Buying With Help From The Rental Units
The Times dishes on the New York City real estate market’s dirty little secret — that it’s being fueled in great part by the retirement-age parents of twenty- and thrity-somethings who wouldn’t otherwise have a shot in hell of owning even a studio apartment. When we bought our first apartment — a 950-square-foot prewar one-bedroom…
The Times dishes on the New York City real estate market’s dirty little secret — that it’s being fueled in great part by the retirement-age parents of twenty- and thrity-somethings who wouldn’t otherwise have a shot in hell of owning even a studio apartment. 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. Now, though, the idea of having socked away a downpayment of $150,000 or $200,000 (instead of $30,000 or $40,000) by the age of 30 is realistic only for those in a small handful of professions. Enter Mom and Dad. In Williamsburg (where Natasha Agrawal, bottom right, got hooked up with a $900,000 penthouse by her parents), one Douglas Elliman broker estimates that one quarter of the condos are being bought by parents or the trust funds they have set up. The twist, The Times notes, is that these hand-outs often come with some (creepy) strings attached, such as extorted promises not to let a boyfriend or girlfriend move in.
Buying With Help From Mom and Dad [NY Times]
I was once a 25yo renting in the EV, and I work for a non-profit. I learned about PLG from a friend of a co-worker, and I was able to purchase a very large and comfortable one bedroom for $150K.
My place has worked out really well for me, but it’s disheartening to see that apartment prices have almost doubled. Socioeconomically speaking, people like me can no longer afford to purchase in my building.
I’m in my mid thirties and have made way more money for my father investing with him as a partner in NYC real estate in the last ten years then he ever gave me.
Then again, without his initial investment I’d probably still work in some finance related suit wearing job that I’d hate with every ounce of blood in my body.
I too am slightly sickened at the idea of parents buying apartments for their kids. If you can’t afford to buy in Manhattan or Brooklyn, and you really want to own, buy somewhere else.
Man up!
North Sleeper, I agree with you on the craziness of a coop board rejecting someone (for financial reasons) who doesn’t need a mortgage. Regardless, I have a couple of friends on their coop boards and they have both told me that coops rather have people put some mortgage on their apartments because in the event that the owner doesn’t pay his/her monthly maintenance, the coop can call up the bank and the bank will make the maintenance payments.
Whats more traditional than parents helping? Well, maybe kids doing it on their own. I never heard that part of the American Dream (you know, the part where kid graduates from college and moves into a 900k condo bachelor-pad paid for my mummy).
This has always gone on in NY and elsewhere. What is more traditional that the p’s helping financing their kid’s first house? It is just harder for everyone now, because the cost of education has left parents with less extra funds to use to assist the purchase, and the kids (and often the parents) with extraordinary education loan committments.
Not surprising. The only people in their 20’s and 30’s I know doing well here (i.e – middle & upper middle class folks who have extra money) are people who have had help from parents with housing. Help often comes in the form of downpayment assistance, extended rent free living at home, or in some cases the parents will leave a home purchased in the 70’s or 80’s to the kids and move south.
An important thing to remember is that one thing that allows these parents to help is to be able to own real estate @ reasonable prices compared to salary, something the kids will not be able to do. Look around the country and observe the dangers of stretching to afford a place to live. I’m willing to bet that most buyers dont make the $100k+ it takes to be able to afford these prices.
I read this and was dissappointed only b/c NYC is becoming more and more unaffordable for the people who make this city what is … the teachers, artists, community activists etc. My husband and I couldn’t even afford a co-op north of the Park in Brooklyn. In the end it worked out b/c we are meeting lots of people who are very similair to us but it makes me wonder if we’ll have to move to afford anything bigger then a 2 bedroom! Oh well, life isn’t fair
I thought the “American Dream” was making it by your own bootstraps :/
These examples only work if your parents have money in retirement, thus the never ending gulf between rich and poor, generation after generation…
Depressing.
Ugh, kids getting a 900k dream pad drom mommy and daddy makes me absolutely sick to my stomach.