If You Get Caught Between a Loan and New York City.

posted by mihow on 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.

39 Responses to “If You Get Caught Between a Loan and New York City.”

  1. tobyjoe Says:
    August 27th, 2008 at 11:35 AM

    this morning, when doing my daily coffee+Trulia search, I didn’t include a single town within 200 miles of NYC.

    This place can fall into the ocean as far as I’m concerned. The willing suspension of disbelief one must have in order to believe it’s in any way worthwhile pushes far beyond reason, and I’m fucking sick of it.

    I don’t know a single person whose home I would want around here. Why on Earth would I want to be their neighbor?

    We’re as good as out of here, as far as I’m concerned.

  2. Milissa Says:
    August 27th, 2008 at 11:59 AM

    Totally, completely understand. We DO own our home (a tiny townhouse in the suburbs of DC that is about to pop its seams with the three of us and the cat), but in order to move into a single family home, we have to sell this one. Which means we have to take a loss, because we stupidly bought it at the height of the housing market a few years back. There is not a single home in the area that isn’t a “fixer-upper” that costs less than $500,000. And the $500,000 range by no means offers you a house that you really, truly want to buy. In order to find a house that you can walk through and get a little excited about, well, you start talking $600,000. This sounds better than NYC, but still, that’s not a price range I’m comfortable with. And while the schools are supposed to be fantastic in this area, they’re not. Graffiti and rust and weeds do not make my heart go pitter-pat when I think about my son attending them someday. And that gang problem? Let’s not talk about that. So yes, this is my long way of saying that I understand how frustrating all of this must be for y’all. There are times I wish that my husband and I had chosen careers where we could just up and move to some small town somewhere. Someplace clean and safe and friendly. And yes, more affordable.

  3. Lee Says:
    August 27th, 2008 at 12:12 PM

    We’re in a similar situation and it really is frustrating. We left Brooklyn after our daughter was born; we’re renting in Jersey and hoping to buy, but even in this market, we’re not finding a lot we can afford.

    Have you checked out any of the towns in Union County? Cranford, Dunellen, Fanwood, and Scotch Plains are all lovely communities with decent to good (Cranford esp.) schools. About 1 hour on the Raritan Valley train line—you do have to change trains in Newark though, which is kind of a drag. There are also buses to Port Authority that take about an hour.

  4. birdgal Says:
    August 27th, 2008 at 12:15 PM

    Oh, Michelle, I feel for you, I really, really do. Alas, I am not a real estate bigwig :(. Would you in any way consider moving to a different part of the state, or out-of-state? (and I don’t mean New Jersey—I think NJ has the highest property taxes in the nation right now…..) I’m from Buffalo, NY (economically depressed but cheap as hell housing!) but I currently live in NC, where the housing is also not as mind-blowingly expensive as it is where you are. Part of the reason we STAY here is because the cost of living is relatively reasonable (I would LOVE to live in a place like Seattle, Boston, or Portland OR but to us, the COL is prohibitively expensive in these places), though the Triangle area is not a bad place to live by any means (I could do without the heat and humidity though!!). I know this doesn’t help you, but I hope you and TobyJoe can find some sort of workable solution in the near future :).

  5. tobyjoe Says:
    August 27th, 2008 at 12:47 PM

    I think, even if I have to go back to line cooking, State College, PA is the place to be. I just have to erase my wife’s memory of growing up there (not that the memories are bad, but it feels like going back in time to her)

    They have a Quaker school for Emory, an outstanding public school system, PSU sports, and IT’S CALLED HAPPY VALLEY. You can’t get better than HAPPY VALLEY.

    I wonder if the Diner is hiring.

  6. Anca Says:
    August 27th, 2008 at 12:52 PM

    We are closing on a house in Nutley, NJ. It’s a quiet small town in essex county, close to the city, decent school system and hopefully we like it! Property taxes are high but not even close to Mapplewood’s taxes that you mentioned. Maybe you’d like to check it out.

  7. mihow Says:
    August 27th, 2008 at 12:54 PM

    Let’s find a new state college. There must be another town like it. That way we’re both happy. You get a quiet home and I get a new place!

    I forgot about another agent here in Williamsburg who said when she heard how much we were willing to spend, “OH, yeah, you don’t stand a chance in this neighborhood.”

