Does living in NY mean you'll never be able to buy a home? (York: private schools, subsidized)

[BKATL]

Originally Posted by NewYorkBorn

To each his own, I wish you happiness wherever you end up. For sure NYC has way more to offer as far as career choices and job diversity. Bottom line is there is going to be a trade off no matter what......we can not have it all. You mention taking a pay cut......that was the first mistake.......wish I would have known you would have told you never come to the south if you have to take a pay cut......job diversity does not exist down here, they are too dependent on a few small industries and yes the pay sucks down here if you are someone who is born, raised and then stay in the south but that is another topic. If the company would have even mentioned the word pay cut to me there is no way on earth I would have ever moved to the south. Life in the south without a good paying job is misery..........life in any city without having a good paying job is misery.

You should stop by the Greenville, SC forum.........I am having major arguments with them on this same topic.....we are arguing about the fact that job opportunities are not plentiful in the south. They just refuse to accept the truth that the south has a long way to go as far as pay scale. As far as housing the south is still the place you can get more bang for your dollars.......although I would recommend people considering moving down here to have their own business.......job opportunities suck down here!

I couldn't agree with you more, I should have never left my job. This was a major mistake on my part, but you live and learn sometimes the hard way. This is the only regret I have, but that's the past and time for plan B on a more strategic level. No need to rush this time!

[homeowner35]

Originally Posted by bluedog2

I think you missed my point.

I bought my apt a little over a year ago.With the tax deductions I was better off as a buyer from day 1. With the lower payments that will come with the refi I will be much better off . I don't have to wait at all for the break even point you are talking about.

There is another apartment in my building right now that you or anyone could buy tomorrow from the sponsor for around 160,000 with 10% down or rent for $1,200. There is also a studio that is for sale for 95,000 that you could either buy for 85 or 90 or rent for 950/mo.With these numbers and the interest rates as low as they are you are in the better position owning right away.

I know that this is not the situation everywhere and there are places where it might be better to rent.Those places had a real estate bubble. My point is that there is no one NYC real estate market or one regional RE market anywhere.No matter what is going on in the country or in any area there are always situations where things are different.You can't generalize.

I totally agree. In my case, owning is also cheaper than renting. I visited Kew Gardens a few months ago and I really liked it. Do you know anything about Georgetown Mews?

[NewYorkBorn]

Originally Posted by BKATL

I couldn't agree with you more, I should have never left my job. This was a major mistake on my part, but you live and learn sometimes the hard way. This is the only regret I have, but that's the past and time for plan B on a more strategic level. No need to rush this time!

One thing is for sure........not sure what type of work you do but NYC seems to be (based on looking at the online job databases) hiring at some good companies. Never know........I don't like what I am seeing with this job market here in the south.........my family and I may be doing a housing swap and I may be going back up to NYC to work too! Grandmother lives in the Bronx (she is retired) she may move down here which is better for an older person and I will live in her apartment in the Bronx. That is the best way to relocate to the south......make that NYC money........live with family if possible.........save as much money as you can......then take that money to another state where you can get more bang for your buck.

[PerpetualDreamer]

Originally Posted by NewYorkBorn

.make that NYC money........live with family if possible.........save as much money as you can......then take that money to another state where you can get more bang for your buck.

I agree, this is why it made much more sense for us to rent. Save tons of money (since you are getting the same place for half the price of ownership), prepay your house elsewhere especially when you can also rent it out to cover your mortgage. I agree, there are some areas in NYC where the bubble effects are not felt as much and where rent/mortgage ratio is much more reasonable, unfortunately, areas we are interested in are not like that at all. They are super inflated and buying into this market is not only much more expensive than renting, it's also risky given that the prices may go down even more and when you will be able to recoup the difference you'd have to have lived here for 10-15 years. For us it would be taking much more risk we were willing to take since nowadays job markets tend to be less stable and require people to move place to place more often than not.

