First Time Home Buyer-Middle Class Income and even the starter homes are choking us. (New York: sales, foreclosures)

[ukikkgr]

This thread isn't a rant as much as it is complete, utter disillusionment. My wife and I in the midst of buying our first house and I'm feeling a little down by the entire process. We have no kids, however my mother in-law has MS. She can no longer live on her own and we had to make a decision to move her in or put her in a nursing home. We choose the former. We're both mid 30's, married three years and have been renting at $1500. Our combined annual income is $125K and we have very little debt. We have about $12K saved as a downpayment.


We've been qualified and been pre-approved for a mortgage for $380K at 6%. We're looking at houses in the $340-$370 range. No higher than $375K. However the town (where my mother-in-law lives)... and all the surrounding county all have suffocating taxes. We've found a great house... asking price is $349K. The mortgage we qualified for is more than within our budget... but even if we can bid them down... the taxes are not. $10,200 per year. I'm sick. Basically a $1000 per month added to my $2300 mortgage payment. Looking into the property the Fair mkt values was assessed at $490K. In three years not a single home on that street has sold more than $375K.

I don't understand, nor do I comprehend how anyone can afford to buy in parts of the Northeast where taxes make up more than 1/3 of the mortgage payment. Even with a meager STAR deduction it puts our monthly payment to what I would be paying for a $550K home. My parents are looking to move to Tennessee. We don't have family there.... we don't have friends there. My parents paid off their house three years ago. Yet the are still left with a $7200 tax bill (on a $300K house... one of those outdated bi-levels.). Property tax in Tenn on a 2500 sq ft home new construction with 1 acre... $900 per year.

I'm willing to lower my budget and expections... I can look for houses in the $300K range... most of which in this area excludes new construction. Mostly homes that are 20-30 years old, shoebox bi-levels with outdated kitchens. I'd rather call it a day and rent a condo. Is buying a house such a great investment when I stand to spend nearly 10% of my gross income a year on property tax?

[sgc from LI]

I could not agree with that post more ...
Let me just give you my personal strife over the last 3 years of home ownership -
I purchased a home in North Woodmere in the summer of 05 for just under $500K. at the time of closing the taxes were $8200, then we were reassessed 3 months later and the taxes rose to $9600. Last summer, again we were reassessed and our taxes rose to $11K. I just received a new tax statement saying that next year my taxes will be nearly $13K.
So , in less than 3 years my taxes will rise $400 per month, while they claim that my house is now worth $675K I totally doubt that because the last 3 sales in this section sold between $525K and $600K

Again , this is just one example but I'm sure it's fairly the same all across Nassau county.Now the assessment board is denying all reevaluations that are filed so they are in total control of all increases with no retaliation

Good luck with your search, I am retiring in 7 years and was hoping to move to N.C. but my wife earns a "more than decent living" and cannot be transferred so the debate will begin soon and I am sure I will lose LOL

SGC

[ukikkgr]

I am seriously wondering whether we should just continue to rent. Isn't that a little ridculelous to consider? We're both early to mid-career, college graduates, little debt and we make nearly twice the median income of the county we live in and I'm choking on a $3200 monthly payment of which $900 per month is pure taxes. In 10 years of home ownership I will have paid more than $100K in just property taxes... that's more than I currently make in a year. I understand some homeowners will read this and think 'stop crying about it.... I'm paying it!" My dad has complained about taxes in NY since the day I was in diapers. But in all seriousness something very disturbing has happened on a local level in the last five years that spells economic doom for the Hudson Valley if not most of NY. Home prices coupled with increased taxes and out of this world assements have not only priced life long NY'ers out of buying a home... but are pushing existing homeowners toward a foreclosure cliff. The homes we are looking at are all pending foreclosures and they are all relatively new construction (5 years or less). And yes I blame the state and local governments. I can afford to invest in a $2000 a month mortgage... however I can't afford to throw away $12K per year in taxes and other fees that I certainly won't recup with deductions (remember personal income tax is still significant %).

[sgc from LI]

One more thing that I neglected earlier -

We moved to this area because we planned on starting a family and this a top rated school system (it is also convenient for my wife and myself for work) but with the massive increase in taxes we cannot even think of trying to have a family .Who would watch the child , we have no money for childcare and absolutely cannot live on one salary (our earnings are in the $175K range)....so , we now pay almost $7K annually in school taxes which we will never use . Think of this , in the time we will stay here ..probably 15 years .. we will pay close to $200K in education and use "0". There has got to be something we can do , but I have not found it as yet

[jdhall1]

Depending on where you work, western CT might be an option. A lot of people that can't take the NY state taxes cross the border and the property taxes are signifantly less. Good luck!

[inpd]

Originally Posted by ukikkgr

Tthe taxes are not. $10,200 per year.

Ouch. My taxes in Albany for a $300K home just got upped from $4500
to $6500.

Can't you fight the assessment? Originally our taxes were to be $8,000 and
we said no way. Most places have a procedure for fighting assessments
particularly if you just got unlucky.