    And I went high!

    We’re done. We’re being voted off the island for sure.

  8. andrea Says:
    August 27th, 2008 at 12:56 PM

    As you know, Mike and I have been looking also, and even considered moving south, because of it. So far though—I’ve had no luck finding work that pays even half of what I make near DC. It didn’t seem to matter where we went - south was cheaper to live, but market is poor for what I do-and only housing was cheaper, everything else was about the same; live near DC and pay a fortune in rent, but have lots of job choices. Broke pretty much no matter what choice we make.

    We’ve just had to kind of decide what was more important right now, and for me, work is. We’ll just keep an eye out on places/work in literally any location, for now. But I totally feel your frustration—only you have a family, have to contend with schools, etc…it has to be really difficult.

  9. jenblossom Says:
    August 27th, 2008 at 01:58 PM

    I still think you guys should consider Providence. It’s beautiful and green and peaceful here, there are parks and playgrounds everywhere, TJ could easily commute to Boston and not have to switch companies (the Amtrak monthly commuter pass, while more expensive than MBTA, is totally worth it – it’s a 45 minute trip and extremely comfortable). Moses Brown is a Quaker school here on the East Side, just a short walk from where we are living. There’s plenty of stuff to do and see in and around Providence, plus the proximity to Boston and the fact that it’s on the Northeast Corridor line means bigger-city stuff is easily accessible as well. The fact that you guys have a car would make it even easier for you to get around the city. The air is fresh and clean, the people have been, without exception, friendly and open, and I really believe that moving here was one of the best decisions we’ve made. We’ve met so many people who have left Brooklyn to come here, and they’ve all felt the same.

    If nothing else, you guys should come up for a visit. I really think you’d love it here.

  10. jenblossom Says:
    August 27th, 2008 at 02:03 PM

    Also, I have no idea what your price range is, but this makes me wish we were in a position to buy – it’s just a short walk from our place, and it’s GORGEOUS:

    http://226campstreet.blogspot.com/

  11. bluestar Says:
    August 27th, 2008 at 03:03 PM

    I can go ahead and second the Providence suggestion and also throw Boston into the mix. I don’t know you guys, so I don’t know if you have reasons for not wanting to come to Boston, but that’s where I live and it is awesome. I rent, so I don’t know much about the housing market, but it’s GOT to be better than NYC. I love New York and desperately wanted to live there when my husband and I first moved in together. Had a job lined up and everything, but couldn’t stomach the rents. I actually just flat out refuse to pay that much. No place is worth it. Now I live in a nice little apartment about two blocks from my office in what I consider a fantastic city to live in. Is it perfect? Nope, but noplace is perfect!

  12. Diane in NC Says:
    August 27th, 2008 at 03:10 PM

    Michelle – you used to live in Raleigh, didn’t you? You should check this area out. Tobyjoe could easily find a job around here (we do have Research Triangle Park nearby, with lots of tech jobs and such), the housing market is pretty good and there are a lot of good neighborhoods and schools.

    Seriously. Check out Wake County, NC!

    :)

  13. Meredith Says:
    August 27th, 2008 at 03:39 PM

    What about just renting somewhere in NJ that has good schools, decent commute, etc.? Then you can see if you like the town or surrounding towns and go from there.

  14. Florencia Says:
    August 27th, 2008 at 03:49 PM

    I want to move to Happy Valley! That does sound awesome. We are here in San Francisco, can’t even dream of being able to afford buying anything, we can barely afford our rent and it’s a one bedroom and we have a 21 motnh old. Not that we want her to attend public school here either, but no choice there. So I hear ya, sista. We are being asked to leave, you are right about that.

  15. StFarmer Says:
    August 27th, 2008 at 04:14 PM

    Bloomington, IL… check it out.

    Added bonus… no hobos in backyards.

  16. wendyr Says:
    August 27th, 2008 at 04:15 PM

    Even though we are not currently in the market to buy anything, I feel your pain. I am having an ‘I hate being a grown-up’ day today, so reading stuff like this just confirms todays frustrations.

