Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've only been in my career for 2 years, I'm 25, and just bought a house on Long Island (10 miles outside of Queens). No help from my parents or my fiance's parents.
I also have a teacher friend who owns a 2 bedroom apartment on the Upper east side.
did you buy the home with your fiance? It's a lot easier on 2 incomes than 1.
It will be difficult but it can be accomplished with discipline and realistic expectations. NYC is really designed for two income households. Many single people are purchasing studios believe it or not. It is the new one bedroom.
I bought my co-op for $130k on Long Island...put 20% down (roughly $26,000)- I pay $606 a month. My friends who rent? They pay double that.
true but if u think about it you down 26k, so u dont actually come uout paying less than them untill a ltittle under 3 years 43 months.26k / 600 43 months.
The median home price in southern California went from around $240,000 in 2002 to $500,000 a coupla years back, during the peak of the bubble, and is now down to a bit under $250,000. A decline of over 50%.
When speaking of the "unaffordability" of NYC, let's not forget that we've lived through the biggest real estate bubble in history, and unlike in California, NYC's bubble has only just started to implode.
Modest homes in middle class neighborhoods in, say, southern Brooklyn that used to be sold for half a million in 2007, will be selling for 250 grand at the most, and should the recession drag on, likely for less, in 2010-2011. Such is the fate of all market bubbles.
California is different. There were areas of $500k homes that were next to vast stretches of flat valley farmland. Something had to give, when plenty more houses could be built at a fraction of the price that people would pay for them. (same with Phoenix, Florida, etc)
Houston grew, but didn't have this problem because their regulations are lenient - developers could respond to demand and build new homes much more quickly - preventing a bubble.
But in the NYC metro, practically everything is built up, all the way to Pennsylvania and the Hamptons. And the zoning laws are very strict, so supply cannot respond to demand by building more dense housing - instead it leaves the current housing to the highest bidders -- and there are a lot of bidders! Similar to San Francisco... any place that has renting costs this high is not going to have affordable housing prices. Not that prices won't come down a bit, but I doubt they'll come down to the degrees seen out west.
California is different. There were areas of $500k homes that were next to vast stretches of flat valley farmland. Something had to give, when plenty more houses could be built at a fraction of the price that people would pay for them. (same with Phoenix, Florida, etc)
Houston grew, but didn't have this problem because their regulations are lenient - developers could respond to demand and build new homes much more quickly - preventing a bubble.
But in the NYC metro, practically everything is built up, all the way to Pennsylvania and the Hamptons. And the zoning laws are very strict, so supply cannot respond to demand by building more dense housing - instead it leaves the current housing to the highest bidders -- and there are a lot of bidders! Similar to San Francisco... any place that has renting costs this high is not going to have affordable housing prices. Not that prices won't come down a bit, but I doubt they'll come down to the degrees seen out west.
I'd have to disagree with you there. However we'll see with Williamsburg, which will pretty much be out test model for other neighborhoods in the city with similar problems (FiDi, Downtown Brooklyn, LIC) where there is this gut of projects that are slated to be completed this year or next.
although we call a home an appreciating asset its part of a much larger picture called your overall housing costs... because you live in it these costs are all paid by you and accumulate over a lifetime unlike rental property or investment property which you pay off the income . . the rise of the house in value over time merely offets the giant lifetime expenses of all the costs a homeowner has for the priveledge of owning that home..... your taxes, mortgage interest, repairs,renovation,maintaince,landscaping,insuranc e ,the gardner,the snow plow guy, the list goes on and on.
a lifetime in housing costs are really measured in who lost the least the buyer or the renter, not who made the most as those expenses whether you rent or buy usually eclipse the value of home appreciation over a lifetime. it never stops accumulating even if you sell a home and buy another... like rent just keep adding it all up over a lifetime.
soooooooo if your buying a house think of it as a consumption item, not an investment, think of it as a collector does of fine art, or your jewelry. its something you use and consume and costs you money. the fact a home rises may or may not mitigate the expenses to put you ahead of renting
buy a home for all the things a home can give you (good or bad)
the joy of owning something
doing as you please
the security of owning a payed off home
relatively fixed costs compared to renting
the fun of renovating and changing
etc
while technically a renter appears to be at a dis-advantage because hes not buying anything with his rent that may not be true in alot of areas or situations . here in the greater new york area the cost between renting and buying initially is 1/3 to 1/2 less a month and no massive down payment... it takes about a decade for the rent to equal the costs of buying at the 2 to 3% a year rent increases. each year though the renters advantage grows smaller and smaller as the rent goes up . all though just real estate taxes in alot of areas see bigger jumps the costs are offset with tax deductions on some expenses so its all about what the renter did with the money saved each month and down payment money that determines most of how a renter does.
you cant compare renting vs buying unless you have the renter putting equal amounts of money as well into an appreciating asset. thats where most comparisons fool us, they rarely do this. historically equities have outpaced home appreciation by 2x with alot less expenses in the early years of renting.
i can tell you because home real estate appreciates long term just above the rate of inflation in most markets a person who invests the money he planned to buy with and the money he saves each month compared with buying in nothing more than a mix of diversified index funds stands a great chance of coming out further ahead ...
infact i can say with my own expierience that if you were going to pay cash for the house like i did when i bought my house back in 1987 in queens ny and instead put that money in that same mix of funds (i did that also) i can tell you that today you can subtract out all the rent you would have paid for all those years and still have enough left to buy over 2 houses .....
