advice on areas for a young family?

I might say stick with renting, given those parameters -- just trade up to something that fits you better, and put some of your cash in conservative investments rather than tying it up in your home.

Off the cuff, $2000/month and up to around $40,000 down is going to get you maybe to $400,000 maximum, and probably less. FHA financing could mean a much lower down payment, but the $2000/month cap is going to keep your total buying power down since it doesn't allow for vast amounts of financing after you handle the monthly maintenance/taxes. (I'll leave more rigorous math on this to others...)

I assume you want at least a junior-4 (small second bedroom), and maybe 850 square feet, so plug all that into StreetEasy's search and see where the listings lead you -- use the map to view all listings in the clustered mode, the available neighborhoods will stand out quickly.

Neighborhood-wise, I might suggest a look at Inwood or Riverdale, though the commutes are going be more feasible from Inwood on the A train. You could also look at the areas just south of Prospect Park, which are more affordable.

At a 5 to 7 year horizon you are probably on the edge in terms of a purchase making sense. The transaction costs are fairly significant, the largest being the broker fee to sell it later. Model it using the NY Times rent vs buy calculator, be sure you do some rental shopping to ensure your comparable scenario is solid, and use conservative estimates on the other parameters. Then consider whether the stability and intangibles of a purchase might be worth the additional costs that I suspect the calculator will predict.

I live in Bay Ridge and pretty happy. Great place to start a family, IMHO. We now are looking to get a house so we have to look elsewhere due to prices.

In terms of your budget, Bay Ridge might be an option for you. 2BRs could be had for around $300, based off what I saw listed. Commute to downtown brooklyn would be about 35-40 mins. Midtown can be trickier depending on where in mid town. There are express buses that can get you to midtown in under an hour, or the train which would be a little over that. Weekends can be rough on the train, I wont lie :-)

Woodside, Sunnyside, Jackson Heights.

Transaction costs are too high to justify buying if your time horizon is only 5-7 years. It will cost you 10% of the purchase price in fees and charges for the round trip buy and sell.

"We would like to have a monthly housing payment of no more than $2,000 /mo including HOA and taxes.
Is this realistic?"

I think you might have to go even lower for one of two reasons:

1. Your wife decides she doesn't want to work anymore, so you lose her income.

2. Your wife decides she DOES want to continue working, in which case you'll be spending a buttload (close to another monthly mortgage payment) for some form of child care.

Children are expensive.

As an absolute minimum, your new Bundle of Joy will cost you an extra $2,500/month from soup to nuts -- everything from nanny/daycare to food and diapers. To *take home* $2,500/month (at least!) your wife needs to earn at least $54,000. If she's not grossing at least that much, it's a losing proposition for her to continue to work.

I'll be generous and assume she's contributing half of the $120K to the household -- $60K (which is already pushing the break-even point). Assuming she'll still work, there is no way you'll be able to afford $2,000/month in housing expenses PLUS $2500/month for baby expenses PLUS everything else. The math simply doesn't work; at best you're already only netting $5400/month.

You need to be looking at keeping your mortgage at or under $1000/month (assuming a rock-bottom monthly maintenance of only $500). More than likely, though, with a baby and all, you'll want some basic amenities (elevator, doorman). In even the most modest of apartment buildings, you're looking at $750/month for the maintenance. That leaves you with a $750/month mortgage payment ... for about $160,000.

So you're looking in the $200K range. Not a whole lot of options out there -- definitely not in Manhattan, unless you're willing to toss your hat in the ring for one of those HUD "middle income" buildings in Harlem.

My suggestion: Your wife quits her job, and you buy a $200K home based on your salary (and commute) alone. This opens up nearly all of Brooklyn for you.

Good luck!

Well, that's both complicated and simplistic, Matt stuns again with his sure-fire analysis.

I'd go with Jackson heights myself, if you truly feel compelled to buy. But unless you can find a great rent/buy ratio, I'd just rent. You may or may not want the second junior, which could send you "somewhere else."

Its so Matt to assume to that the wife isn't the primary bread winner and it would make more sense for the husband to quit and stay home. (Of course they probably BOTH want to continue working but let's pretend for a moment going to one income is an option). Matt, its 2013...June Cleaver and Betty Draper Francis are in nursing homes if they are alive at all.

far rockerway is ideal for likeminas

however, you should be responsible to yourself and the country: pay 20% down, do not use those sinful FHA loans

Likeminas (¿hablas espanol?), if you work in Downtown Brooklyn, and there are greated odds of you being the breadwinner than your wife (or that your wife will be staying at home for a long time with the baby), look into living as close as possible to your workplace as you can. Walking distance, even if you get less space in your apartment. It will work wonders for your energy and your sanity, particularly with a small child in the house, to not have a long commute.

for $2K per month, there's really not much you will find. with only 10% down, you go even further into non-existent territory.

the only safe areas you can consider, 1 hr commute for both, to purchase are Kensington/Midwood/Homecrest/Sheepshead in Brooklyn. possibly a few locations in Queens. bronx will never get your into bklyn within an hour, unless you're traveling at 6 am or 8 pm.

I would not buy in your situation. you first need to live in a neighborhood to see if it "fits". then you buy. given your 5-7 yr horizon, there's just not enough time to make it worthwhile.

"Matt, its 2013"

I'm keenly aware of the date.

I'm also keenly aware of what things COST, and can look objectively at how much it really costs a family for Mom to indulge her feminist quest for personal fulfillment through a career.