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]
my vote, old victorian on staten island close to ferry and vz bridge.
http://newyork.craigslist.org/stn/rfs/696771236.html
guest 10:19 where in Jersey City did you get a brick home near the path for that price? Seems very cheap for a home in Jersey City. Maybe in Journal Square. Either way good luck. Im in Hoboken and I love it. My mom owns in Jersey City and things are really starting to change. GOOD PURCHASE.
I’m quite impressed with Toren.
I have a few architect/designer friends who live in Manhattan and I showed them the Toren website, and they were impressed.
One even said (and keep in mind, I had to bribe her with wine to get her to see my newly bought co-op) that it was the first thing she’s seen in Brooklyn that actually tempted her to move here…
Junkman,
We also jut bough at Toren, one of the smaller 1 bedrooms. However, we paid slightly over $700/sqft. If you don’t mind me asking, what line of 1 bedroom did you buy A, B, etc. etc.?
Completely agree with everything you’ve said, Oro doesn’t hold a candle to Toren (on paper). Really looking forward to see what it looks like once the curtain wall is up. And you’ve got to love the fact that there will be a drug store, supermarket, NYU campus and City Ponint (once it’s built) a stone throw’s away.
I think you’re right, the risks associated with preconstruction probably drive prices down somewhat. Let’s see if they (and hope that they do not) materialise.
I’m a born and raised Brooklyn native so it was really, REALLY hard to admit that my dream of a brownstone or town/row homes wasn’t going to happen since simply put, I’m priced out. My husband (born and raised on the L.E.S)and I made the decision to take advantage of the fantastic deals you can still get on brownstones and brick townhouses in Jersey City. Our taxes are significantly higher but we just purchased a 3 story single family brick townhouse built in 1890 for under 360K (we’ve only had to put in an additional 23K in reno.:roof, electric, minor re-pointing). All original detail intact. We’re right near the Path train to WTC it takes me less than 1/2 hour door to door to get to work downtown (train itself is 13 min.).
Please don’t beat me up too hard. Understand, if I could have stayed in Brooklyn I would have. I just wanted people to know that if finances are somewhat limited there are other options than moving into a teeny condo. It’s still possible to have a backyard for the kids to play in.
I gotta say it was a hard to sell me on the idea at first but overall this really is a great place to live.
Thanks to Brownstoner for such a great website. You’ve been my “go to” guide for so many of the projects we had going on when we made the purchase!
(You can take the girl out of Brooklyn but you can’t take the Brooklyn out of the girl)
I have spent the last week looking at most of the high rise condo developments that are part of the Flatbush redevelopment plan. (Oro, Bridge condo, One Hansen, BelTel, Forte etc.) The Downtown Brooklyn Partnership site (dbpartnership.org) does a great job detailing what the future looks like in 2012. Some of the projects may be optimistic but I’m confident that most will come to fruition in the specified time span.
Anyway, after looking at one bedrooms in my price range 0f (500K-650k), I came away with a clear winner, Toren.
I was first attracted to the architect, SOM, with their impressive resume but was shocked by the per square foot price, my purchase under $700 per square foot.
Are the prices so low due to pre-construction?
The comparative value is so far superior to the other high rise competition that I had to buy before the apartment I wanted was off the market.
Check out Torencondo.com and look at the architecture and SOM’s prior work and explain to me how I could purchase for less than $700 per square foot. Look at the communal amenities, ie. beautiful pool, reading area, outdoor space etc.
I have purchased a property after only considering for less than 24 hours.
What am I missing? I will put down my hard earned 10% on Tuesday and would appreciate any feedback.
ps
I realize that I may sound like a broker, but I assure you I’m just a hard working Brooklyn resident for 26 yers who loves Brooklyn and wants to stay here for the remaining years I have left.
10:53: The reason there are so many lovely old buildings remaining in Hudson is that for many years absolutely nobody was interested in the City, and thought it didn’t even merit “urban renewal.” Properties couldn’t be sold, so they were just boarded up and left to rot. Then twenty or so years ago, antique dealers from NYC and elsewhere started gravitating to Warren Street, Hudson’s main drag, buying dilapidated buildings for very little, and restoring them as shops, with either their residences or rental apartments upstairs.
I own a house in Hudson, and would advise you to get a good education in property taxes upstate before you think of buying there. While there’s a lot of inventory on the market, the property taxes are astronomical (there’s no limit on one to three family houses, as there is in the five boroughs)and the local municipalities tend to do what’s called “sales chasing.” That is, when you buy, the house that has had a very low assessment for many years suddenly sees its assessment jacked up (sometimes doubled or tripled) based on your purchase price alone. It’s not legal, as it saddles you with an inequiable burden of tax, but it’s done all the time. The property taxes in Hudson (which needs lots of money as it’s the County seat, with lots of patronage jobs and social services to pay for, in an economy in which there’s very little private sector employment) can be astronomical – and the school system is hopeless, despite school taxes rivaling those in Westchester.
That having been said, though its local politics are a swamp, Hudson has a lot of interesting residents and can be fun if you don’t mind everyone minding your business (and probably knowing it, as the City is so small). But if you’re a couple with a kid to send to school and don’t have a ton of disposable income, don’t buy in Hudson.
Look up the 79TH precinct in Bedford Stuyvesant where I live. in 1990 there was 71 murders today there has been one this year and that was new years and the person was mental and the police killed him.. So you people really should check your facts first…
why real estate works compared to stocks:
10,000 invested in stocks may become 20,000 in 5 years, if you are very lucky. If you are like most stock investors, you will come out with about 8,000 after 5 years due to most stock investors’ inexperience.
10,000 in real estate can be leveraged into purchasing a two family home with a rental income.
while the stock value could easily tumble to zero, it is unlikely that a real estate investment would devalue to zero, even then, you could still live in it and have a roof over your head, what do you do with a stock certificate? use it for kindling while you’re sleeping on a park bench?
here’s the biggie; say your investment in real estate goes through the roof? you could sell it and pay zero capital gains for the first million if married or 500k if not. if your stock takes off and you sell, get ready to pay uncle sam his share of about 200 thousand. what’s more, real estate investments have huge write-offs in depreciation and mortgage interest. try writing off 500 class A shares of IBM.