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]
6:31,
The relative word in your post is two years ago. Prices haven’t dropped much but you can still get in Ditmas Park for under 1 million. The area is not “way far out” and is affordable, which of course is relative, for all of the previously stated reasons, in comparison to purchasing in one of the other areas mentioned in this thread. It was mentioned as an alternative to say Lodi which is way out there.
Ditmas Park is not under a million, 1:04. Two years ago we looked at the least expensive house in Ditmas Park and it was $1.1 million. Located way far out. Needed $300K worth of work. Tiny bedrooms. Nonspectacular details. Seeing that as representative of the most affordable house in the neighborhood made us look elsewhere entirely.
Regarding NYU merger with Tech, NYU was especially interested in air rights of current Tech buildings which would allow them to expand upwards via unused air rights. (see below copy)
“Promoted as a win-win for both institutions, the deal may be a bigger win for NYU. Poly alumni who question the deal say call it a land grab–though a definitive analysis is impossible, given that details of the deal remain confidential Poly, with a $135 million endowment and some prime real estate, is worth hundreds of millions of dollars–alumni suggest $500 million–but NYU wouldn’t pay out any cash initially, even though it likely would have to spend hundreds of millions of dollars to start its own engineering school or gain a beachhead in Brooklyn. (NYU’s endowment is more than $2.5 billion.)
Rather, NYU would offer Poly the benefits of its larger platform and loan Poly money, perhaps $50 million at the start (according to an NYU source in the Times), based on the engineering school’s unused air rights, boosted by the city’s Downtown Brooklyn rezoning. There should be other financial benefits; NYU has a better bond rating, lowering the cost of borrowing, and greater capacity to support new construction; Poly has signed a letter of intent regarding its air rights with developer Forest City Ratner, its MetroTech neighbor, but has not begun new buildings.”
Also, if you get a chance, check out Googles Maps and look at Street View of 160 Myrtle Street, Brooklyn. The shots were prior to development.(circa 2004-5, I presume) It is amazing how fast they have come in such a short time. If one has a vision more than tomorrow, then one can see the potential investment in the Toren, which, in my mind, will be the cornerstone of this development due to its exceptional architecture.
I love the fact that Citipoint will be across the street coupled with beautiful park similar to Bryant Park in NYC. Also Sheraton Hotel is almost completed.
My bank moved to Jersey City back in the 80’s due to high cost in Manhattan. Now they have an affordable alternative and business will come back to downtown Brooklyn. Ratner and company are very bright and wouldn’t invest this kind of money unless they had statistical models that had high probability for success.
NIce talking to you and hope your trip abroad is fruitful.
ps
I didn’t know about police precinct rezoning. Thanks.
Junkman,
Working abroad for the next few months, so I’m afraid meeting up is going to be difficult. I’ll PM you (if this site allows PMs) when I get back.
Everything you mentioned played a role, but in addition I was trying to see what the neighbourhood would like by 2010-2011:
– NYU campus nearby, bringing in a ton of young, wealthy studnets
– A supermarket and Duane Reade down the road
– Citypoint, a block away, which will hopefully bring in a ton of useful retail, and catalyze the ‘upscaling’ of Fulton Mall
– BAM cultural district
– Beautification of Flatbush extension
– Police precincts were rezoned so that Toren falls under precinct 88, which also covers some of the other ‘nice’ neighbourhoods (e.g. DUMBO)
I’m hopeful that you’re right and that we did, indeed, hit the jackpot.
10:41 what the hell r u talking about?everyone knows COMPSTAT is a bunch of bull.someone was killed in Marcy Houses last week.so wouldnt that at least make it two?
I’d buy in South Slope, but not in any of the 500 units buildings on 4th Ave. Park Slope is by far the safest bet. If you buy for investment then don’t buy in NYC, but in Beijing where you can get a 2000 square feet apartment for $200k.
Good guess 12:43, we are in Journal Square, right off Lincoln Park near St. Peter’s College with all the Victorian mansions on the surrounding blocks. It’s actually changing a lot faster than we thought it might.
I know we were lucky for sure finding what we did but…I still look (all the time (it’s such an addiction isn’t it?) and I see a lot of gorgeous old brownstones and row houses in this area that are really affordable for those of us with “not-so-deep” pockets (please, no comments about being cheap, we’re just trying to live within our means without sacrificing on architectural details or a swing-set for the tikes).
I bought into the 05 series One Bedrooms facing Metro Tech. (738 sq/ft.)
Listen, if you live near the Heights or just want to talk a few minutes about your feelings about Toren, let’s meet up and I’ll buy you a drink at Noodle Pudding here in the Brooklyn Heights. Curious if you bought for a reason I didn’t think of.
Personally, I just think it is a can’t miss at current prices. I grew up in Manhattan and know it well and this building has almost all of them beat by a long short at half the price. My friend, I think we hit the jackpot. Wish I had more money to invest in another one bedroom at $520K. Unfortunately, I’m tapped out. It looks like alot of Euros are being invested in this building based on SOM’s international rep. Two items that aren’t salient in one’s decision making is its LEEDS application and the 25 year tax abatement, as opposed, to 15 year abatement held by competition.
If in the nabe, let’s get together, first drink on me.
You can have a backyard – a front yard too – with a porch in Brooklyn for under 1 million. Near trains and express buses. Not far from Prospect Park or Park Slope. Good Schools P.S. 217 & 139. Lots of good take out. A few restaurants. Ditmas Park.