According to real estate website, the average price per square foot for a single family home in New York City is currently $1,198. A 1,200 square foot home would run an average of $1,437,600. The New York City housing market is not alone in its exclusiveness. Properties in other major metropolitan areas throughout the country, such as Boston, San Francisco and Chicago also come with a high price tag.

IN PICTURES: 7 Tips On Buying A Home In A Down Market

While you could expect to pay more or less depending on the particular neighborhood, unless you have a job with remarkable pay and benefits, it might be difficult to afford your dream home in a premier market like New York City. Homebuyers who look outside the city limits, or have the flexibility to explore a different city, can often find their dream homes - for less. Note - all figures from (For more, see Why Your First Home Shouldn't Be Your Dream Home.)

Try a Different Neighborhood
Despite the average listing price in New York City of $1,809,169, prices vary dramatically between neighborhoods. In the highly desirable Upper East Side market, for example, the average listing price is $2,480,996, well above New York's overall average. Look in Hamilton Heights, and the average listing price drops to $620,067. Popular with artists, teachers and other professionals, this neighborhood offers many of the benefits of the more premier New York City markets, without the price.

Boston is another example where the neighborhood makes a big difference in price. Though the average listing price is $850,748, a home in Boston's Back Bay neighborhood will cost an average of $2,240,564 with an average price per square foot of $699, versus the nearby Jamaica Plain neighborhood, which has an average listing price of $397,458 and an average cost per square foot of $288. (For more, check out The Truth About Real Estate Prices.)

Look Outside the City Limits
Many people who work in cities like New York cannot afford to live there. A qualified real estate professional can recommend a nearby market that is more reasonably priced. Take New York City, for example. Nearby Hoboken, New Jersey, has an average listing price of $573,039, with an average price per square foot of $508 - dramatically less than NYC's $1,809. Or consider Jersey City, New Jersey, another area close to NYC, which has an average listing price of $367,934, and an average price per square foot of $156. For homebuyers willing to look outside of - but near - a city, they may be able to get a whole lot more house for their money.

IN PICTURES: 18 Do-It-Yourself Projects To Boost Home Value

Explore a Different City
People love New York City for its cosmopolitan style, exciting night life and cultural opportunities, and the hustle and bustle that comes with a big city. There are, however, other cities that offer diversity, culture and the arts, and plenty of excitement. For people not tied to a particular city because of family or employment obligations, exploring a completely different city might uncover attractive buying opportunities, at a fraction of the cost of living in a city like NYC.

While nothing can quite compare to the Big Apple, cities like Atlanta, dubbed "Hotlanta" for both its high summer temperatures and abundant nightlife (average listing price: $381,185 / $129 per square foot), and Austin, Texas, known as "the live music capital of the world" (average listing price: $414,775 / $103 per square foot) can offer homebuyers some of the excitement of a bigger city, at a much more affordable price.

Compromise? It Might Be Worth It
Many potential homebuyers have a good idea of exactly what type of house would make them happy, whether it's a traditional three bedroom, two-bath Tudor home or a cute bungalow. Sometimes, however, the dream home budget doesn't fit in with a desired market, and buyers are forced to look in different neighborhoods, nearby cities or suburbs, or completely different markets. Lenders are no longer willing to dole out huge mortgages for more house than people can afford, and many buyers are more careful about how much debt they take on. If a buyer cannot afford a dream home in the market of their choice, it sometimes pays to expand the search to an adjacent market or an entirely new area, to find a dream home for less. (For more, check out 4 Real Estate Markets Set To Rebound In 2011.)

Related Articles
  1. Home & Auto

    Read This Before Buying a Vacation Home with Friends

    Going in with friends to buy a vacation home will save you on the mortgage and expenses. But if there's conflict, it could end up costing your more.
  2. Home & Auto

    The Most Expensive Neighborhoods in London

    Understand what makes London such a desirable place to live and why it is so expensive. Learn about the top five most expensive neighborhoods in London.
  3. Home & Auto

    Why Housing Costs Shouldn't Exceed 30% of Your Budget

    Financial experts will argue that there’s no problem with allocating 50% of your net income to housing, but that barely leaves enough money for living comfortably. Reducing housing expenses to ...
  4. Investing

    Hetty Green: Invest Like the Richest Woman in the World

    Investors would be wise to emulate the approach to the markets that Hetty Green used to grow her fortune.
  5. Investing Basics

    Tiny House Movement: Making Market Opportunities

    The tiny house movement throws all assumptions about household budgeting and mortgage management out the window, and creates new market segments too.
  6. Investing

    Where Should I Keep My Down Payment Savings?

    While saving up for a down payment, where should you keep your money. A bank? The stock market? It all depends on your timeline.
  7. Professionals

    How NYC's Yellow Cab Works and Makes Money

    Owning a New York City cab can be a great low-risk investment if you can afford the cost of a medallion.
  8. Home & Auto

    The Most Expensive Neighborhoods in Manhattan

    Understand why Manhattan has some of the priciest residential real estate in the world. Learn about the top four most expensive neighborhoods in Manhattan.
  9. Home & Auto

    The Most Expensive Neighborhoods in Los Angeles

    Understand the layout of the greater Los Angeles area and what is driving up home values. Learn about the top eight most expensive places to live in LA.
  10. Home & Auto

    How Much Money Do You Need to Live in NYC?

    Learn how much money you need to meet basic expenses in New York City as a student, as a professional and as an unemployed job seeker.
  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. Can I take my 401(k) to buy a house?

    Once you reach 59.5, you can use the funds in your 401(k) retirement savings account to buy a house or any other expense ... Read Full Answer >>
  3. Can I take my 401(k) to buy a house for my children?

    Under the standard regulations for 401(k) retirement savings plans, you may elect to withdraw funds from your 401(k) for ... Read Full Answer >>
  4. How is market value determined in the real estate market?

    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
  5. What does the American Dream mean to different generations?

    The American Dream at its core is the belief that every generation should enjoy greater prosperity than the generation before ... Read Full Answer >>
  6. When should a real estate broker release earnest money deposit funds?

    As soon as an agent or broker accepts an earnest money deposit, he becomes an escrow agent. This means that, in most cases, ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!