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I know there are threads all the time about the high cost of living on Long Island and difficulty many people - including what would be considered 'well off' in many other metros - have experienced once the housing market got completely disjointed from income levels.
What interests me this time around is what people think the future holds for Long Island residents.
My wife and I are fortunate to have had things fall into place in our lives as a result of a number of things - hard work, sacrafices, luck, buying at the right time, etc. . . While we are heading down the path of the American Dream, it is still such a difficult concept to grasp that despite our success, the ability to own a modest 4 bedroom, 2-bath house, have two relatively new cars, live in a nice town with good schools, and NOT have a growing mountain of debt is limited to so few individuals.
In speaking with my friends and family, everyone's reaction is the same. It just doesn't seem like a reality that one day they will be able to afford a solid house in a solid town.
I know many others share this frustration as well. So the question is, can this price premium last? The weak economy has certainly has its effect on real estate, among other things, but it's still way out of tune with income levels.
So where do things go from here? Once everyone who bought before the late 90's has passed on or relocated, how will these values be supported? There is limited costal real estate in the U.S. which maintains values to some extent, but now more than ever, there are limited high paying jobs that give people the ability to buy into these area.
If anyone has any thoughts or theories on how things stay the way they are, I'd love to hear.
I think you will continue to see the college kids going off island to school and not coming back and the middle class relocating. The island will become more and more divided into rich areas and poor areas, with very little in between.
I don't see it becoming more affordable anytime soon. Long Island, like NNJ, Westchester and SW Connecticut all draw from the NYC well. If the wealth and opportunity dry up in the city, the suburbs will follow suit.
There are places to live in the metro area for people of all income ranges. The places with QOL better than most and schools better than most will continue to cost more than most can afford and generate the most demand. There are more than enough families where mom and dad make 50K a year each saving up a down payment to buy a beat up 4/2 for $425K and are willing to cut coupons to get by.
The marginal areas or exurbs that are too far out to be considered a reasonable commute are most at risk for a further price drop. A nice house in a nice neighborhood within an hours commute to the city will remain out of reach for most I'm afraid.
I think that LI will remain expensive relative to the rest of the country, but I don't agree that banged up 425K 4 bed 2 bath will float..it barely is now, and there isn't some great boom of jobs coming. A family making 100K combined as the previous poster mentioned, probably won't get a mortgage on a house for 425K unless they have 100K down, and most people don't. Banks cannot and will not give people 4 times their annual income in mortgage in a shaky economy. You can live 60 miles from DC and buy a 4 bed 2 bath that is less than 10 years old on for less than 300K now. Look it up.
The owner can list there 4 bedroom high ranch for $425k..someone might even offer 425K..but will the deal close? Will the bank appraise it that high?
Long Island will always be expensive. I agree with the previous post that college kids and younger couples will continue to move off Long Island. My husband and I are seriously considering this as well before starting a family.
I think that LI will remain expensive relative to the rest of the country, but I don't agree that banged up 425K 4 bed 2 bath will float..it barely is now, and there isn't some great boom of jobs coming. A family making 100K combined as the previous poster mentioned, probably won't get a mortgage on a house for 425K unless they have 100K down, and most people don't. Banks cannot and will not give people 4 times their annual income in mortgage in a shaky economy. You can live 60 miles from DC and buy a 4 bed 2 bath that is less than 10 years old on for less than 300K now. Look it up.
The owner can list there 4 bedroom high ranch for $425k..someone might even offer 425K..but will the deal close? Will the bank appraise it that high?
A family of 4 with marginal credit earning 100K can get a FHA loan today with 3 1/2% down on a 425K house as long as they do not have a lot of long term debt other than the house.
In speaking with my friends and family, everyone's reaction is the same. It just doesn't seem like a reality that one day they will be able to afford a solid house in a solid town.
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THis is one of the biggest reasons we are looking to move. We've been in our house almost 13 years, so we certainly got in before this last boom - we bought before the boom before that!
But we don't really see any way that our kids will be able to afford to live on Long Island. We live in Garden City, a town where people grow up, go off to college, maybe live in the city for a while, then come back to raise their own families here. But (and I know I am not alone in this town when I worry about this) - what will our kids be able to afford here? GC is full of Wall Streeters, but will that ever recover to the extent that people make money the way they did in the 80s and 90s? And do I really want my kids to have to schlep into the city every day just to make afford a house here? Sure, maybe they would be able to afford a house somewhere else on Long Island, and maybe they'd even prefer that, but we feel like giving them some other options is probably a good idea. THey can come back here if they choose. As my DH says "New York isn't going anywhere".
A family of 4 with marginal credit earning 100K can get a FHA loan today with 3 1/2% down on a 425K house as long as they do not have a lot of long term debt other than the house.
Anyone who is expected to make payments of 70% of net pay on a house - should have their heads examined. The mortgage lender should have their license revoked. Carrying that mortgage, results in P&I of $2,500, add another $900 for taxes and we haven't even started talking about insurance, heat and electricity. Don't forget about food to keep the family ALIVE!!!
Status:
" You’re not getting another penny out of me"
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I'm not worried at all, everyone knows the world is gonna end in 2012 anyway.
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