Seriously how do people afford buying a house?

amother

DarkMagenta

Mon, Jan 24 2022, 9:03 am

Op I have the exact same question!
On this thread everyone seems so thought out and normal but in the Brooklyn I live it doesn’t seem this way and honestly I also wonder if there is something others r doing right and we r not. ;-)
Me and my husband both work. I’m a professional. We have good income and live frugally. We managed to save up and are buying a nice condo in bp now. But honestly there is so much more than a down payment! All the other fees that add up r huge! I personally think the downpayment is the least if the problem cuz u can find ppl to lend u and u have time to pay back. What I’m struggling to understand is how youngsters who r NOT living frugally and r not coming from wealthy homes, their wives r not working and they buy 3 family houses. I’m not just making this up. And I’m happy for them. I live in a building and see a LOT! Quite a few of my neighbors r living on extremely high standards (designer clothing... new stuff every other day... latest gadgets...) the women r not working and r out shopping a lot. They always spoke abt how they wud NEVER buy anything but a house. A condo is kind of a downgrade to them. Some of them already bough big houses and r not just moving in, they r renovating luxuriously first... I know it’s not all rosy but some of it just seems so off. I’m not discussing the attitude towards condos but obviously ppl r making choices they can’t really afford.
Sorry for the long post. U might think I’m J or something like that but if u know me as a person u wud know that’s not the case. Am just stating things as I c them and am just curious how ppl do it. I’m actually extremely proud of the condo we r buying cuz it’s all from honest hard earned money of our own! :-)
Btw am ch’v not saying that this is the case with everyone buying a house! No way!! But quite a few ppl I know r buying in such a way. And some of them wud repeat casual stories of how they order stuff on amazon (e.g doona) use it for a few months and return it. When they wud c my horrified reaction they wud make me sound like I’m nuts and they r doing the most normal thing on earth!

amother

Silver

Mon, Jan 24 2022, 9:07 am

amother [ Feverfew ] wrote:

Re NJ being cheaper: everyone should be aware that property taxes in NJ are insanely high and will add close to a thousand a month to your mortgage

In SI taxes are btwn 8 and 10k and in nj it's is higher but depends where, I believe it's generally btwn 12k and 15k. But the NY housing prices are double. Of I wouldn't have to stay in my Bec of parnassa we wld have bought elsewhere much easier.

Amarante

Mon, Jan 24 2022, 9:53 am

amother [ Silver ] wrote:

Taxes in NYC are lower than suburbs because NYC has a tax base from commercial taxpayers and so isn't dependent on residential housing to cover their expenses.

The suburbs typically don't have the same enormous commercial tax base and are much more dependent on homeowners to cover expenses.

amother

Powderblue

Mon, Jan 24 2022, 10:08 am

Amarante wrote:

NYC also charges additional income tax (ie, you need to file federal, state, and city)

Amarante

Mon, Jan 24 2022, 10:15 am

amother [ Powderblue ] wrote:

NYC also charges additional income tax (ie, you need to file federal, state, and city)

An individual's actual financial situation can differ but I was commenting solely on property taxes and property taxes for individuals are significantly lower in NYC because NYC isn't as heavily dependent on them and also because there is a policy that favors individual homeowners.

In terms of what it might "cost" to live in city versus suburbs, there are other costs that might be lower for people living in the city. For example, commuting costs will be lower especially in terms of needing two cars versus one or even not needing a car at all for many people.

Utility costs may or may not be higher in the suburbs since typically one has a larger home and also has a lawn that needs to be watered. Smile

So actual living costs really are everything a family spends to "live" their lifestyle. An individual would have to add up the costs factoring in all costs and then weigh the benefits to determine what make sense - economically and intangibly.

amother

Powderblue

Mon, Jan 24 2022, 10:18 am

Amarante wrote:

We agree

I was pointing out another way NYC brings in income besides for real estate tax.

amother

Bluebell

Mon, Jan 24 2022, 11:48 am

amother [ DarkMagenta ] wrote:

I DON'T GET IT EITHER. I ACTUALLY FEEL STUPID NEXT TO ALL THESE PEOPLE

Amarante

Mon, Jan 24 2022, 12:19 pm

No one really knows what the finances are of anyone except possibly very close family and even then many people don't share their exact financial status with parents, children or siblings.

