why do it, the 30 year commitment

ctent, while I really hope this doesn't turn into yet another rent vs buy thread, I think you realize that you have to live somewhere. The questions should be - 1) do you think it's worth it for your family to stay in this city at the cost involved? and 2) is it significantly cheaper to rent the kinds of places your family is looking at/needs? While it's nice to have some stability when a family's involved, you don't want to struggle worrying about putting food on the table at the cost of having a more permanent set of walls around you. You obviously know all this already, but I agree it can drive you nuts sometimes wondering which way to ultimately go. In the end, I'm sure you'll do right for you and yours.

I should also point out, sadly, that the next few generations should probably get used to the notion that we'll have to work for longer than our parents and grandparents, and probably right up until we literally can't anymore.

You are missiing the point here - it is not the thirty years that is the problem, it is the incredible debt you would be assuming. Many recommend that your total payment should not be more than 28% of your net pay (after taxes), leaving you money for a comfortable lifestyle as well as the other costs of home ownership, such as repairs, maintenance, and higher utility / maintenance bills. Would think that the current foreclosure fiasco is ample "life experience".

Having made this commitment more times than i would have imagined, our reasoning was always that it would allow us to trade up as we moved or at least stay at market prices. we were locking into an investment that we would religiously pay into each month instead of perhaps squandering those funds on less necessary items. by the time we bought our last house and retired, the mortgage was rather small and we paid it off entirely. then life hit us and we needed a place in manhattan to be near one of our children. we remortgaged the home and used the funds to buy something here as we took advantage of a depressed market last year. so now we are back in mortgageville again and will stay there until we decide to sell the other house. I guess all the advice i can offer is you never know what is ahead but over the years owning has always made sense to us and certainly over the long term proved to be a good investment as well as offering good security. but is Manhattan a totally different scene? does the option of so many properties available for rent offer a different prospective? These are factors we never had to deal with as all our moves were in suburbs of other states. hope this helps...

where can you find an apartment in manhattan (or even park slope) for a family of 4 for 700K-800K that is not a 5th floor walkup or in a marginal hood THAT you would also be happy living in for 30 yrs?

I have a 30yr buy I dont think Ill have the place more than 10yrs. Id rather have long dated option than do a shorter mortgage and then be forced to refi if you stay longer than you planned.

I would be uncomfortable having a mtge that was half after tax, so take that off the table.

My comfort level would be 1/3 after tax and given the nature of the U.S. economy, I would not buy for the first time UNLESS:
1) You are starting off very young, say a couple of years after college. This is not the norm for NYC, but it is true for a lot of couples in other cities. Then, sure, you can envision being in the same place in 30 years at 50+.
2) Cost to buy is less than cost to rent, and you are comfortable with the fact that your equity could go to zero. This was our situation in 2000 (got something at late '98-99 prices). Your downpayment represents an acceptable proportion of your total savings.

nyc10023, I pretty much spot-on agree with those criteria, though I'd still be prudent of course. But it makes me wonder what the demographics are for a typical StreetEasyer (without getting too detailed of course), as well as someone actively shopping for NYC RE these days. Someone who's been to the meetups might have a good idea.

a lot of the people at the meetups have been looking for a LONG time. many of them can't find what they can afford, or they refuse to buy a studio given their current age/circumstances. many others already own. and a few, like lofty and glamma, found what they were looking for and bought recently. many people are obviously bears, or bulls, but a lot of us fall somewhere in between. not everyone is priced out and bitter. and some really would like to own, even if they had to "overpay" somewhat for the joy of aubergine walls. some, like me, are just older and tired of the whole pursuit of home ownership. for me ownership now seems like a chain, not a joy (and even here i'm being a bit of a hypocrite as i do own upstate). a very mixed group, probably like the real estate viewing population.

bjw - i am not an active shopper. RE dilettante-investor-wannabe. I own, and am okay with the (large) risks of my "equity" vaporizing. I am also not-U.S. centric, so less concerned overall with health of U.S. economy.

"Things used to be much easier to figure out."
What does that mean?

Who cares that it's a 30 year loan? No one is saying you need to stay there for 30 years- if you are really thinking "long term" then renting is probably out of the question, because you have zero control over what your landlord does.

If this is an attempt at a rent vs buy thread, it's extremely lame. It does sound like you don't make enough to live the way you want, though.

