LI down 23% in home value in 2009? (Levittown, Merrick: sales, apartment, foreclosures)

[zulu400]

Originally Posted by WJFM

While the article does paint a picture, it has plenty of flaws.

It does not take into account that rents are still high in the NY area. At current house prices, it seems like it will be cheaper to own than to rent.. provided you can get a loan and come up with a down-payment. 2-bed apts in Nassau county are still renting for 1600-2k a month, while buying a 4bed house for 420k will put your mortgage and taxes at about 3k a month.. and with tax deductions, its almost the same as renting. The fact that there is less construction in NY could also mean that there is less land available and its more expensive to construct here.

The article does not account for immigrants from places like India, China and Korea. They are usually highly educated, upper-middle class and I see many of them buying houses in good school districts. There are millions of them, and depending on US immigration policy in the future, there could be millions more.

I don't agree with you on the (cost of rent = cost of own) philosophy.

Personally I think NY is probably near the bottom (if not the bottom) of the list if you compare with the rest of the country on the $ to rent vs $ to own logic. I think in other states it much more affordable to own a house by your logic, with the mortgage minus deductions..... the high taxes in NY kills the equation.

[WJFM]

Actually, I think the real killer are NOT the taxes. Agreed taxes are high, but prop taxes are completely deductible from income taxes, which softens them by 36% ( for the higher income bracket). The real killer is actually home-maintenance costs ( landscaping, odd repairs, etc). But that's because I hire people to do home maintenance.. if you do it yourself it might not be so high.

But the equation for owning is still attractive to someone who has excellent credit and income, has more than 100k in the bank, and is paying 3k a month on rent for a 4Bed house in Central Nassau. He can as well empty is 100k for a 500k house, and then pay 2200 mortgage, 800 in taxes every month. Minus tax, the expense per month is about 2200 + home maintenance. But it is your own home, your mortgage is fixed for life, and your taxes go up 5%, but your rent will also go up 4%. If you stay for 5+ years, it looks like it will pay off.

But it looks like there are not too many with excellent credit and a 100k in their bank nowadays.. so the dearth of buyers.

[dman72]

Originally Posted by WJFM

Actually, I think the real killer are NOT the taxes. Agreed taxes are high, but prop taxes are completely deductible from income taxes, which softens them by 36% ( for the higher income bracket). The real killer is actually home-maintenance costs ( landscaping, odd repairs, etc). But that's because I hire people to do home maintenance.. if you do it yourself it might not be so high.

But the equation for owning is still attractive to someone who has excellent credit and income, has more than 100k in the bank, and is paying 3k a month on rent for a 4Bed house in Central Nassau. He can as well empty is 100k for a 500k house, and then pay 2200 mortgage, 800 in taxes every month. Minus tax, the expense per month is about 2200 + home maintenance. But it is your own home, your mortgage is fixed for life, and your taxes go up 5%, but your rent will also go up 4%. If you stay for 5+ years, it looks like it will pay off.

But it looks like there are not too many with excellent credit and a 100k in their bank nowadays.. so the dearth of buyers.

Well, I have excellent ....immaculate..credit, as does my wife, but we don't have anything close to 20% down for a house that we otherwise could easily afford (according to "conservative" mortgage calculations, 420-450K or so), and we'd barely break even on our condo if we sold it now, so that's one more buyer out of the equation.

[djdairyp]

Originally Posted by WJFM

Actually, I think the real killer are NOT the taxes. Agreed taxes are high, but prop taxes are completely deductible from income taxes, which softens them by 36% ( for the higher income bracket). The real killer is actually home-maintenance costs ( landscaping, odd repairs, etc). But that's because I hire people to do home maintenance.. if you do it yourself it might not be so high.

But the equation for owning is still attractive to someone who has excellent credit and income, has more than 100k in the bank, and is paying 3k a month on rent for a 4Bed house in Central Nassau. He can as well empty is 100k for a 500k house, and then pay 2200 mortgage, 800 in taxes every month. Minus tax, the expense per month is about 2200 + home maintenance. But it is your own home, your mortgage is fixed for life, and your taxes go up 5%, but your rent will also go up 4%. If you stay for 5+ years, it looks like it will pay off.

But it looks like there are not too many with excellent credit and a 100k in their bank nowadays.. so the dearth of buyers.

Renting a home for 3000k is definitely not going to compare, but if you take more average figures of a renter paying more like 1400 for an apartment, and all the savings they will have without a house, they come out on top even over 30 years.

