You Have $140K Down, Where Do You Buy?
Competition is heating up amongst developers as all the new towers started during the boom years are beginning to come on the market. Unfortunately for developers, an inconvenient thing happened with the mortgage industry — it crashed. The time when buyers could put as little as nothing down on their mortgage is over; now they…
Competition is heating up amongst developers as all the new towers started during the boom years are beginning to come on the market. Unfortunately for developers, an inconvenient thing happened with the mortgage industry — it crashed. The time when buyers could put as little as nothing down on their mortgage is over; now they are expected to come up with 20 percent. “Developers better have a good product if they want to sell,” commented Halstead Director Bill Ross. First-time home buyers, without the equity from the sale of their previous property, will have the toughest time meeting the new requirements, he said. In some places, prices will have to drop. We decided to play a game of comparison shopping for two bedrooms, and a few other options with more space, all priced between $600K and $700K. Pretend you’ve got $140,000 burning a hole in your savings account. Scores of new condos are on the market all vying for your attention; the borough is your oyster. Which one do you choose…
The first choice is a four-room condo at The Crest in Park Slope along burgeoning Fourth Avenue, quick walking distance from transportation and two of the borough’s best retail and restaurant strips. This sprawling duplex in Bushwick (er, East Williamsburg) has two floors, a private garden and a working fireplace. Or you could give up some space to live in the real Williamsburg and have everything you could possibly want at your doorstep. This even smaller condo in Downtown Brooklyn’s BridgeView Tower is literally right next to the bridges into Manhattan, saving you money on cab fare, has SubZero appliances and a “cascading waterfall” in the lobby. Or you could snag an extra bedroom at the lofty Washington Condos in Prospect Heights, an up-and-coming neighborhood and right near Atlantic Yards. And then there’s always the fuhgeddabout-Brooklyn option, this two-family home with an above-ground pool and double curb cut in Lodi, New Jersey. Which one is it?
David Leonhardt of The New York Times advised in a column Monday that you answer none of the above. While he chose to finally buy a place in Washington, he said New Yorkers should invest their down payment for now until the rent ratio (see link, it involves math) decreases. His philosophy as “an evangelist for renting” has been that once you add in the closing costs, repairs, property taxes, mortgage principal, mortgage interest, and other monthly bills if you own a condo or co-op, you might be earning more on your $140,000 down payment if it were invested in something besides real estate.
As Home Prices Drop, Committed Renter Buys (in Washington) [NY Times]
10:09…I suspect its been a long time since you’ve been in Philly looking at the condo market….
Sarah, the Lodi inclusion was one of the funniest things I’ve ever seen and provided a much needed lighthearted moment after the disastrous crane collapse story. I cannot stop looking and laughing at the montage above. I love it. Thanks!
The 2br Bridge View Tower would be my pic. Great location, lovely views, decent floor plan. However, if I had $140,000 cash I would buy something in Morocco and continue renting (and working) in NYC.
buddaluv
Mr. Q
I would buy the Lodi house for the down payment alone, nothing higher.
uhhh….philly’s murder and crime rate are out of control right now…
The Lodi place is junk. Seriously, though, you can do much better with $700K in NJ. Not saying I would go there, but look in places like Maplewood and you’ll find nice stuff to buy for $700K.
owning is for those whose lives are so predictable and boring that they’ll live in the same city for five years.
If I were looking for a home in that price range I’d buy a whole house in Ridgewood (Queens.) The May 11th NY Times Real Estate section profiled a couple who did just that – though strangely there was no mention of it here on Brownstoner.
“His philosophy as “an evangelist for renting” has been that once you add in the closing costs, repairs, property taxes, mortgage principal, mortgage interest, and other monthly bills if you own a condo or co-op, you MIGHT be earning more on your $140,000 down payment if it were invested in something besides real estate.”
And the word I capitalized there, is the key word of that sentence. And it’s a very big MIGHT. I bought in 2006 and comps are already showing an $85,000 appreciation since when I bought. No way I would have made that in 2 years on an 140K investment.