Thanks ar - I would never buy a studio in this city, as you have to be both rather wealthy for your age and under 25 to really make a case for it (I fit neither of those criteria, unsurprisingly). As for the "priced out and bitter" I've never thought that was too large a contingent to begin with, even when some were moaning about prices (myself included) a couple years ago. Happy to hear that few of us are like that (in person anyway!).

nyc10023, by not US-centric, do you mean in terms of investments, or where you spend your time? Or both?

apt_boy, this unit has some negatives (first floor being primary) but if someone has two girls or two boys the amount of closet space makes this a possibility. good schools, too. i don't think i could do it happily, but there are many out there who are made of more hardy stuff than i am.

http://streeteasy.com/nyc/sale/535468-coop-225-east-36th-street-murray-hill-new-york

bjw: I'm less U.S.-centric that I want to be in terms of investment. I missed my (last, but not first) chance to diversify out of U.S. holdings in March '09, when the U.S. dollar was at an all-time high. It looks to my (uneducated) eyes that when the equity markets get trashed, that the U.S. dollar surges because we haven't found a reasonable foreign currency (swiss francs & jpy notwithstanding). So I'll wait for that to diversify some more. And yes, without giving too much away, I have the right to live and work in a few countries w/o visa requirements & w/ reasonable K-to-grad school public educational system & "socialized" healthcare, so I'm less petrified of what happens here.

"I have the right to live and work in a few countries w/o visa requirements & w/ reasonable K-to-grad school public educational system & "socialized" healthcare, so I'm less petrified of what happens here."

I'm lucky enough to be in the same boat. It does make a difference, though as much as I love it abroad, I wouldn't be thrilled to "have" to leave (ie: Palin somehow dupes the voting public, terrorist attack, other nightmare scenarios, etc.).

but the truth is the dollar amount today, in 10 years, 20 years, while nominally stable is completely different in terms of purchasing power. at 5% inflation the true"cost" is halved every 12 years.It is actually easier and easier to make payments, whereas for a renter it never gets easier (except rent control scams).This is how landlords make the bulk of their money.

except, nicercatch, now you might need a two bedroom but in five years you may not. or your maintenance for a one bedroom may come close to the cost of a studio rental long before you've paid off your mortgage. or we may be turning japanese, oh yes i think so.

simplistic.

I'm the OP, thanks for sharing.

We have been looking for a few years and finally have saved up enough to think of buying. I am native new yorker and part of the reason for looking at where we want is to be near our family and the community I grew up in, and having the kids be able to be with them. The places we can afford are marginal and that is with reaching the max in our budget, but I don't want to over extend. I think aboutready hit the point when she mentioned that owning has become more of a chain than a joy, and that is what I am trying to figure out as well.

ctent: then haven't you answered your own question? If it feels like a burden and there is no clearcut financial benefit, my advice would be not to do it.

Nicer: 5% inflation is not guaranteed.

I always found renting an apartment and dealing with landlord, super etc. very unpleasant and you never know what your rent is going to be to be every two years at lease renewal.I'm thinking with the price of rentals already expensive in Manhattan your rent could be very high in 15 or 20 years.I dont know which is better in the long term, investing now which has low returns or buying NY real estate.

i just purchased a studio in a nice hood recently and im in my 40s. I dont feel you need to be 25 to buy a studio. Many studio's have great layouts...mine is an alcove with huge windows in kitchen, bath and LR/Dining(1 exposures)...DIdnt need to spend $200k more to get an additional 150 sq ft.......Dont discount some studio's in this city...many are quite charming and affordably priced...and if you are single and either young or old, can be a good investment.

Well. when the Fed itself wants inflation it will get it. www.shadowstats.com already shows inflation north of 5%, gold shows interest rates to be negative, Buffet, Paulson, Soros, telling you that inflation will be in our future, I have placed my bets accordingly. Now ctent has to make a decision for him/herself. I am always grateful to have tenants paying the note for me: I prefer the other side.

As for turning japanese you cannot compare a very rich society (japan, like the US in the 30's)with a insolvent nation (the US).

Or as victor Spereandeo puts it (soros trader): we will have massive inflation (the old fashion way like in the 70s). if not,massive deficits and hyperinflation.

meant to say 2 exposures