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August 24, 2009

what to do with all this equity?

Bought back in '99, probably have $500k in equity in a 3br duplex coop worth at least $700. Debating whether to sell and buy a modest house (have kid/s now) or sit tight. Not on the right subway line for kid's school (F), but in great location otherwise. Seeing houses on F line within reach for first time... sell/buy, or sit tight?

Comments

Depends on whether you can afford a place in the right nabe that you like better than your current spot and whether you can sell the current place without to steep a hit. If so, I say do it. I say get a house if at all possible, even if you have to stretch financially. You'll appreciate the freedom that comes with it. Mortgage rates ain't going a lot lower than they are now, so you might as well jump on them....

Posted by: slopenick at August 24, 2009 3:57 PM

I'm making this up, but honestly if you want to stay in this market it doesn't matter when you move. The market goes down, you'll sell for less and buy for less. The market goes up, you'll get more for your coop but pay more for a house.

Posted by: serpentor at August 24, 2009 4:10 PM

What both of them said above^^^^^^^ Without kids myself, I can't imagine how much more difficult these decisions become but I bet quite a bit. And yes, selling and renting for a year or two with two kids would be a nightmare. If you find something that you are financially comfortable buying, I say go for it. A purchase contingent upon a sale, though ddifficult, is not impossible. It used to be very commonplace.

Posted by: daveinbedstuy at August 24, 2009 4:14 PM

" say get a house if at all possible, even if you have to stretch financially."

Really? That's your advice during the deepest recession since the Great Depression? One that was essentially caused by people stretching themselves financially...?

Posted by: 11217 at August 24, 2009 4:24 PM

Look this recession (which will very soon be OVER by the way) was not caused by "people stretching themselves financially." It was caused by people speculating with other people's money, a drop in lending standards, outright fraud, and people who should know better using their house as a piggy bank to fund spending they knew they couldn't afford. Stretching means giving up other things (spring break in the Bahamas) so that you can afford a better/more valuable place to live. Now is the time to stretch, if you think about it. Rates are low, housing prices have come down, and incomes will likely rise in the future. Buying a (good/expensive) home is an investment in your own life.

Posted by: slopenick at August 24, 2009 4:32 PM

Oooppppps, 11217, I didn't see that part of his post. I think I read it quickly an assumed it said "not" stretching yourself.

Posted by: daveinbedstuy at August 24, 2009 4:39 PM

Sorry slopenick, I don't agree with you AT ALL.

I think you're giving out some pretty poor advice, in my opinion.

Buy a house, sure...but stretching financially is just about the last thing you should be doing right now. Buy within your means, leave a ton in savings and enjoy a modest (READ: good does not equal expensive) home. Incomes are going nowhere fast.

A home is a place to escape from the elements and to enjoy your life and raise a family, it should not be (as slopenick says) intended to be an investment in your life. You could lead a perfectly wonderful and fulfilling life in a rental and 75% of the NYC population seems to do just that.

Posted by: 11217 at August 24, 2009 5:50 PM

11217, you could argue that there is a glut of condos. You can point to FL, CA, AZ, and other places where tens of thousands of houses were built on spec that are now in foreclosure.

But almost no houses were built in NYC during the boom.

In fact probably more houses were demolished to put up condos than were built. Therefore, if you're in the market to buy, I agree w Slopenick. Buy a house.

Posted by: denton at August 24, 2009 5:53 PM

Denton,

I said I agreed with the sentiment of "buy a house" but I absolutely do not agree with the "stretching financially" aspect of that in this day and age.

Or any day and age, really.

Americans need to learn to spend within their means.

Posted by: 11217 at August 24, 2009 5:58 PM

There are lots of advantages to owning an apartment over a house, namely, you don't have to worry about maintenance, unless you decide to get involved.

Maintaining a 100 year old house can become a serious pain in the neck; having a pad with a terrace overlooking Central Park, on the other hand, sure would be nice.

Posted by: IronBalls at August 24, 2009 11:16 PM

Slowly, a trickling of folks from Brooklyn Heights and Park Slope have been buying homes in Bay Ridge (even though many of the fine Victorians in that area had been razed by developers, many solid rowhouses and limestones still exist).

Schools are good both public and private and children are indeed welcome in the area.

Ah, but Bay Ridge is captive to the R line. However, my child attended HS in Park Slope and it was an easy trip from the R to F to arrive at same.

You might want to come out and take a look.

Posted by: Madeleine at August 25, 2009 12:02 AM

You're right about stretching, 11217. But he OP didn't say that he would be. He said he can sell his apt and have 500k. Not sure what he means by the F line, but he could certainly buy a nice house in WT or the South Slope near the F for $1 million. Putting 50% down on a house is not my idea of 'stretching'. Of course we don;t know his income or other details but...

Posted by: denton at August 25, 2009 7:09 AM

OP here. No thanks on Bay Ridge; still not safe for queer families and not close to anything except Staten Island. Our income would safely support a mortgage of around $350k along with all of all of our other commitments, so with roughly $500 in equity we're not quite looking at $1mil houses. Not looking to do a gut reno, either, so something in decent shape is v impt. Still no consensus :-), but thanks for weighing in!

Posted by: linkinplace at August 25, 2009 9:57 AM

Could you find something for your price range near the F in Windsor Terrace?

Posted by: StuyMom at August 25, 2009 3:12 PM

I vote for buy. Check out Kensington.

Posted by: Freckles at August 25, 2009 5:05 PM

My slightly educated opinion-- I agree with StuyMom-- check out Windsor Terrace. The prices are coming down on the houses much faster than Park Slope (will PS ever really come down??), and it's on the F line. Good luck!