To Buy or Not to Buy
We rent a two-bedroom in Park Slope for over $3,000/month. We have $120K sitting in the bank ready for a down payment and could easily make a payment of up to $4,500/month. We could afford to buy an apartment, but we are in no rush as we live comfortably now. When we do buy, we…
We rent a two-bedroom in Park Slope for over $3,000/month. We have $120K sitting in the bank ready for a down payment and could easily make a payment of up to $4,500/month. We could afford to buy an apartment, but we are in no rush as we live comfortably now. When we do buy, we are looking for a 2 bedroom w/ outdoor space. What are your thoughts about the market – should we hold off and sit tight until the market falls further, or should we jump in now? Is there a general sense it still has up to 30% to fall?
Why look for an apartment when for the same money you can get a house ? Frankly I dont get the maintance fee business. I’d rather “maintain” my house and now exactly where my money is going (into equity). Im not sure if you are a young couple or not. If you are planning to have children, believe me you will outgrow that second bedroom as soon as the child starts to walk – wait until the grandparents and other guests start to spend the weekend with you…a house is the way to go. With 120 thousand you can easily get a place in Crown Heights North and have some money left over for renovations. I would look closer to Franklin. There are some beautiful 4 storey houses there that are in the 800,000+ range. And this area is changing fast. Park Slope is great in my opinion, IF you managed to buy 10-15 years ago. If I were to buy in Park Slope now, frankly I’d feel like a “sucker” – that is someone else would have made alot of money off of me ! If youre in for the medium term CHN is the way to go.
Not sure how long you’ve been on this site but if you look at the archives, you’ll see the majority of comments were saying prices were going to come to come down in almost every single post (even for years while it was still skyrocketing). Eventually they were right as all markets are cyclical but no points given for timely calling of the fall.
In other words, take any advice you get on this board with a heavy load of salt. No one will know when we hit the bottom. Once we know, it will be far too late to take advantage of it.
25% down, 6 month mortgage payments in the bank, and if 60% of the building isn’t already sold, getting the bank to cooperate could be difficult
I will offer my usual advice. There is a lot of potential downside to buying right now. There is very little potential upside unless you are actually going to buy and hold for a very long time, which relatively few people do. With very few exceptions, renters who have down payment savings would be well advised to wait at least a year, maybe two, before jumping in to the market.
As for interest rates, if they go up prices will go down even further to compensate, and your down payment will be worth even more.
As for inflation, the asset you want to buy is housing, and that is starting a deflationary period. Other assets might appreciate (eg stocks) but housing in the Brooklyn market will continue to depreciate for some time.
Bottom line: You are in a very strong position to be patient and sit on the sidelines while prices fall. Don’t squander this opportunity by jumping in too quickly. Lack of patience in a falling market is a classic mistake.
Can I just throw my 2 cents in… since you’re looking in the range of probably $700,000 or more.
Is it just me, or is it ridiculous that a 2-bedroom apartment with a little outdoor space is the best one can hope for. Seriously?
This city has gone squishy in the head. A couple DEEP in the 6-figure territory for income is looking for a TWO-BED with a Patio?!!!? And the market says that’s appropriate.
I’ll probably never be able to afford to buy in this city, but I’m not sure if I’d want to. To be house-poor and live in a space most college-students have in any other city… man o’ man.
Screw “location, location, location” — Brooklyn and New York City in general is losing this battle. New York is only awesome if you can afford it. And if I have a household income of $200k and still have to worry about $$ because of my house… fuck that noise.
we’re thinking of selling our 2br, 1-1/2ba condo in ditmas (fiske terrace, to be exact) if you’re interested. it’s in a victorian style house – 1 of 2 condos. we’re on the bottom floor, separate owner on top. front and back yard with wood deck and garden.
been posting our place on craigslist, i’ll put it up again this week.
DIBS has the right advice. I will add one thought — if you are looking to buy more or less the same set up that you currently rent, you may be looking at a shorter time horizon for resale if you think in the future you may want to trade up to a larger apartment or house, if that is in your future (starting a family, setting up a home office, there are many reasons why you may want to expand later). If you are looking anyway, you may want to see whether this is the right time for you to buy something you may want to hold onto longer, perhaps a 2-family house in S. Slope, Greenwood, WT, Bed-Stuy, Crown Heights, etc. You will be guaranteed outdoor space, will be less exposed to short-term market fluctuations, and will have more options for putting 10% down than if you limit yourself to coops and condos. And, as DIBS noted, rates are quite low right now.
We bought our “starter home” in 1996, a 2 BR co-op with a small garden in a prime Slope brownstone. While we could never have bought our house had we not bought when we did, we kick ourselves for not having reached further for a small house in 1996. I am not saying this is the right route for you, only that you should look into your future a little bit, think about it and see whether it fits your long term plans.
I think it definitely pays to look now even if you don’t buy so that you have a much deeper understanding of what’s out there. Plus you can get a better estimate of what your real carrying costs would be–the mortgage in addition to taxes, maintenance and heating, for example.
Kepp looking until you find something that you really like and that you can afford. Prices may come down but interest rates may go up. No one here can give you a “correct” answer. Only do what you feel financially comfortable with. If both of your credit ratings are well into the 700s you may be able to get 90% financing but many buildings may not allow it.