The Pros & Cons of Buying Property in a Major City (2024)

Deciding to buy a home is a very personal decision, typically guided by one’s financial capabilities, lifestyle preferences, and very often, their stage in life. And, if you consider that prudent homebuyers are also seeking to maximize their return on a purchase that is typically the largest of one’s life, one can easily begin to see just how many facets of one’s life impacts a decision to buy a home.

But one thing remains consistent and true about homeownership – it’s representative of a giant slice of the American dream – offering a stable shelter, very often, considerable appreciation (and a fat nest-egg), and a sense of belonging – being a part of a larger neighborhood and/or community.

Yet, deciding on where to live may be an even more personal decision than simply deciding to buy.

According to the UN – the United Nations, more than half the globe’s population resides in defined urban areas [55% as of May 2018 as per the United Nation’s Department of Economic & Social Affairs (UN DESA)]. Note, though:

These statistics from the United Nations from May 2018 reveal a striking increase in urban dwellers’ actual number across nearly seven-decades. From 1950, with about 740 million people living in urban defined areas to more than 4 billion people residing in urban locations in 2018 – and an increase of more than 3 billion people!
The United Nations’ Department of Economic & Social Affairs foresees, through statistical modeling, an increase in the number of urban residents to grow to include more than two-thirds of the world’s population by 2050 – just three decades.

At the start of the COVID-19 (which occurred just before the robust real estate selling season was about to get rocking), there were a handful of name worthy real estate mavens that speculated major cities could see a mass exodus of residents fleeing to the less crowded (i.e., safe for social distancing, etc.) suburbs. And, in retrospect, for what now looks like a New York minute, the United States’ real estate market, like the rest of the world, reacted significantly – by grinding to a halt, watching a little-known virus spread virulently across the globe.

Real Estate Related Benefits

While the price to buy a property within city limits may be more costly than similar properties located outside the city’s limits, the reality is that city property taxes tend to include a list of comprehensive services that often cost extra for suburban dwellers. Examples of these services would include garbage pickup or water/sewer services, among many others.
Real estate property taxes, dollar for dollar, tend to be less costly for city properties than properties located in suburbia. This typically happens because the city’s high population density allows for the government to spread the cost of running the city among significantly more residents than would be available in less densely-populated suburban locations.
Urban real estate offers more access to a variety of affordable public transportation options, like scheduled buses, subways, trains, and taxis. Public transportation options help reduce one’s monthly living expenses by eliminating the expense associated with owning and operating an automobile.
On a historical basis, properties located in defined urban areas in the United States tended to appreciate at a faster pace than those homes located in suburban towns and villages. Pre-coronavirus urban median sales prices were up over 9% (year-over-year) when compared to the median sales prices of suburban homes (that were up about 6%) for the same period.
Those who own properties in a city also have access to more job opportunities (and career advancements); often, these city-located jobs provide higher compensation packages than similar jobs located in suburban locales.
In June of 2020, the yearly home value growth pace for homes located in urban ZIP codes was 4.3% compared to 4.1% for homes in suburban ZIP codes. Again, showing that home values in urban locations tend to outpace home values in suburban locations.
In July 2020, the national median price for a home in the United States exceeded $300,000 for the first time in July 2020, which further indicates that real estate is typically a sound investment.
You have no landlord, which means you are free to do whatever you like, within legal limits.

Other Non-Real Estate Benefits

A major city attracts ethnically diverse populations that represent cultures from the four corners of the globe. Cities, like New York City, Miami, or Chicago, for example, call this phenomenon – the combination of diverse cultures in one place – a melting pot. This diversity of influences allows city dwellers to explore the richness and originality of people from all walks of life.
City life offers a plethora of nightlife options – many of which remain open until mandated to close by a blue or other antiquated law.
City dwellers often take advantage of the incredible quality and diversity of food establishments that reflect the inhabitants of city neighborhoods. Examples of these amazing dining areas and cultural icons include Little Italy or Chinatown in NYC, or Little Havana, in Miami, among others.
City life provides rich cultural attractions that offer many alternatives like museums, theatres, concert halls, and green spaces with rentals available for bicycles, rowboats, mopeds, and Segways, to name a few.
Those who live in a city will find there is typically better access to medical care and cutting-edge medical technologies.
City dwellers usually live closer to their place of work, minimizing their commutes and freeing up time to do things of interest, rather than fighting traffic just to get home.
Those who live in urban areas have the option of high-speed internet access; this is especially important for those who own & operate home-based businesses dependent on a reliable and fast internet connection.
Depending on the city, it is sometimes less expensive to buy real estate than it would be to rent a similar place.
Those who live in a city will find there is typically better access to extensive and excellent educational opportunities.

An urban lifestyle, like any lifestyle, includes both pros and cons. Therefore, it is important to consider the flip side of the benefits of living in a city, or as some refer to them – the compromises. Many of the compromises that must be made to enjoy city life include the following:

Unless you have been blessed with an unlimited budget, it is highly likely that when you buy a property in a city that – dollar for dollar – you are likely to afford a smaller living area than you would buy in suburbia. Some people may be fine with less space, but this can be challenging for some individuals.
Even though most cities have large budgets for education, many city schools do not have ample resources for education expenses as compared to the amounts spent on schools in suburban locations. If you simply love the home’s neighborhood, check out private school or homeschooling options as an alternative.
City living can be quite challenging for those who live there and insist/require a car for business or other reasons. In some cities, the cost to park a car in a garage can reach into the hundreds of dollars each month for spaces that may not even be conveniently located near your home. On-street parking is generally difficult to find and subject to alternate side street cleaning in many neighborhoods.
Many homes in older cities were built before the implementation of modern building codes. As such, it is crucial for city home buyers to utilize a qualified building inspector to determine the current and potential issues that you may be facing in terms of lead paint and/or asbestos, among other issues. While these may not be an immediate threat, it is essential to understand the risks involved in an expensive purchase like a home.
- Asbestos was a fundamental building material from the 1930s through 1978 and may still be present in an older home in its insulation of the home or hot water pipes.
- Lead paint was used in a home up until the late 1970s; lead paint can be dangerous when exposed to children.
Although each city will differ greatly, cities tend to have higher crime rates than far-reaching suburbs.
City life is simply filled with more noise and pollution than living in the suburbs, which may become a challenge for those who have allergies or sensitivities to air pollution. In addition, high-density areas do not always offer the privacy one requires.

The reality is there are always challenges when we move; however, there are also several important benefits that change brings. In fact, it is likely that for every negative aspect that worries you about a city, there are positive factors that make the purchase worth the time, money, and effort.

If you desire to be close to work and prefer to use your time in some other way than commuting, then city life may be ideal for you. Remember, however, that there are adjustments that must be made, but nothing so challenging that they cannot be planned for accordingly.