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New York City Mortgage Refinance

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The metropolitan New York City area is a vast and varied housing market with something for everyone, from a twenty-million-dollar penthouse on Fifth Avenue to a single-family one-bedroom home in Staten Island for under $200,000. Home to over eight million people and the location of hundreds of thousands of dwellings, the New York City area is comprised of the five boroughs of Manhattan, Brooklyn, the Bronx, Queens, and Staten Island. Each borough is like a city unto itself with its own character and real estate market. A quick search for New York City real estate on Trulia Real Estate Search showed 13,000 resale and new homes on the market in Manhattan, with an average listing price $1,975,011. Average prices in the other boroughs range from a low of $365,000 in the Bronx to a high of $518,838 in Brooklyn.

New York is susceptible to national trends in housing prices, but during the global recession the big problem became affordability. In the second quarter of 2007, metropolitan New York home prices peaked at an average of $550,000. By early 2009 the median price had fallen 19% to $450,000, which was a less severe drop than seen in many other metropolitan areas in the U.S. With unemployment high and credit tight, the New York housing market remains sluggish in large part due to frugal buyers.

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Mortgage refinance - New York

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Despite high unemployment, there is a gap between median income and housing prices. A recent CNN.com report revealed that while the New York area has an average median family income of $65,500, the median home price as of May 2010 was $426,000, placing many homes out of reach of families.

Foreclosure rates have been relatively low in New York, perhaps aided by the length of time it takes for a bank to complete a foreclosure in New York, which is a year, as opposed to six months in California. A diverse economy and mortgage relief programs provided support, and perhaps most significantly, co-ops in New York have notoriously stringent approval standards, which helps to weed out marginal buyers. According to RealtyTrac, in December 2009, for example, the foreclosure rate in New York was one in every 1,652, much lower than the national average of one in 366 homes. Of the five boroughs, Brooklyn had the highest foreclosure rate, followed by Queens.

Of course, New York is an area not just of boroughs but individual neighborhoods. According to a report by the New York Daily News, in 2009 the Manhattan neighborhoods that saw the most number of price cuts relative to the total number of units on the market were Beekman, Manhattan Valley, East Village, Central Park South, and SoHo. For motivated buyers, deals could be had on the Upper West Side from the 60s to the 80s. The best deals are at the very top end of the market - $10 million and above. The market has been flooded with high-end properties and prices have fallen as money became tight and Wall Street took a major hit. New York experienced a sales and rental uptick in March 2010, which is before the usual busy months of May and June, but the mini-boomlet stalled and sales are once again stagnant.

For homeowners looking to refinance, from Trulia we get a snapshot of refinancing rates as of June 2010. For a $300,000, 30-year fixed-rate refinance, annual percentage rates (APRs) range from 5.266% to a low of 4.651% at lenders including Hudson City Savings Bank, M.T.G. Capital, Flagstar Direct, and Manhattan Mortgage Corporation. Homeowners need to be aware that, should their home value have decreased to where the loan-to-value ratio is above 80%, refinancing may not be an option until home values rise again.

Looking forward, analysts expect New York housing prices to keep falling throughout 2010 as unemployment remains high, foreclosures persist, and buyers, perhaps following a self-fulfilling prophecy, hold back until they think the market has hit bottom. The key when buying in New York is to use a qualified real estate agent who knows the housing stock in the neighborhood that you're looking at.