These Aren't Your Parents' Buyers
Guess what? Apparently this whole Internets thing is having a broad impact on how today’s twenty- and thirty-somethings go about buying an apartment. Daniel and Luciana Hyman, above, did online research on more than a hundred buildings in Manhattan before settling on a $875,000 two-bedroom co-op in Midtown. That sounds like nothing in comparison to…
Guess what? Apparently this whole Internets thing is having a broad impact on how today’s twenty- and thirty-somethings go about buying an apartment. Daniel and Luciana Hyman, above, did online research on more than a hundred buildings in Manhattan before settling on a $875,000 two-bedroom co-op in Midtown. That sounds like nothing in comparison to the page-and-a-half financial analsyis that one young Goldman Sachs banker submitted with her bid in an effort to convince the developer to accept her 11-percent-below-offer bid. (He didn’t.) We’re more comfortable with taking on debt and paying tomorrow, Mr. Hyman said, displaying the kind of blind optimism that seems to characterize many buyers today. If the cards topple, you can rent your place out and go somewhere cheaper. Or, if you are among the 65 percent of first-time home buyers that finance more than 95 percent of the purchase, maybe you shouldn’t be too worried. You can always walk away from your small deposit if the market crashes, right?
Young Buyers, Prepared and Fearless [NY Times]
One can debate the wisdom of acquiring a home in this fashion, but on one poit there is no debate: Luciana is a babe.
hello
“If earning $350K you should have far more that 20% down payment for that purchase of house.
If not – you have been spending /living lifestyle to match your expectations instead of preparing for important purchase. Ever hear of deferred gratification rather than immediate?”
Uh, yeah, you know nothing. We been saving over 5K a month (and have over 100K with our stocks), but with student debt (just paid off a bunch) we were paying about 1600 a month (now down to 600). Have a free, inherited car. No credit card debt. 2400 a month in rent and parking (could probably do cheaper apt. but have huge dog and so need the space – he does cost some money – a “practice” child, so to speak). Take few vacations (not by choice). Spend reasonably on clothes, etc. (haven’t been to Barney’s in years). Don’t eat out all that often. Biggest extravagance is the gym (but I haven’t been sick in ages, so it’s worth it).
I understand it’s way more than most make. But living around here it’s not enough to make it easy to save 20% on a 1.4 million dollar place.
“If earning $350K you should have far more that 20% down payment for that purchase of house.
If not – you have been spending /living lifestyle to match your expectations instead of preparing for important purchase. Ever hear of deferred gratification rather than immediate?”
Um, no. Coming up with $180K or so is difficult, even if you make $350K a year.
the gentrified brooklyn version of the bloods vs. crips – the renters vs. the owners. as a member of the latter category i’ve tried actively to exacerbate the discord. i randomly approached some dude in clinton hill the other day outside of a cutting edge cafe. i hit him up with the query: “You own or rent?” he didn’t respond quickly enough for my liking so i bitch-slapped the latte out of his hand. i repeated the question. he stammered out the word “rent” so i cracked him in the jaw, curled my fingers to make an “O” shape, bellowed out “owners, bitch!” and walked away, looking for another punk-ass renter to step to.
If earning $350K you should have far more that 20% down payment for that purchase of house.
If not – you have been spending /living lifestyle to match your expectations instead of preparing for important purchase. Ever hear of deferred gratification rather than immediate?
And even after all your fixed expenses your just calculated….you have more than most families even earn before housing expenses.
“One thing that I think has gone unnoticed is that spending 4 to 5 times one’s salary on a house isn’t a big deal when one’s salary is large. That’s what we’re talking about here – the banker and the teacher (or the lawyer and the social worker, you know the drill) make, say, $400K a year – they’ll still have a ton of savings left over every month on an absolute basis after their house cost. It’s simply a different analysis for different salary brackets. This doesn’t help the woman in Billyburg in the article, though.”
Not so much. Spouse and I bring in 350K. If we bought for 1.4 million, 4x our salary, we would die, because we couldn’t eat. Even with the “tax breaks” folks trumpet (after all, you’re putting more money out than you are saving with the tax break). Think about it – even with 20% down (as if), we’re talking a 1.12 million mortgage. On a 30 year, 6900 a month. We won’t buy in the city, so assume, on a house that size, 20K a year in taxes (we’ll be using public schools). So, 8500 a month in payments, excluding maintenance. We bring home, after 401Ks,etc. 15K. 6500 left after the mortgage. Then we would have to get a car (what, $500 a month?), and when we have kids, a babysitter (2 kids, 2K a month). Leaves us 4K a month to live on, excluding commuting (about $200 each a month) and eating (for a family of 4?). So there is little left in savings. We will have thrown our towel into the house bucket in the hopes that it appreciates and that we make more money. It’s a fine thing to do, but not at 4X our income.
The only way I see to comfortably do this is to buy a multi-family, and there are certainly no deals on those in Brooklyn.
I heart Eryximachus. He’s so much fun. Bless his little contrarian heart.
The NY Times Real Estate section articles just serve big real estate interests. This article helps to drum up more young buyers for a soon to be glutted market.