Considering a home purchase in NYC/LI/Westchester County (Long Beach: real estate, apartments)

[likeminas]

Good afternoon;
We're a young couple (early 30's) with no children. We currently live in Astoria, Queens. Recently we both got new jobs, and our combined salary considerably increased from last year, so we were thinking that purchasing a home might be the right move now. We currently pay $1,500 in rent for a 2br(jr) in a private house.

We have about 30k in savings that could be used for a down payment, we have very good credit scores, and currently have no debt of any kind. Our gross combined salary is 120k a year. We really would like a house, but would certainly consider an apartment for the right price. We're thinking that a good range would be 300-to-400k in total value.

What places in Westchester, Long Island or Queens can you recommend considering the circumstances?

Due to my (city) job I can only live in NYC and surrounding counties, so NJ is out the equation for us.

Thank you for your insight and help!

[likeminas]

Areas that seem to fit our criteria

in Queens: Forest hills, Kew gardens, Rego Park, Astoria

In Brooklyn: Windsor park, Keningston, Bay Ridge


I'm not too familiar with areas outside the 5 boroughs so in Westchester I've read
Pleasantville, Chappaqua, Mt Kisco, Parts of White plains.

In Long Island, we like Long Beach, but we're not too familiar with it either.

[varan]

This is my bias, but I just don't think 30K is enough for a 300-400k house. Even if you don't do 20% down, even if you qualify for a 3.5% down type loan through the government, that's half your money gone even before closing costs. Maybe other people are more daring, but we're the same age (early 30s) and only acted when we had more in the bank because having no backup made me nervous.

Other people can give better info on specific places, especially westchester and long island (I know, though, that places like Bellmore and Wantagh probably have houses in your range, though the Long Island forum might be better for that). I'd be surprised if you could get a house for 300-400k in Astoria. How much are you willing to commute?

[DitmarsNY]

yeah, 30k seems too low. Banks are a lot stricter now and unless you have 20% I don't think there is any chance. Also closing costs (on a house, maybe not so much on condo/coop) will eat up most of that 30k.
Also 300k-400k will not go far in purchasing a home in the NYC area, can't speak for areas outside NYC, but some of them have really high property taxes. I noticed you live in Astoria, maybe look at the condos they have in "upper ditmars", they seem closer to a home than a condo in a building

[likeminas]

yes, the down-payment might a problem. I wasn't sure if it could be done with that much. We actually have about 40k in savings but perhaps due to the same reasons you mention, we would be only willing to put down up to 30k.

Currently our commute is like 30 mins but we're willing to commute up to 1hr (1 1/2 hrs tops).
And I agree, houses in Astoria (since most are 2 fam anyway) go for well over 400k. But like I said, we're also open to purchasing an apt, so those could be less expensive.
Wifie is kinda tired of the NYC lifestyle so a change in the suburbs would be a freshing change.


thanks for your reply btw.

[varan]

Yeah, I mean I hate to be discouraging, but we just had to put 25% down for our recent (coop) purchase and even so the bank was very difficult. If I was you, I would wait till I had 60-100K in cash. Stinks, but that's life in 2012.

Of course, if you feel like becoming landlords, one answer is to buy a two family and rent out a floor, but that's a lot of work and you still need the down payment cash.

In any event, it doesn't hurt to start looking now. Go to open houses in NYC and in the suburbs and see what you like better.

[jad2k]

As many others have pointed out, the down payment is going to be a problem. Unless you find a building that has FHA loans and allows you to put down 3.5%, you wont be able to swing much, if anything in the NYC area with $30K down. Some co-ops allow as little as 10% down, but even then, you wont have enough since you're considering $300K + properties. NY is a very hard area to buy in if you don't have a large cash reserve for the down payment.

Having just made the NYC real estate plunge, for the second time, I recommend:

1) You need to save more cash, especially since you'll have things like closing costs and the actual cost of moving to handle on top of the down payment. Give yourself a year of "hard core" saving to come up with more cash (or get a gift, if that's an option).
2) Consider places that offer FHA loans but these are new developments (I think exclusively) and new construction has MUCH higher closing costs. Closing costs on new construction are about 5% of the total cost so if you are looking at a $400K place you have to also fork over and additional $20K in closing costs alone.
3) This might be an unpopular suggestion, BUT, you may want to consider "up and coming" areas since you will get much more value for you dollar. Or areas that have a history of safety but are "undiscovered". This is one of the reasons why I ended up buying in Pelham Parkway ("undiscovered") 8 years ago and Bed-Stuy ("up and coming") last year.
4) As someone pointed out, property tax in Westchester is very high. My mother pays something like $30K a year in property tax that's why the co-op option might be the better choice.

[likeminas]

Thanks for the replies guys.
When I lived in Kew Gardens (Queens) in 2007, I saw some 2 br co-ops going for ~250k
I really don't wanna be a renter for much longer, it feels somewhat depressing to have to pay $1,500 in rent every month knowing that, it could instead, be going to build some equity.
I will follow your advice on the hardcore saving plan though. I think that's very important.

[bellakin123]

Don't put that kind of money into a condo or co-op. They are so hard to re-sell. Buy your own home or maybe look into townhouses. As for the down payment, I bought my house 3 years ago and we did 3%. I was able to put my closing costs onto my mortgage. It wasn't a big deal. We got an FHA and submitted paperwork to no end. Even if you put more than $30k down, you'll still be under scrutiny when applying for a mortgage. Go for it while you have the momentum. I can't tell you how many times my husband and I backed out of buying a home. This time we buckled down and did it. We're originally from Queens but we found the areas we liked were too pricey and hardly had property. We ended up moving to Franklin Square. The taxes are not that high and it's a great school district. Although you don't have children now, if they are a consideration in the future, you may want to purchase a house in a good school district. You don't want to be paying $6k a year in taxes then pay for private school. Good luck!!

[jad2k]

Originally Posted by bellakin123

Don't put that kind of money into a condo or co-op. They are so hard to re-sell.

This is absolutely NOT true. Especially in NYC where condos and co-ops are almost the norm. If a condo/co-op is hard to re-sell it's because of the down market). I can think of a few reasons why one might prefer a house over a condo/co-op but there is a big market for both types of buyers in this area.

I've heard the argument that studios are hard to re-sell...but even that argument I don't buy because there are always going to be [single] people just starting out that are looking to buy "starter" apartments.