    I always seem to live in places where it will be impossible for me to buy. Even here in Cork, Ireland, where we currently live, the housing market is insane. There has been a cottage for sale on our lane for at least a year. It needs total redoing – like has NOTHING in it. Two tiny bedrooms, one sitting room and going for nearly $600,000. Ack. We don’t know how long we are going to be staying here (husband’s an academic on a limited contract), so no point in buying – but I just fear if we don’t, then we will never be able to.

    I don’t know. Good luck and I really, really hope things work out for you guys. i wish I had some sort of knowledge in all this stuff so I could help.

  17. Megan Says:
    August 27th, 2008 at 05:52 PM

    How about Columbus, Ohio? It is similar to Happy Valley with a somewhat more urban feel. Thanks to OSU there are lots of cultural activities as well as sporting events. In the city limits there are some really neat residential areas like German Village, Bexley and the Short North. Outside the city there are tons of great suburbs (even some older more established ones) with excellent schools.

  18. vboring Says:
    August 27th, 2008 at 06:08 PM

    NY metro house prices have fallen 10% from peak already. Most of the fall has happened in areas you have no interest in living. It’ll take a few years for the price correction to percolate up to the nicer areas, but given the number big banks laying off thousands of employees there may be pressure on prices on the high end sooner than most expect.

    There have already been a number of high profile foreclosures in the Hamptons:

    http://bigpicture.typepad.com/comments/2008/05/nypost-15-milli.html

  19. Michele Chaves Says:
    August 27th, 2008 at 06:36 PM

    Happy Valley sounds ideal. It isn’t far from NYC, but far enough that I bet you could get a great house for a very decent price.

    I can totally relate to the mixed feelings about going back to the place where you grew up. I drive around Phoenix (I have to drive because one can’t walk anywhere here, nothing is close and the flames shooting out from the ground make it prohibitive) and often feel like I am in a foreign country. But, it is a good place for families, I have a big house with four freaking bedrooms, a kitchen with two ovens (I dreamt of a real kitchen after living in Arlington for 10 years with a kitchen so small that there wasn’t room for a full-size range or half-size dishwasher), and a yard big enough for a pool if I ever have money again. Having family close ROCKS when you need free baby-sitting. My husband and I haven’t had so many dates in over six years! If you’re thinking of more kids, you can’t underestimate the value of this service provided by grandparents! Having some kind of connection to a place is important and will become more important as you get older. You don’t really want to be isolated in some weird NJ city do you?

    What about a condo? Have you considered it at all even as a short-term solution to the housing problem? Chances are it’ll appreciate and in 2-5 years you could sell and have some cash to use on a down payment for the house you really want. You’re trying so hard to find the perfect house that I think you’re driving yourself insane. Maybe you need to step back, go to plan B, and give yourself a little more time.

  20. egirl Says:
    August 27th, 2008 at 08:31 PM

    Move upstate. Really upstate, like Columbia County or further north. You then will find houses that are deals, schools that are safe and good schools. The minus is that working in NYC becomes very difficult. It is a 2.5 hour Amtrak trip one way into Penn Station. But if you had friends in the city and tobyjoe could spend the night with them, he could do a couple days in the city a week and then telecommute or something the other days. But if you want to have a husband at home every night, this idea would not work! And you lose the creature comforts (ie. selection of restaurants, culture, etc) the further north you come….

  21. Krissa Says:
    August 27th, 2008 at 10:04 PM

    I second Providence! There’s very little industry in the city proper but the commute is similar to the one you’re talking about and once you get there, Boston is smaller. My parents live there and LOVE IT.

    Regardless if you try Providence, it really sounds like you guys don’t want to even live in the New York commuter area – can Toby Joe get another job in another town?

  22. jenblossom Says:
    August 27th, 2008 at 10:09 PM

    I thought I posted this earlier but it didn’t come up, but:

    http://226campstreet.blogspot.com/

    We are not in a position to buy now, but D00Ds. Come on. We love this neighborhood, and this looks amazing.

  23. Lowy Says:
    August 27th, 2008 at 10:35 PM

    The thing about State College is that it’s nothing like it was in the 80s or even early 90s. It’s gone from a quaint area with lots of independently run businesses – including some great record stores and a couple of ok bookstores – to a town that is being overtaken by chain stores.