you have to take a step back and stop looking at just one aspect of your overall cost of housing which is where everyone fixates THE HOUSE
and look at the total costs over a lifetime to know if you spent less renting or buying..... chances are they both cost you and took money out of the ole piggy bank and not made you richer .... housing costs are like food costs, they are expenses not gains
for a eye opening idea of expenses look at only 2 of the many components of expenses a homeowner has , taxes and mortgage interest,,, those two alone usually need the house to appreciate at least 3x and probley more in 30 years just to clear the after tax deduction amount you paid in...
most people pull out one piece of the puzzlel the house cost and what its worth without looking at the big picture namely a lifetime of housing costs and merely look at one aspect without the other parts... since we dont know how much future appreciation will be, we dont know rent increases, we dont know your future expenses or how many times you will sell a house and buy another and incurr more costs there is no answer.. in fact the biggest part on the renters behalf who chose to invest else where and rent is we dont know future market returns..... your trying to predict an outcome thats impossible... we dont know who will spend more in housing costs when all is taken into consideration.
picture it as if you were an investor.. you made big bucks on one investment (the house) but all your other investments tanked.... overall your down , the big gains of the one investment merely mitigated the overall loses
the jury is still out as far as whether the age old debate, is it better to buy or rent financially ?... there is no answer and probley never will be
although we call a home an appreciating asset its part of a much larger picture called your overall housing costs... because you live in it these costs are all paid by you and accumulate over a lifetime unlike rental property or investment property which you pay off the income . . the rise of the house in value over time merely offets the giant lifetime expenses of all the costs a homeowner has for the priveledge of owning that home..... your taxes, mortgage interest, repairs,renovation,maintaince,landscaping,insuranc e ,the gardner,the snow plow guy, the list goes on and on.
a lifetime in housing costs are really measured in who lost the least the buyer or the renter, not who made the most as those expenses whether you rent or buy usually eclipse the value of home appreciation over a lifetime. it never stops accumulating even if you sell a home and buy another... like rent just keep adding it all up over a lifetime.
soooooooo if your buying a house think of it as a consumption item, not an investment, think of it as a collector does of fine art, or your jewelry. its something you use and consume and costs you money. the fact a home rises may or may not mitigate the expenses to put you ahead of renting
buy a home for all the things a home can give you (good or bad)
the joy of owning something
doing as you please
the security of owning a payed off home
relatively fixed costs compared to renting
the fun of renovating and changing
etc
while technically a renter appears to be at a dis-advantage because hes not buying anything with his rent that may not be true in alot of areas or situations . here in the greater new york area the cost between renting and buying initially is 1/3 to 1/2 less a month and no massive down payment... it takes about a decade for the rent to equal the costs of buying at the 2 to 3% a year rent increases. each year though the renters advantage grows smaller and smaller as the rent goes up . all though just real estate taxes in alot of areas see bigger jumps the costs are offset with tax deductions on some expenses so its all about what the renter did with the money saved each month and down payment money that determines most of how a renter does.
you cant compare renting vs buying unless you have the renter putting equal amounts of money as well into an appreciating asset. thats where most comparisons fool us, they rarely do this. historically equities have outpaced home appreciation by 2x with alot less expenses in the early years of renting.
i can tell you because home real estate appreciates long term just above the rate of inflation in most markets a person who invests the money he planned to buy with and the money he saves each month compared with buying in nothing more than a mix of diversified index funds stands a great chance of coming out further ahead ...
infact i can say with my own expierience that if you were going to pay cash for the house like i did when i bought my house back in 1987 in queens ny and instead put that money in that same mix of funds (i did that also) i can tell you that today you can subtract out all the rent you would have paid for all those years and still have enough left to buy over 2 houses .....
you have to take a step back and stop looking at just one aspect of your overall cost of housing which is where everyone fixates THE HOUSE
and look at the total costs over a lifetime to know if you spent less renting or buying..... chances are they both cost you and took money out of the ole piggy bank and not made you richer .... housing costs are like food costs, they are expenses not gains
for a eye opening idea of expenses look at only 2 of the many components of expenses a homeowner has , taxes and mortgage interest,,, those two alone usually need the house to appreciate at least 3x and probley more in 30 years just to clear the after tax deduction amount you paid in...
most people pull out one piece of the puzzlel the house cost and what its worth without looking at the big picture namely a lifetime of housing costs and merely look at one aspect without the other parts... since we dont know how much future appreciation will be, we dont know rent increases, we dont know your future expenses or how many times you will sell a house and buy another and incurr more costs there is no answer.. in fact the biggest part on the renters behalf who chose to invest else where and rent is we dont know future market returns..... your trying to predict an outcome thats impossible... we dont know who will spend more in housing costs when all is taken into consideration.
picture it as if you were an investor.. you made big bucks on one investment (the house) but all your other investments tanked.... overall your down , the big gains of the one investment merely mitigated the overall loses
the jury is still out as far as whether the age old debate, is it better to buy or rent financially ?... there is no answer and probley never will be
one of the best posts i have ever read on here.....anybody who thinks that owning a home is automatically better than renting should read this....this is the reason i bought a co-op apartment, i changed my mind on buying a house.
__________________
"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
