Co-ops and condos are cheaper ways to home-ownership

The American dream of owning your own home is still alive on Long Island.

For those venturing into the real estate market for the first time, that big house with the picket fence might have to wait. But thanks to low interest rates and an ample supply of affordable cooperatives and condominiums to choose from, getting your foot in the door might be easier than you think.

Prices of condos and co-ops can run considerably lower than comparable single-family homes, says Ira Freireich of Best Buyer's Broker Realty in Malverne. Freireich estimates that condos are priced at about 85 percent to 90 percent and co-ops at 50 to 60 percent of the cost of similarly situated single-family homes.

In some areas, a buyer can land a studio apartment for as little as $50,000 and start building equity instead of paying rent.

Barbara Ford of Ford Real Estate in Floral Park says that owning a co-op or condo may be less expensive than renting, depending on your mortgage or loan payment and monthly carrying charges, and applicable tax deductions. For example, she says, in Floral Park, one-bedroom apartment rentals run between $1,200 and $1,400. The total cost of typical mortgage and maintenance payments might be about the same, but, Ford says, the "real cost" of owning that unit could be hundreds of dollars less after tax deductions.

The Mutiple Listing Service of Long Island's latest figures show that in September, the median sales price for residential properties in Nassau County was $423,250, and for Suffolk it was $340,000. In contrast, the median sales price for condos and town houses was $409,550 for Nassau and $318,500 in Suffolk, and for co-ops, the median prices were $189,000 in Nassau and $130,000 in Suffolk.

Median closing prices were down in every category compared to September 2009. Affordability, as defined by MLSLI's index that factors in median family income and home prices, is also up in every category since last year at this time.

"Buying a home is a process," Freireich says. "Take the time to investigate and to research and understand what you are purchasing."

While co-ops won't appreciate as much as single-family homes, they will go up and down with the market, and Freireich feels that prices will not drop over the next five years.

"The bottom line is that you are buying a place to live in now that will sell later," he says.