Good luck!

[nucemgd]

I think it's obvious that renting is a better option right now

maybe not in a few years but definitely right now

everyone is doing the math and saying why should I pay this? what is going on? I'm going to struggle with the payment

sounds like there's really no question is there but people still stress because we think we HAVE TO DO THIS! We have to buy!!

eff what everyone else thinks, you've answered your own question

[inpd]

I'm going to get flamed for this, so I'm donning my flame
retardant suit

I lived in Albany, NY. My property taxes were $4500 and got
upped to $6500 last year. I now live in CA and will pay
about $4000-$5000 in taxes. CA's better right? Wrong.

I feel that CA home owners get ripped off much more than NY.
The reason is that in CA your taxes get your knowing nada.
Everything cost money. Here are a few examples.

When I lived in Albany. Each week there would be a free
concert in the Rockerfeller Plaza, Plays in Parks, Ice
skating rinks, state museum was free to enter etc.
In CA none of this is free even though they are state
run! I went down to do some ice-skating. Guy asks
for $6 for 2 hours! Also, there are no free or otherwise
concerts in Sacramento.

Now maybe its just Albany, but you got
a hell of a lot for your taxes. Here in CA you get nothing.
I mean nothing. Even the schools you have to indirectly pay for.
Elementary school times here are 8am-2pm. Now getting there
exactly at 2pm is tough, but the teachers will not look after the
kids a minute after 2:05pm. Instead, you can buy an after
schools program for $400 per month that will baby sit them
uptil 3:00pm. Who does the babysitting? The school and its an
indirect tax.

Having said all that 10K is a bit too much, but I'd rather
pay my $6500 and not be nickel and dimed on everything
else or not have the services to begin with.

[ukikkgr]

Originally Posted by inpd

I'm going to get flamed for this, so I'm donning my flame
retardant suit

I lived in Albany, NY. My property taxes were $4500 and got
upped to $6500 last year. I now live in CA and will pay
about $4000-$5000 in taxes. CA's better right? Wrong.

I feel that CA home owners get ripped off much more than NY.
The reason is that in CA your taxes get your knowing nada.
Everything cost money. Here are a few examples.

When I lived in Albany. Each week there would be a free
concert in the Rockerfeller Plaza, Plays in Parks, Ice
skating rinks, state museum was free to enter etc.
In CA none of this is free even though they are state
run! I went down to do some ice-skating. Guy asks
for $6 for 2 hours! Also, there are no free or otherwise
concerts in Sacramento.

Now maybe its just Albany, but you got
a hell of a lot for your taxes. Here in CA you get nothing.
I mean nothing. Even the schools you have to indirectly pay for.
Elementary school times here are 8am-2pm. Now getting there
exactly at 2pm is tough, but the teachers will not look after the
kids a minute after 2:05pm. Instead, you can buy an after
schools program for $400 per month that will baby sit them
uptil 3:00pm. Who does the babysitting? The school and its an
indirect tax.

Having said all that 10K is a bit too much, but I'd rather
pay my $6500 and not be nickel and dimed on everything
else or not have the services to begin with.

Hope that suit fits well (lights flamethrower).

I love Albany, and the entire Capital district. It's a beautiful area, experincing a financial rebound and a renaissance of art, culture and good taste. A far cry from where it was 10 years ago. Although I'm not sure if you could even connect the significant raise in taxes verses the improved standard of living over the course of 10 years. The area has improved largely because of tax breaks Pataki has gave companies to be able to rebound the economic climate in the capital district. And I won't argue over those breaks... they were neccesary to revive a dying city... but who is making up the shortfall. Taxpayers. Less state aide to schools... raise taxes. A bond is passed building a new roadway... raise taxes. Where are my services in my local municipalities? Do I get free ice skating and free concerts in my local parks? How is that an indicator of efficient taxation? If raising taxes were the 'absolute' of an improved standard of living then why is so much of the Northeast in so much trouble... and cities like Charleston SC, Chattanooga, TN and Roanoke, VA where taxes are significantly lower, considered some of the nicest places to live in the country. And I don't mean to pry... but who in their right mind would move from NY to California (both the top ten most expensive states in the nation)and expect to be cut a 'break' on the cost of living. My company is based in the Bay area and I have turned down three job transfers, because they weren't offering enough in pay.

If you really feel that as an Albany resident you received alot for your property and personal income tax then I have to imagine you haven't traveled much beyond NY and California. Colorado, Tennesse, North Carolina, Georgia all offer property owners all provide property owners with a decent standard of living, an affordable tax assement without denying basic services to schools, roads and municipalities.

I hope I didn't beat you up too much. Comparing Albany to Sacramento is like comparing NY to San Fran. Both will be out of price and out of touch with the middle class.

[ronstack]

Home affordability is at an all time record high! Prices are down and rates are at a record low. Many New Yorkers buy in PA and commute. You will probably get a lot more home and lower taxes.