    We lived there last year for about 9 months when we were transitioning between countries and jobs. While the real estate market may be good, there are a lot of other cons. Only about 3 or 4 restaurants that are worth going to. A lack of playground culture…and all other types of culture. Your nearest “big” city is Harrisburg, and that’s still about 1.5 hours away.

    We live outside of Boston now, and while the rent is expensive, it’s no where near the insanity of NYC. It’s a great area, tons of trees and lakes and cool playgrounds for kids, great public library, small town feel. Boston is a 20 minute drive through some nice scenery, 20 minute commute on the train. We rent the bottom floor of a 2 family house – 3 bedrooms, DR, LR, kitchen, garage, basement, storage room, yard and woods nearby – for the same price that would allow you to rent a studio in NYC.

  24. Gillian Says:
    August 28th, 2008 at 11:36 AM

    How did you end up with three readers from Wake County, NC?

    I love it here, too, same as your other Triangle-living commentors. But it ain’t no NYC, that’s for sure. I have lived in London and Sydney, those are my two big cities, and I loved them both, and despite that I am really happy in North Carolina. But I am not a deeply committed city girl, and I think maybe you are.

    So, I think maybe the obvious which you’ve surely already thought of – look at some other cities. Cities on a train line that could take you straight to NY in a handful of hours, so you could go back if you were feeling nostalgic and had a long weekend. Oh, and speaking of PA . . . Pittsburgh is also getting really cool – I can’t handle the cold, but my entire extended family lives there and on our frequent visits, I have to say I am consistently impressed with how Pittsburgh is upgrading itself.

    Good luck.

  25. mihow Says:
    August 28th, 2008 at 11:50 AM

    Oh, jeesh. Not sure what gave you the impression I am/was such a city girl! I grew up far away from the city. I prefer small country roads, actually. Towns. I love NY, but I know we can’t stay here. The ONLY reason I feel that we’re kind of stuck living in or near a city is because there are no jobs for us elsewhere and while I’d love to go solo and work freelance (which we could both do and make a decent living) we simply can’t afford health insurance.

    i am by no means married to any city. I just don’t know how to make a living anywhere else. It scares me.

    I much prefer country/suburbs even. (As long as they aren’t strip malls, etc.)

  26. Lillet Says:
    August 28th, 2008 at 02:57 PM

    Have you tried upstate? A good friend of mine bought a place in Ossining. She has a great house and a train commute with views of the Hudson…

    We will never be able to afford to buy here, ever. It sucks because my husband is a native, and we can’t even afford to buy in Flushing where he was born. When people cannot afford to raise a family in the city where they were born, it is a sign of a sick and dying city. And we can thank assholes like Giuliani and especially Bloomberg for this. The over-development without any thought of infrastructure is going to backfire in a serious way. Meanwhile, we are trying to get the hell out of debt and save enough to move to Portland.

  27. andrea Says:
    August 28th, 2008 at 03:03 PM

    Chapel Hill was the “south” area we where looking at. It’s really lovely! Seemed to have a lot of tech/web jobs that payed comparable to Maryland—unforchantly the print/design work I came across was not, by a long shot.

    Most of the other areas seemed nice as well, though it did seem to have a bit of that strip mall thing going. Other than my difficulty in finding work there, seemed like a nice choice, and very family friendly.

  28. mihow Says:
    August 28th, 2008 at 03:04 PM

    Lillet, yeah, we’ve tried upstate a bit. We were scared off by some of the taxes and believe it or not, we can’t afford most of it. Or it’s way far north—Beacon, for example. TJ would never, ever see Emory. And you have to wonder if it’s worth it—staying in a city and not seeing your kid grow up.

    And I agree, the over-development is really horrible. If not only for the housing market, they didn’t think about the fact that the schools are over-crowded. There are waiting lists that span years. Not joking. I talked to one mother who paid off the local Williamsburg daycare so she could return to work to pay for her high rent/mortgage.

    I have no idea what this area is going to do whenever the families move in and the kids are of school-going ages. I have no idea at all. But we simply have to get out before I see it.

    I feel so completely defeated. I guess we should have thought/planned better years ago.

    (Parents-to-be, put your idea child on a daycare waiting list right now. You will have to wait years otherwise.)