[zulu400]

Originally Posted by WJFM

Actually, I think the real killer are NOT the taxes. Agreed taxes are high, but prop taxes are completely deductible from income taxes, which softens them by 36% ( for the higher income bracket). The real killer is actually home-maintenance costs ( landscaping, odd repairs, etc). But that's because I hire people to do home maintenance.. if you do it yourself it might not be so high.

But the equation for owning is still attractive to someone who has excellent credit and income, has more than 100k in the bank, and is paying 3k a month on rent for a 4Bed house in Central Nassau. He can as well empty is 100k for a 500k house, and then pay 2200 mortgage, 800 in taxes every month. Minus tax, the expense per month is about 2200 + home maintenance. But it is your own home, your mortgage is fixed for life, and your taxes go up 5%, but your rent will also go up 4%. If you stay for 5+ years, it looks like it will pay off.

But it looks like there are not too many with excellent credit and a 100k in their bank nowadays.. so the dearth of buyers.

You've got to be kidding me !!

People usually rent in order to save money to buy a house in the future ....

Paying $1500 for rent = dreaming to own a $400k house maybe.... thats how I can save and get as soon as possible to the 100k in the bank that you want as downpayment.

Paying $3k in rent = money wasted since you started to rent because you could have purchased the $400k house before you signed the lease if that was the house you wanted....

Usually renting $3k = saving to buy a $600k house maybe.

[Elke Mariotti]

Originally Posted by dman72

It'd be so refreshing to meed a real estate agent who doesn't lie.

They do exist !

[WJFM]

I was not able to find a apt with 2 bathrooms for below 2k a month in central Nassau (2007). Most one bedroom apts were being rented for 1500, and 2 bed 1 bathroom were 2k.

[zulu400]

Originally Posted by WJFM

I was not able to find a apt with 2 bathrooms for below 2k a month in central Nassau (2007). Most one bedroom apts were being rented for 1500, and 2 bed 1 bathroom were 2k.

Your assessment is fair, I think the apartment prices were around that in 2007, and during the same time the rents in Manhattan would have been 3-4k per month for a similar place.

I know at one point average house prices in Nassau was 500k and in Suffolk was 400k. Purely as a financial calculation I can see that your logic will be true if a person renting in Manhattan chooses to purchase a house in Nassau or Suffolk. And I think that would be true at almost anytime. Even now there are some run down areas on long island where you can get a mortgage for $1500 (same as paying rent in a different town).... so the bottom line is to "compare renting and owning in similar areas".

[Chrisk327]

the rent vs own calculation people should be doing is on comparable dwellings.
you shouldn't be comparing a small 1 br apartments rent to a 3 br 2 bath house. Wow the renter has more money at the end SURPRISE! I bet it works out in their favor too if they save every penny and live in their parents basement too.

Also, give me a break on 20K overpriced. You aren't going to buy something if you close yourself off like that then. Yes 20K is a fun weekend car, I have one. However, just because it is listed 20K higher than you want to pay doesn't mean you're going to pay it. You put in an offer, if the house is truely 20K or 50K or 100K overpriced, you have a shot and eventually it well sell for the lower price. There is almost always some room to negotiate. I looked at a house that was 100K overpriced when I first saw it. I lost to another buyer, but am guessing the offer was about 80K off of the price I saw it at.

On the flip side, aggressively priced houses are selling for close to list.

[Mantaray14]

House in the lower range (400k-500k) in good school districts that are not renovated starter homes or on main highways are still very tough to find on LI. If you come across one like that there will be some competition on it for sure. It's just because there are a lot of buyers in that range, even with the recession. Once you have 550k+, I think the market starts to open up for you - those are the homes sitiing on the market. You need 2 really great incomes to make that payment.

My wife and I spent years planning for our purchase. We almost rented again when we saw oceanfront 2 bedrooms listed for 2k, but they were not child friendly situations (we looked in Long Beach, because we owned a co-op there prior). So we found a 3B handyman in a good area and school district for 420K (asking 450). With 125k downpayment (we saved for 10 years), we financed 300k at 4.5% and our monthly payment is $1500 plus $850 in taxes (yes the taxes are KILLER). But $2350 a month plus utilities is not too shabby. We still have to dump about 30-40k eventually for a new kitchen and other renovations. But we plan on staying here for the long run. So yes it can be done, but you need that 20-25% downpayment. If you don't have the downpayment, your best hope is to find a great rental situation. If you do have the downpayment, you have the upper hand - search aggressively and you can do it - It's better than renting IMO.