I'm torn about buying a house...

[sawastea]

Fuck,

I know it is the best decision to make, by making the 'American Dream'...

I would like to find a great place to reside but I'm not sure of my time in the northeast. I don't know if I'll be here longer than two years and at the moment, I'm paying $2,100 in rent w/o utilities. With my long term outlook hazy being in the NE, is it still wise to own locally?

 

[bran987]

Fuck,

I know it is the best decision to make, by making the 'American Dream'...

I would like to find a great place to reside but I'm not sure of my time in the northeast. I don't know if I'll be here longer than two years and at the moment, I'm paying $2,100 in rent w/o utilities. With my long term outlook hazy being in the NE, is it still wise to own locally?

unless you are betting on "above average" capital gains, buying a home with a less than a 3-4 year time frame makes it extremely difficult to recoup the costs of buying and selling. as you know, the amortization on the loan in the first 5 years is almost nothing so you aren't getting any help there either. if you are buying for the feeling of having your own place and the fun that will be, then that is worth something also though.

 

[sawastea]

unless you are betting on "above average" capital gains, buying a home with a less than a 3-4 year time frame makes it extremely difficult to recoup the costs of buying and selling. as you know, the amortization on the loan in the first 5 years is almost nothing so you aren't getting any help there either. if you are buying for the feeling of having your own place and the fun that will be, then that is worth something also though.

That being the case, would a 5/1 be in order? I just don't know what kind of fanastic capital gains I can get nowadays in CT. If I hold it under 2 years, I'm basically fucked. I understand holding longer than 5 years but I just don't see myself being here that long. Get my experience and wham bam, thank you ma'am...

 

[gotmilk]

Home values are dropping up here by 20% already.

Why so expensive where you are??

 

[sawastea]

I live in south Connecticut. In the area you have Greenwich, Darien, Rowayton, Westport, Southport, Westchester, Rye, Scarsdale and of course, Manhattan. Prices are asinine...

 

[thewanderer690]

Most of your loan for the first several years will be interest and you can deduct that from your AGI. You could also do an interest only loan if you decided to sell within 7 years or so. You should calculate the tax savings each year and compare that with your possible monthly mortgage payments and your current rent payments. However, it also depends on if real estate prices in your area are falling. In Cali real estate increases every year pretty much.

 

[bran987]

In Cali real estate increases every year pretty much.

http://calculatedrisk.blogspot.com/2005/03/california-real-estate-prices-boom-and.html

you real estate noobs fuggin' kill me.

 

[DieselGunz]

I live in south Connecticut. In the area you have Greenwich, Darien, Rowayton, Westport, Southport, Westchester, Rye, Scarsdale and of course, Manhattan. Prices are asinine...

VERY nice area been there to check out a colonial i was interested in buying.

 

[vinylgroover]

as Bran said, i wouldn't be buying if you are not sure whether you will be there more than 2-3 years.

 

[lastcall1]

I wouldn't buy right now the way the housing market is. I just sold my house in RI. I bought it four years ago as a forclosure and fixed it up. I made some good money on the sale, now I'm going to rent for a while and wait for the housing market to come down before I buy again.

 

[MattTheSkywalker]

Buy it.

Have some fun.

Stop trying to count every last penny and live a little.

Uptight = tired.

 

[nycgirl]

Buy it.

Have some fun.

Stop trying to count every last penny and live a little.

Uptight = tired.

^^
I agree with him. I'm glad I'm buying my place. The price, being inside the D.C. beltway was a bargain. Its small, isn't much . . . but it's mine. With rent going up every year and more and more apartment buildings converting to condos . . . I would've been a fool to not have walked into that sales office.

 

[vinylgroover]

Buy it.

Have some fun.

Stop trying to count every last penny and live a little.

Uptight = tired.

matt, if he wants to buy something to live in and he's not sure if he will stay in that state, he possibly could waste a lot of money if he decides to pack up and move state........assuming that he doesn't have the means to hold onto it as a rental property

 

[bran987]

Buy it.

Have some fun.

Stop trying to count every last penny and live a little.

Uptight = tired.

That's a huge decision to treat nonchalantly. I'd rather be penny poor and dollar rich, than penny rich and dollar poor. It's the biggest investment decision of his life to date, and what a terrible taste it would leave in his mouth to have to sell his first house and be upside down. If he's going to have a $3,500 mortgage/tax/insurance payment, why not rent a cooler $3,500/month apartment? Eliminate the risk of a short-term decline in real estate prices, and buy a house when he knows where he wants to live for awhile longer. That way he could have fun as well. Maybe I don't know the market well enough, lol, can you rent a cool place for $3,500 up there?

On the other hand I do admire Matt's idealism and belief that the easy solution to a spending spree is to just make so much money it doesn't matter. It's beautiful.

 

[MattTheSkywalker]

That's a huge decision to treat nonchalantly. I'd rather be penny poor and dollar rich, than penny rich and dollar poor. It's the biggest investment decision of his life to date, and what a terrible taste it would leave in his mouth to have to sell his first house and be upside down. If he's going to have a $3,500 mortgage/tax/insurance payment, why not rent a cooler $3,500/month apartment? Eliminate the risk of a short-term decline in real estate prices, and buy a house when he knows where he wants to live for awhile longer. That way he could have fun as well. Maybe I don't know the market well enough, lol, can you rent a cool place for $3,500 up there?

On the other hand I do admire Matt's idealism and belief that the easy solution to a spending spree is to just make so much money it doesn't matter. It's beautiful.

I'm working in a guest house at a $15M estate on Long Island right now. It helps put shit in perspective. A few more years of this....

Yes, you can rent something very nice for $3500 / month, and your advice is prudent.

OK, here is some real advice for my friend sawastea:

I contend that the NY area real estate market is slightly overpriced, but that a significant drop is unlikely. There will probably never be a mass exodus of high paying finance jobs from the NYC area.

I would advise that he NOT BUY in january, since prices increase with the influx of Wall Street bonus money. However, look at a lot of properties, offer well below market, and make a deal.

 

[bluepeter]

The market is overpriced, if you aren't in it for the long haul, don't purchase.