[mathjak107]

just a heads up on a few missed details when doing your comparison and crunching numbers to see what the difference is between renting and buying initially

dont look to the tax deduction to make things work in favor of buying.... everyone gets the standard deduction whether you rent or buy so all calculations start after that point..that means the first 11,400.00 in mortgage interest and real estate taxes dont count if your married .....the renter gets the same 11,400 as the homeowner ...

your interest deduction becomes less every year as you pay less and less interest

the big wild card is your tax bracket , for those in lower brackets the writeoff may be around 5% or so after deducting out the standard deduction , not that 30% number the realtors talk about assuming your in the highest brackets.

more and more of america is getting hit with the amt tax (alternative minimum)....if you are then you may end up with nooooooooooo deductions at all ..your on a flat rate tax period.... we got hit in 3 out of the last 5 years with the amt..... one year we sold one of our co-op properties in manhattan so the gain triggered it,,,,the following year because we paid so much in state and local taxes on the sale the tax deduction on those local taxes again triggered the amt tax.

also if your home dosnt go up much and you sell, nyc and the boroughs have very high closing costs ... if you need a broker to help sell, a lawyer, nyc transfer taxes, ny state transfer taxes as much as 10% of the sale price will go bye bye in fees..

if you didnt appreciate much when you sell you could be in the hole for 10% of the entire purchase price plus the approx 3-5% closing costs when you bought and this could eat up and loose your entire down payment and then some more money in just closing costs on the buy and sell...


to be forewarned is to be forearmed...

[Elvira Black]

I live in a "bad" area of the Bronx, but the coop is gated (not that this guarantees absolute safety), but last year they hired a very good management company and knock wood improvements are continuing and the staff, the grounds etc are maintained beautifully.

NYC was not hit with the same degree of housing decline as other areas of the country. My coop actually went up about 10 percent in value over the past two years.

I checked out some coops in Riverdale recently and because of the price decline there are some amazing deals to be had, as prices have dropped steeply. I also hear that Pelham area is good as well.

In addition, one realtor specializes in apts turned coop on the Grand Concourse. He says that many people who never thought of the Bronx are amazed at the large square footage and reasonable prices, esp in prewar buildings with great detail etc.

I see a commercial all the time about Flatbush Gardens which seems like a good deal rentwise...same for Parkchester, where you can rent or own at a very reasonable price. The area has tons of great shopping, restaurants etc.

Every year there's a big skirmish re: the rent guidelines board and folks who've lived in Manhattan on rent control forever. It's a bit hard for me to sympathize with them since they seem to feel that they are entitled to live in Manhattan though they don't own there. There's apts in other areas that are still affordable, and anyone who doesn't own should not assume that they will continue to enjoy a rent controlled bargain forever. I remember decades ago, everyone I knew had a horror story about a landlord trying to buy them out or throw them out of their rent regulated building. Now that Manhattan is a playground for the rich, the only way to keep a toe hold there (or IMO anywhere in the 5 boros) is to try to buy into a building with good financials.

From what I hear though rentals are much more plentiful and reasonable because of the economic downturn. In fact, don't know if anyone heard about the building that was supposed to be a luxury condo but would up being used to house the homeless because the owner couldn't get buyers. Was in the news and was quite a shocker....

My opinion is that if you really want to live here for the long run, owning is the way to go...get an affordable more modest place to start with if you have to, and trade up with your equity later if you need to. Anyone without a little piece of property, here or anywhere, is vulnerable to the vagaries of the marketplace/economy.

[mathjak107]

the vagaries in new york for renters really is pretty stable... the city dosnt have the huge real estate tax swings the other areas do and rental increases even on unstabilized apartments have been around 3% for the last 2 decades ..... while everyone thinks your at some landlords mercy the numbers usually fall out about the same year after year except if it was an area that went thru a transformaton ..... long island city, williamsburg and parts of harlem come to mind but usually those areas were below the other areas to start with

i think i mentioned we rent in a building in bay terrace....if we bought our apartment it would be over 300,000 bucks.... our rent is covered just by the interest we get on some municipal bonds on that 300,000.... we would still have to pay an additional 900 a month or so in maintaince if we bought.... our savings by renting is over 900 a month.... that pays a decade or more of rent increases.. if you invest the 300,000 and the 900 a month in index funds the odds are you would probley have enough over time to buy two apartments in time

[Elvira Black]

Nice work if you can get it (lol) but most folks don't have that kind of asset portfolio. However, I do think the trend is still towards steady increases in leases (never heard of a decrease if one is already living there) and I believe owners can opt out of rent stabilization at $2000/month...which they can get to more easily by harassing/witholding services and/or "renovating"/doing capital improvements.

