Affordable Housing Exists, If You Know Where to Look

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" The most expensive homes in Youngstown cost about as much as starter homes in New York City, and you couldn't even buy a parking spot in New York for what a median-priced house costs in the working-class Ohio town.

Buyer's Blues in New York

Longtime Manhattan renters Olive Hayes, 64, a New York City nurse, and her husband, Kevin, a Verizon (VZ) employee, were hoping to spend no more than $450,000 when they started looking for a house more than a year ago. Hayes said she wanted a large apartment with a terrace and a separate living room and dining room. They wanted to buy, in part, because Hayes plans to retire and they will have to give up the spacious two-bedroom apartment they rent from the hospital. It's located in a doorman building overlooking the East River on 96th Street and First Avenue.

On Aug. 25, the Hayeses closed on a one-bedroom pad in a newly built condo building eight blocks north of their current home. It doesn't have a terrace and is about 764 square feet, much smaller than what Olive Hayes had originally hoped for. It's going to be a tight fit for her plants and piano. "It's not easy. It would probably be $1.5 million for what I'm used to," she said.

Hayes' agent, Lynda D. Gray of Bellmarc Realty, said first-time buyers in New York often have to lower their expectations and stretch their finances. "The motivator is the investment," she said. "You're not going to have as much space as you like…but you're going to be able to sell for a profit and possibly buy something outside of the city."

Click here to see the most and least affordable housing markets in the U.S.

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Gopal writes about real estate for BusinessWeek.com in New York.