  29. Lauren Says:
    August 28th, 2008 at 03:06 PM

    My cousins grew up in Blairstown, NJ and liked it. Very small town off Route 80. Pretty easy to get to but not an every day commute to NYC I don’t think, although some people drive to the train. Rural. Pretty. I hear you, it ain’t easy.

  30. mihow Says:
    August 28th, 2008 at 03:07 PM

    Also, we’d love to check out NC. There are a lot of areas that are intriguing. But I have been trying to stay close to family (who reside in South Jersey). I should make them move!

  31. Camille Says:
    August 28th, 2008 at 04:11 PM

    I have no housing advice to offer, but I just wanted to chime in as another Raleigh reader! I do wish you guys the best of luck in your search, though. It must be tough.

  32. Jeff Says:
    August 28th, 2008 at 07:24 PM

    Long time no talk. Try the Twin Cities. We’ve got a great Friends school, amazing social services, more diversity than you’d expect, and you can test your mettle biking in the winter.

  33. mihow Says:
    August 29th, 2008 at 08:22 AM

    Jeff! Hello. I’d love to check out the Twin Cities especially after your telling me how liberal and green it is. But it’s just so far away from family!

    Also, I just heard on 1010 Wins this morning that real estate in a few of the most expensive areas of Manhattan sold for less this month than what the sellers paid. Perhaps Manhattan isn’t as untouchable as I thought.

    It’s strange because 1010 Wins also was the news source that reported that the city’s real estate rose. So I don’t know what to believe. Maybe some areas rose (the cheaper, more affordable) and the really obscenely overpriced places dropped, because, really how many multi-millionaires are there? Really?

  34. pghgirl Says:
    August 29th, 2008 at 09:00 AM

    Pittsburgh, Pittsburgh, Pittsburgh! While it’s not for everyone, it does have a lot to offer. The newspaper is constantly hyping the tech jobs & start ups that get a big boost from being close to Carnegie Mellon & Pitt. It’s not hard to experience the urban, suburban, & rural in one day in SW PA. There’s a big push to be at the forefront of the green building movement here, and there are multiple opportunities for great outdoor recreation. There are some great school districts within 10 miles of downtown. The 7-8 hour drive to NJ isn’t terrible, and you’re only about 3 hours away when you need that Happy Valley fix. Plus, grocery shopping is a breeze on Sundays during football season! Seriously though, have you thought of doing the job search first & then worrying about housing? I know your lease is up in Dec., but if you could find something temporary while you search for the perfect job in the perfect area you may end up happier in the long run than settling for something just because of your time constraints. Good luck! I know the real estate game totally sucks.

  35. mj Says:
    August 29th, 2008 at 10:13 AM

    You would love some of the burbs around Boston – they’re affordable, have great public school systems, and are near a design-oriented city. And still not far from S. Jersey. Plus, housing prices dropped 12% in one year. I know of a house you could buy in West Roxbury….1700 sq. feet, has a little fenced in yard, in a quiet neighborhood, about 5 miles from Boston…

  36. Leah Says:
    August 29th, 2008 at 10:42 AM

    did you try this one? http://www.hgtv.com/hgtv/be_on_hgtv/article/0,1783,HGTV_3222_5482383,00.html

    I bet after they see you guys and read your story they’ll jump atcha!

  37. Jenny Says:
    August 29th, 2008 at 11:15 AM

    Well if you could move anywhere I’d like to suggest Atlanta and surrounding areas. You’d need a car around here, but for a fairly large metropolitan city, home prices are quite cheap. We bought a 4/2.5 with over half an acre, a 2 car garage, in a nice wooded neighborhood, 20 minutes from downtown for $240K. Taxes are low around here too, and you’d have a big airport at your service for visiting relatives.

  38. mihow Says:
    August 29th, 2008 at 11:51 AM

    Leah: That’s who I wrote to! No word. They hate us.

    Jenny: My husband grew up in Atlanta. There’s no way he’ll go back there. :[

  39. Jeff Says:
    August 29th, 2008 at 01:31 PM

    Yeah, it’s really far away from everything.

    I was just mentioning the good parts, though. Didn’t want to say anything about being able to drive 1200 miles in any direction without hitting an ocean.

    But, but… we’ve got lakes. Lots of lakes.

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