Also the laws favoring tenants' rights have decreased drastically in the past few decades...used to be hard to evict a tenant even if they didn't pay their rent for months. Now especially with the powerplay in Albany, new legislation to protect tenants has been stalled or denied, so IMO the sky's the limit.

Yes, there are some folks who can afford to rent, even in high rent/luxe buildings, and perhaps the increases are modest. In addition, some coops that are not well run may have unreasonable maintenance increases...so IMO it's good to check the financials of a bldg before attempting to buy in.

However...a coop is generally a good investment and there's nothing like owning a piece of the pie. If you decide to sublet, for instance, you can get additional income which may exceed your monthly maint and get you some nice money to, say, travel and have the income pay for the expenses. My coop requires subletters to pass the board approval so you probably won't get stuck with a deadbeat subletter.

I also think this is an excellent time to buy if one has the bucks...it's been a buyer's market and others' loss is unfortunately for them a buyer's gain. The market's almost bound to recover to some degree in future, and I heard that new construction is actually increasing.

Of course, there's no crystal ball; with events in the world so unpredictable I don't even want to consider worst case scenarios. Also the nonsense in Albany may plunge the city into even more dire financial woes, so rentals may continue to be a relative bargain as they seem to be now (for some people).

But Kudos to the previous poster...obviously you are a good investor and have fabulous options available to you, and you've done your homework.

[mathjak107]

one thing i think history teaches us is that all markets left to their own devices eventually like water seek their own proper level... humans love to take a thought or prediction and use it as support for how they want things to turn out....renters would love property values to crash,,, home owners would love property values and rents to soar so they feel they did the right thing.... the reality is no one knows but the markets already have their own agenda and will eventually find the right level....
i think the bottem line is that both situations can be winners and both loosers.....

the renter who has the money to buy but instead rents and dosent invest that money elswhere that hes not spending in a down payment or each month will be a loser......

the homeowner who ties all his money up in a home and has no other savings vehicle going may also be a looser, as home appreciation historically is puny ,about the same as a treasury bill except its full of minefields of expenses... they will be losers..... the amount the home appreciates even after selling it and retiring elsewhere may not be enough to live a comfortable retirement...

the fact that a home when sold at the end of the game is worth something may not be the piggy bank you need if you thought your home was going to be your piggy bank to great riches...


we sold our home in kew garden hills which i bought in 1987 for 165,000 and got 335,000 for it a few years ago just as the run up began....... that same amount put in diversified index funds and left to grow over the same time frame was worth over 1 million. enough to buy 2 homes today even after subtracting out the rent you would have paid over those years....


the answere to the entire question as to which is better is both, and neither...it all depends what you end up with at the end of the game when you are ready to enjoy retirement. buying or renting are just a small part of the big master plan for funding your retirement later on.... they are both a means to the same ending.... you need either a great pension or a pile of cash and a place to live...dosnt matter how you get there, either road will get you there or make you a casulty in the failed retirement graveyard

[Forest_Hills_Daddy]

There are a some things that could be done to ease the burden of owning property in the NYC metro area. Among others:

1) Exempting suburban homeowners who send kids to private schools from paying the public school portion of the property tax.

2) Improving mass transit across the Hudson River, especially for people in Rockland and OC who simply want to catch the Metro North in Beacon or Tarrytown.

3) Allowing clusters of high rise residential buildings with family-sized floorplans in strategic points along commuter rail or bus routes, with space set aside for parks and recreation.

4) More near-suburb express bus services to Hoboken and Marcy Ave.