Pinching Pennies To Save Up for a Down Payment
This week’s cover story in the New York Times real estate section is about people who’ve scrimped and sacrificed— sometimes for years— to save up enough money for the down payment on their first home. One guy survived for an entire year on a daily diet of a $2.95 chicken special and a 99-cent coke;…
This week’s cover story in the New York Times real estate section is about people who’ve scrimped and sacrificed— sometimes for years— to save up enough money for the down payment on their first home. One guy survived for an entire year on a daily diet of a $2.95 chicken special and a 99-cent coke; another woman started drinking only at happy hours. It’s notoriously hard to save from paycheck to paycheck in New York City; we were lucky that a real estate deal we worked on back in 1999 paid off well enough a few years later to enable us to come up with the downpayment on our house. (That, and we had the good fortune to flip a couple of one-bedrooms in Manhattan between 1997 and 2000, when we cashed out thinking the market had peaked! Got that one wrong, huh?) There must be lots of tales of self-deprivation in the name of nest-egg building. Anyone care to share?
Every Penny Counts [NY Times]
By the way, I THINK Mr. B says in this earlier post that he and Mrs B bought their first apartment without help:
“When we bought our first apartment — a 950-square-foot prewar one-bedroom in Manhattan — for $160,000 in 1996, it was still possible for a 27-year-old and his fiancee to buy something on their own.”
http://bstoner.wpengine.com/brownstoner/archives/2007/03/buying_with_hel.php
So it doesn’t seem that he considers it to be such a terrible violation of privacy.
Lemlar:
Mr. B *already* “said something about how he came to own his own place.” To wit:
“we were lucky that a real estate deal we worked on back in 1999 paid off well enough a few years later to enable us to come up with the downpayment on our house. (That, and we had the good fortune to flip a couple of one-bedrooms in Manhattan between 1997 and 2000, when we cashed out thinking the market had peaked! Got that one wrong, huh?)”
If that’s the whole story, fine. If he got parental money and didn’t mention it, then he’s misrepresenting how and why he was able to buy, which is *the whole point of the thread that he started himself.*
Nobody’s picking on poor helpless Mr. B here.
Mr. B: under no circumstances should you say anything about how you came to own your place. it’s just ridiculous for people to ask such a thing.
anon 7:06–you think Mr. B expresses “attitude” on this site? even if he does, guess the reason: it’s HIS blog. i mean, come on, if you don’t like Mr. B’s “attitude”, don’t visit this site! He doesn’t owe you or anyone an explanation.
My partner’s and my parents were in absolutely no position to help us even a little when it was time to buy, so to us everyone else who has family that can comfortably take on a second mortgage or give even 20k are people who come from “money”. It’s a really loaded phrase (forgive the awful, unintended pun). So my apologies for the vastness the term construes, but whether you get a small amount or “big bag o’ cash” it’s still nice to have parents who are comfortable and liquid – for their sake as much as your own.
i’d just like to correct an earlier poster: just because a parent lends or gives money for a down payment, doesn’t meant someone is “born into money.” sure, not every parent can fork over hundreds of thousands of dollars for a downpayment on a brownstone, but i know multiple people who have had parents very kindly take out second mortgages on their homes in order to give their kid a $20-$40k leg up on the down payment for a studio or one bedroom. the cost to the parent is a tax break and a generally modest monthly bill (which their child could concievably take on if they calculated their buying budget correctly) and the risk of a shift in the market. its unfair to assume that its always mommy and daddy just handing over a big bag o’ cash.
also, i have to say to the poster questioning why anyone would buy into the “bill of goods” on ownership: putting all these american dream/apple pie issues aside, as a woman, i think owning my own apartment–and subsequently making a profit on it–has given me the freedom to make smarter personal/relationship decisions. i know that sounds strange, but think about how many couples in ny are lured into moving in together way too early because of what they’ll save on rent? and how many of those break up and end up taking icky apts that cost too much because they just want out? eh, i’ve seen it happen more times than i can count on my fingers and toes.
I think the question of how Mr. B paid for his first home is extremely relevant. Mr. B has displayed a fair amount of ‘attitude’ on this site, an attitude that’s mostly unfavorable to the kinds of developments that might ultimately provide housing to working people. In that case, I think Mr. B should put up or shut up. He should address how he financed his first home and he should do it right here in front of everyone.
Now that the question has been raised, it’s a matter of credibility.
Mr. B?
Hey Slopehead —
12:32 here. Um…despite the title of this site, I doubt everyone on here (myself included) considers “owning a brownstone” as their real estate goal, or their manifest destiny. Had you bothered to read my entire post, it would be clear I was talking about being able to own a CONDO, not a brownstone, not a house. And a studio, at that.
And I disagree with your “30 minutes from Manhattan” qualifier. Where, exactly, is that? Do you mean getting to the upper or lower edge of the city? Then maybe. But I’d love to know some truly affordable neighborhoods where at the height of rush hour, takes 30 minutes to get to Union Square, mid-town, Park Avenue, i.e., the major employment centers in the city.
i don’t know. alls i’m saying is … i think many of you have bought into an american ethic that suggests that home ownership is the paragon of a meaningful adulthood. (who really gets rich off of that belief system?) there are so many who sacrifice so much from 25 to 55 so that they can finally relax and enjoy it all from 55 to 85. my poor Da died of a heart attack at 61, and while i guess he didn’t care once dead and in the ground, from this side of the etheral plane, i’d say that i’m not too sure his bet was the wise one. me, i like renting my place, eating my pricey meals out, and driving down to puerto rico. i don’t blow all my paycheck in one sitting mind you, i do have the capacity to do some longterm thinking and rest assured that come retirement, i’ll have squirrled away enough pennies to get myself a grand slam breakfast at denny’s whenever the mood strikes. in the meantime however, rather than patting myself on the back for being such a great, planning crazed american, i’m gonna quietly enjoy the good life – today.
Anonymous, 4:13:
Since getting help from your parents to buy your first home is as American as apple pie and happens nation-wide, I guess I question how much farther this old tradition tips the markets in Manhattan. In your earlier post you wrote: “When parents giving/lending downpayments becomes common, it becomes almost mandatory”.
Probably all of us who are on our own financially have felt the pressure of competing against those who have help. But I wonder if the buyers with parental help are creating market pressure that can even compete with the earning power of many young NYC residents. If we assume that buyers with help are absorbing the bulk of the entry-level / most affordable apartments in the city, then perhaps it is true.