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Deals are becoming more available as prices drop for ture starter houses like those. Taxes are still high though, averaging $7K to $8K for these small houses.
7-8k is high?
Maybe in the 90s
Sadly, I think if youre under 10k in a decent house on LI ...you're ahead of the game.
Sadly, I think if youre under 10k in a decent house on LI ...you're ahead of the game.
C
Tax rates with STAR in my old neighborhood were in the $8K range for a standard cape. Still that is 10% of pre-tax income going to property taxes right off the top.
Tax rates with STAR in my old neighborhood were in the $8K range for a standard cape. Still that is 10% of pre-tax income going to property taxes right off the top.
Im not defending it...the reality is that salaries have not kept pace.
Im not defending it...the reality is that salaries have not kept pace.
You can stuggle on 100k plus here.
Sad
C
True. I was around that range with one income. While we were not stuggling since I purchased in 1995, saving for anything like retirement, 2 college funds and a decent vacation (not a Disney extravaganza) every other year was difficult. I'm not sure how someone with the median salary on LI will be able to keep pace when taxes take about 10% of their pre tax income. Relying your home as a your major retirement asset can be risky if when you need to retire real estate is in a down cycle.
Again, for someone looking in Nassau County, or someone working in NYC, these areas don't help much. Lots of homes in questionable areas under $400K in Nassau, with some small or odd shaped homes in better areas in there as well but with high taxes or poor condition that maybe hard to sell later.
You are changeing your story as you are proven wrong , originally you said stony brook and smithtown and i gave you those and sayville, now you are in nassau next queens, maybe by time you hit manhatten you will be correct. I am not trying to prove you wrong for selling, you are trying very hard to justify what you did. You really dont have to, you made a good choice , just dont try to dissalusion other people into thinking it is as bad as Florida and california, because it is no where close.
P.S.
That seven year rule is a crock of sh*t.
On Long Island at least.
The reason housing has the potential to be a good investment is because it is leveraged. If you are putting down 10% (50,000) on a $500,000 house and your house goes up 6% in a year, you have just made $30,000 or a 60% return on your investment! Not bad at all.
Unfortunately (or fortunately, depending on who you are) CNN is predicting a 6% decline in housing prices in the Nassau/Suffolk region over the next 12 months (see CNN.COM business-real estate section). Now if you are thinking of buying a house for $500,000 and you put down your $50k and your home depreciates 6% ($30,000) you just lost 60% of your investment in one year. That's just about as bad an investment as you could possibly make!
When you invest in stocks, people say not to try to time your entry, instead you should dollar-cost-average by buying some stock each month and spread out your entry point. This is not possible with housing so it is highly critical that you time the market correctly. CNN predicts a 6% decline in our area over the next 12 months. Many economists think this figure is overly optimistic. My advise is that if you are thinking of buying a house now, wait at least 12 months. You will be happy you did.
The reason housing has the potential to be a good investment is because it is leveraged. If you are putting down 10% (50,000) on a $500,000 house and your house goes up 6% in a year, you have just made $30,000 or a 60% return on your investment! Not bad at all.
Unfortunately (or fortunately, depending on who you are) CNN is predicting a 6% decline in housing prices in the Nassau/Suffolk region over the next 12 months (see CNN.COM business-real estate section). Now if you are thinking of buying a house for $500,000 and you put down your $50k and your home depreciates 6% ($30,000) you just lost 60% of your investment in one year. That's just about as bad an investment as you could possibly make!
When you invest in stocks, people say not to try to time your entry, instead you should dollar-cost-average by buying some stock each month and spread out your entry point. This is not possible with housing so it is highly critical that you time the market correctly. CNN predicts a 6% decline in our area over the next 12 months. Many economists think this figure is overly optimistic. My advise is that if you are thinking of buying a house now, wait at least 12 months. You will be happy you did.
You are correct Clamboy, renting provides zero return. You pay money and you get shelter and a place to store your junk. Renting is not an investment, its an expense. However, if you examine the local Long Island listings where homes are both for sale and for rent you will find out something quite astonishing. Take a look at the Woodbury Preserve attached-housing off of Jericho Tpk in Woodbury. They want $1.45M to buy a place, then you must pay $2,000 a month in taxes, then you must pay $500 a month in maintenance fees to support the common areas and garbage collection (a fee that is likely to rise considerably once it is in the hands of the homeowners association). In all, you will have to pay over $13,000 a month to live in this lovely new home.
Or you can rent it for $5,000 a month. You don't believe me? Call the realtor yourself.
So your choices are to buy for $13k a month or to rent for $5k a month. If you rent, you do not make money on your rent, but you save $8,000 a month that you could use to buy stocks. Also, if you rent, the crashing housing bubble is N.Y.P. (not your problem) because you will not "own" the depreciating asset. Have you seen the stock market lately? It's soaring! Why have your money locked up in an asset estimated to loose 6% a year when you can get in on a good mutual fund returning 15% to 20% a year?
My advise is that if you are thinking of buying a house now, wait at least 12 months. You will be happy you did.
Maybe I am missing something in this logic but wouldn't this only work for someone who is going from renting to buying?
Because if a homeowner on Long Island waits at least 12 months to buy their next house (for the market to come down that 6%), then wouldn't they also be taking a 6% loss on the house that they'd be selling then? In other words the market then would be equally bad for them as a seller as it would be better for them as a buyer -- so what would be the real difference between selling/buying now versus selling/buying 12 months from now?
You are correct Clamboy, renting provides zero return. You pay money and you get shelter and a place to store your junk. Renting is not an investment, its an expense. However, if you examine the local Long Island listings where homes are both for sale and for rent you will find out something quite astonishing. Take a look at the Woodbury Preserve attached-housing off of Jericho Tpk in Woodbury. They want $1.45M to buy a place, then you must pay $2,000 a month in taxes, then you must pay $500 a month in maintenance fees to support the common areas and garbage collection (a fee that is likely to rise considerably once it is in the hands of the homeowners association). In all, you will have to pay over $13,000 a month to live in this lovely new home.
Or you can rent it for $5,000 a month. You don't believe me? Call the realtor yourself.
So your choices are to buy for $13k a month or to rent for $5k a month. If you rent, you do not make money on your rent, but you save $8,000 a month that you could use to buy stocks. Also, if you rent, the crashing housing bubble is N.Y.P. (not your problem) because you will not "own" the depreciating asset. Have you seen the stock market lately? It's soaring! Why have your money locked up in an asset estimated to loose 6% a year when you can get in on a good mutual fund returning 15% to 20% a year?
He agrees with me, or rather, I agree with him. He is after all, the most brilliant investor alive today.
Again what would WWBD?
(heres a hint...it wouldnt be a condo...see Broward County Fla.)
Co-Ops and HOAs are HORRIBLE investments and a very broken measuring stick.
However you can buy a nice home in Suffolk with good schools for 350k/7k yr
Which should run you about $2500 a month leaving you with plenty for investing.
(If you can get past Woodbury and the Joneses.)
All hail Buffet...All Hail Omaha.
C
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Housing Prices to Fall on Long Island
