For the first time homebuyer, buying a co-op is going to be less expensive with much lower transaction costs at closing. A good example would be to compare closing costs of a $500K Co-op vs. Condo:

500K Co-op Closing Costs
Aprox. $7,000-$12,000

500K Condo Closing Costs
Aprox. $22,000-$25,000

Now, as far as the state of the current housing market and its future, it can be debated that co-ops are more protected in a down market than condos because of the lack of speculation in the co-op market. Co-ops have a very tedious board approvals process, with many boards being extra strict on who they let into their building. As a private company, they can reject whom they please within the law. Condos, on the other hand, have a RIGHT TO FIRST REFUSAL system for passing the board. Quite simply, once your past criminal record is reported as clean, you are approved to purchase the apartment; if rejected, the Condo must buy the apartment from its reserve fund.

So, the fact that co-ops are more cautious to who buys in their building, and speculators generally only buy the condo marke, co-op homeowners are less likely to be forced to sell in a down market.

If you are looking to buy real estate in NYC for the first time, and you just barely have enough to afford a down payment + closing costs, then a co-op is for you! Dont listen to the bad press co-ops may get, or to your friends who tell you only to buy a condo. Rather, focus on location, raw space, low monthlys and STAYING WITHIN IN YOUR BUDGET as the main factors. After all, the building you buy in may have a very easy board that allows subletting and parents buying for children. If this is the case, than it will be that much easier for you to sell, when the time is right!