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 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.
If I were renting now and could afford it at all with a conventional mortgage, I would buy in one of the reasonably priced neighborhoods in Queens, further out in Brooklyn, wherever. I don’t think it’s ever a good idea to rent unless you are just passing through or are a student. Having said that, taking an ARM is crazy, unless you are flipping properties for a living.
6:04–great, stay out of the home buying market–your financial advice is ridiculous. Buying an apartment in NY is a great investment as long as you don’t stretch yourself too much to buy and are looking at the 5+ year horizon.
How can a nation of financial illiterates be expected to navigate the pros and cons of the negative-am, no-down, interest-only toxic loan deals sold by con men and pushed by evil commission-hungry real estate clerks?
Agreed on the tone of the comments….
Why don’t desperate homedebtors realize that they don’t own anything – that instead they’re renters too – just renting money from a bank?
And when will it get through to them that bitter renters and bubble sitters have total life freedom during these glorious stress-free days, with the ability to move on a whim, and not have to spend all weekend at Home Depot or slaving on the home?
Finally, what will it take for desperate homedebtors to understand that bitter renters are out there having a great time with all their disposable income, and actually doing this bizarre thing called SAVING, while desperate homedebtors are lucky to have enough left at the end of the month after their massive mortgage payment is paid for a dinner at the Olive Garden?
It’s not the bubble sitters and bitter renters who are owned today. Nope, it’s the desperate homedebtors. Even if they can’t see it yet.
Agreed on the tone of the comments….
Why don’t desperate homedebtors realize that they don’t own anything – that instead they’re renters too – just renting money from a bank?
And when will it get through to them that bitter renters and bubble sitters have total life freedom during these glorious stress-free days, with the ability to move on a whim, and not have to spend all weekend at Home Depot or slaving on the home?
Finally, what will it take for desperate homedebtors to understand that bitter renters are out there having a great time with all their disposable income, and actually doing this bizarre thing called SAVING, while desperate homedebtors are lucky to have enough left at the end of the month after their massive mortgage payment is paid for a dinner at the Olive Garden?
It’s not the bubble sitters and bitter renters who are owned today. Nope, it’s the desperate homedebtors. Even if they can’t see it yet.
Eryximachus,
Get an education, son.
The economy didn’t crash after 9-11. We were worried about deflation not inflation. Go work in a work in a hair net factory in India if you want to do something real. Better yet, make a dog house and live in it and save yourself some rent and us some aggravation.
why don’t you make a dog house and get into it and stay there for a while.
eryximachus, can you make me a dog house and can you throw in some corn too? How’s porkbellies doing this year? I’m thinking about investing.
was that a message from the red states?