If You Get Caught Between a Loan and New York City.
August 27th, 2008
I wrote to HGTV on Friday night. Can you believe that? I am desperate. We were watching House Hunters. I turned to Tobyjoe and said, “Call them and tell them to find us a house.”
“Do it. Write them.”
“Nah. Kidding.”
“That’s how it happens. People are sitting around, frustrated, they send an email and then the get on TV. Write them.”
So I did. I sent an email that will end up in the digital equivalent to a dead letter office.
Here’s the deal. To many living elsewhere, we actually can afford a pretty expensive house. There are many New Yorkers who would disagree, however, because the market here is so insanely resilient nothing ever goes down in price and instead continues to rise. It’s an enigma really. Manhattan was one of the only cities this year to rise where real estate is concerned. Pittsburgh was another. (Hello, Pennsylvania! My first love!)
To people living almost everywhere else in America, we probably sound like a big bunch of babies. And believe me, there are days where I have to stop myself from throwing a temper tantrum. To those who can afford to buy near Manhattan, however, we’re actually at the low end of the financial spectrum. To prove this point, I called a Westchester based Weichert agent last week and when I gave her our price range, she hurried our call. But not before reassuring me she’d call me back the following day. She never called. This isn’t the first time this has happened. We’ve been ignored by several agents because of how little we can afford when you compare it to the majority of the buyers around New York. Just today we were told by another agent that we simply must stop looking in her area based on our price range.
Agents just don’t want to waste their time on us. I can’t say I blame them. But my goodness does it ever make me angry sometimes. I feel totally defeated.
In order to buy a house in the city or close by, one must sacrifice safety, (in most cases) the quality of schools, the house’s structure, size or both. A lot of “affordable” options are total gut jobs. The house across the street from our apartment (which was advertised as a total gut job) sold for 800,000.
We don’t have that kind of money or time to devote to our living quarters.
We did discover some neighborhoods in New Jersey that worked but we were scared off by the taxes (one of the houses we looked at had an annual property tax of 12,000), the crime rate and/or the school system. Plus, like what you see happening here in Brooklyn, most all of the time the houses we could afford out that way needed a lot of work.
Again, we don’t have the money right now or time to renovate or even upkeep, which is precisely what we were looking at in Maplewood.
Then there’s the loan/down payment fiasco. In the city, you need at least 10% down, a lot of the time 20%. Most houses in our area sell for 700,000 and up. Even if we could afford that (which we can not) we don’t have the down payment. We don’t have 100 grand to put down on a house in order to make our monthly payments close to affordable.
If we buy in a safer neighborhood outside of the city (we’re talking an hour’s commute by train) and forego the down payment (which I’m not sure any bank will allow for these days) we would suddenly qualify for a jumbo loan. The interest rate is phenomenally high. That’s irresponsible and quite frankly, we simply can’t do it. If anything were to pop up (an appliance dies, flooding in the basement, termites, whatever) we’d have to use credit to pay things off. I think that’s irresponsible.
On Saturday we went even further out. And guess what? The houses are still very expensive. In some cases, the property taxes went down, and the houses were in much better shape, but they were a lot smaller and more expensive than what we were seeing in Maplewood, South Orange, and West Orange. We liked several of the homes we saw. But again, the lack of a sizable down payment to keep us out of jumbo loan territory stops us every time.
We have discussed downsizing our rental here in Brooklyn and buying a house two hours or more outside the city just to get some equity. But the rents here have gone up almost as much as the mortgages. We can’t afford both a mortgage (even a really cheap one) and rent. And since the rents have gone up so much in our area, finding another rental would mean not being able to save defeating the purpose entirely.
We’re stuck. Not to sound dramatic, we’re basically being asked to leave.
Why am I writing today? I’m not sure. Perhaps so I can one day look back on all of this and say, Thank goodness that’s all over! Because the indecision is killing me. Our inability to buy a place in a city that I have called home since 2000 is really just heartbreaking. Perhaps I’m writing because I hope that someone out there is in the same situation, misery does love a little company, after all.
And I’ll admit it. There’s a small part of me (the same part of me who buys a lottery ticket once every three years) who hopes that by some magical twist of fate my words will fall upon the ears of some real estate bigwig, someone who can step in and assist us, let us know what we may be overlooking. Because I have no idea how to make this work. This just isn’t my area of expertise.
Our lease is up in December and we still have no idea where we’ll be living. I can’t even begin to explain the amount of stress Tobyjoe and I are enduring based on that fact. And all the while we’re trying to raise our astonishingly happy son.
If houses were bought on smiles alone, we’d have thousands thanks to him.
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