-based Homefinders of Staten Island, said the majority of his buyers are looking to purchase homes for between $350,000 and $600,000.
"My biggest obstacle is lack of good houses to show them — meaning dirty homes, homes with too much furniture, etc.," said Masullo. "Also, people see that 'other people on the block' are getting crazy numbers for their house so [they think] their home is worth much more. That is not true most of the time," he added.
Still cheaper than other boroughs
Realtors say that while Staten Island prices are high, homes in other boroughs are higher.
"The typical two-family home in Brooklyn is priced 20% to 30% higher than Staten Island," said Masullo. And there's no parking, [little] privacy, and higher crime rates."
Said Prendamano: "The Staten Island real estate market is still a bargain when compared to other boroughs."
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