Is it just usual reasons? To have bbq, or a small garden patch, or my own washer and dryer, or being able to have drinks outside? Sure, but that only a small part of it. To have a yard for kids to play in? (translation - put a kid out to pasture and not have to dress for the outside and take him to the park/playground) That one is not high on the list. We have lovely parks and playground and are used to this lifestyle.
My major reason is financial advancement of the family.
In my travels I see what happens in almost all major metropolitan areas as population grows, and I understand what it means to own a house in a place like that. People who own a house in HK or Shanghai, or any densely populated area are very few and they have a tremendous financial advantage. It is basically investing in land, in areas that geographically cannot expand, but population grows and grows and grows and property becomes more and more expensive, out of reach for many. A change that happens in a decade or two is incredible!
I feel NYC is trending towards that direction. There are also additional points that are special to this city. A lot of property bought here is bought as an investment or insurance. For example, rich people from all over the world, with either unstable regimes or places like China where political changes can down the road expose rich people to risk, buy nyc apartments for their kids, to protect their future. This is so wide spread, that most brokers have a toll free number to call from abroad and a currency calculator on their website.
REITs, investment funds, pension funds also buy up properties in NYC. All of it reduces inventory as population still grows. Higher earning people are left to compete for what is left. And compete for outer boroughs and anything decent within commuting distance. Neighborhoods are “gentrifying” and natives of the neighborhood get unhappy about skyrocketing prices. But thats the natural consequence - people just buying where they can afford. They are not setting out to “gentrify”, they just need a place to live.
2. It is also a hedge for inflation. Governments(especially US) are printing a lot of money, and higher inflation is not an unreasonable expectation in few years down the line. Having a fixed mortgage on a very expensive asset in a desirable location is a good protection. It would also make mortgage payments much easier.
3. It is about us and not the co-op board having control. Being able to rent it out, not having anyone re-finance the underlying mortgage without your permission, deciding on when and by who repairs should be done, to who and for how much you can sell… the list goes on and on.
4. Buildings are also a subject to numerous and ever expanding city regulations. For example local law 11, that cost our building about 2 mil this year (and we are a 180 unit building only). It costs other co-op more or less depending on their size/building type. Our building decided to refinance mortgage and increase repayment term to pay for it. There has been many, many other expenses replacing major things to meet city regulations. Construction companies make billions through these city regulations, and yes, I do see political corruption behind it. Family houses are not subjected to these government whims as much.
Anyway, to summarize, I feel that if there is any chance to buy land HERE, that it can change the financial future of our family - like a chance to buy land in Kowloon 25 years ago.
WHY I want to buy a house in NYC.
July 5th, 2014 at 11:25 pm
July 6th, 2014 at 03:11 am 1404616284
How much house could you afford if you sold your current home for your down payment and cut back 50% on the discretionary spending?
$1mil/30yr mortgage @5% = $5370/mo for P&I.
How much are property taxes in your area?
July 6th, 2014 at 04:25 am 1404620706
It's been over 30 years since I have been back there, but IIRC, there are some two and three family buildings in good areas in the Bronx. Would it be possible for you to buy something like that and rent out the other units? It would not be the private single family you want, but it could be a step in that direction and as rents increase, your income and equity would increase as well. You would control the property and the common space.
I had friends that did that in a more traditional multi-family area in the early 1980's. They bought a three family with an unusable basement in Carroll Gardens in Brooklyn when that area was beginning to gentrify. They repaired the basement and rented out two of the units for several years. They sold it after the second child was born and did very well.
July 6th, 2014 at 12:13 pm 1404648814
It is already prohibitively priced in NYC but I understand your reasons for wanting to buy there.
July 6th, 2014 at 11:06 pm 1404687968
July 7th, 2014 at 12:04 am 1404691481
July 7th, 2014 at 06:04 pm 1404756274
LivingLarge, I'm not sure why you are repeating back to me what I said in many previous posts. I'm quite aware that my income is not high enough - hence the problem. And that cutting my expenses would not make a needed difference - I posted that repeatedly, including my previous post, so why is it something you think I'm not getting?
The point that I think I'm not getting across to you is that I do not want A HOUSE. Living in a house is not my primary motivation. I want a house because I believe it to be a good long term investment, with better potential return than a house some place else.
As far as income goes, when we rented our first apartment in Brooklyn, I was making $6.50 an hour, and DH was making $10 an hour, so we've been working on it.