There really isn't any mystery in terms of how people afford "luxuries". You can't make money out of nothing unless you are a counterfeiter - so assuming that the source of money is legitimate - "youngish" people either inherited money or were gifted the down payment or a significant amount of the down payment by parents or grandparents. Baby boomers (ie. the parents and grandparents) are sitting on a lot of wealth which hasn't been transferred and so many of them are gifting the inheritance so the kids can get a home.

And you really never know what people's wealth truly. People can be "fronting" with credit cards for flashy consumer goods and be driving leased cars - for example or they are the opposite and are wealthy but live modest "middle class" live styles.

Many extremely wealthy people live relatively modest lifestyles. I have friends like this - it is obvious that they are "comfortable" but no one would suspect that they have assets of $100 million or more. They drive older Lexus and Suburu cars but they bought very expensive homes for their children and pay all tuition through graduate school for all the grandchildren. I know how rich my friend is because I have known her since we were 16 and she is like a sister but most people have no idea.

amother

Pistachio

Mon, Jan 24 2022, 12:24 pm

STovah wrote:

Not NYC taxes. If you live in NJ and work in NY, you will pay NY state taxes and get a credit for that on your NJ state return. If you live in NJ or Rockland/Nassau/Westchester/wherever county in NY and work in NYC, you will not pay NYC taxes.

I don’t know. We live in Nj and my dh works in a diff state with city taxes and he has to pay it all (we get refund from nj and have to pay, state and city taxes were he works)
According to my accountant.

For us it’s complicated. Business is based out of nj. We physically live in nj. Dh works in diff state. We have to pay taxes to city snd state he physically works in even though his office pays nj taxes. It gets complicated.

Amarante

Mon, Jan 24 2022, 12:26 pm

amother [ Powderblue ] wrote:

We agree

I was pointing out another way NYC brings in income besides for real estate tax.

OK - I misunderstood as I thought that you meant that NYC residents had higher living expenses just because of the NYC taxes.

I know about the NYC taxes because my parents lived in a two family house in Brooklyn and my father explained about the tax benefits versus our relatives who lived in the suburbs. Of course they also specifically wanted the NYC lifestyle as well as they both worked in Brooklyn and enjoyed the city amenities. And my Bubbe lived in the apartment downstairs of our house and they had specifically bought so she could live in the other apartment of the house.

But they also were fine with the housing compromises they made since the suburban homes that my relatives lived in were obviously much larger and more gracious.

Ironically I am also the recipient of beneficial property tax because of Proposition 13 which essentially freezes your property tax at the assessed value of your home when you bought it.at 1% of the purchase price. There are very modest increases but it favors people who have lived in their homes for awhile since your neighbor could be paying triple what you are paying because they bought later at a higher purchase price. I don't necessarily support it all the way because it also protects very wealthy commercial property and the city suffers because it doesn't have adequate funding for essential services like potholes and fire department etc.

amother

Charcoal

Mon, Jan 24 2022, 1:14 pm

Are people buying these large expensive houses paying full tuition? We pay full and have no money leftover for a house to fit our family size. Yet most people around us are living in houses close to double our size, with the same amount or more kids. They are not living frugally (my kids get to hear about all their vacations).
I would love to know if everyone who is buying a house is paying full tuition.

amother

Pearl

Mon, Jan 24 2022, 1:16 pm

amother [ Charcoal ] wrote:

And how will that help you? Either you’ll feel bad that they’re managing better than you or you’ll be upset at a whole lot of people whose actions you obviously cannot control.

amother

Powderblue

Mon, Jan 24 2022, 1:20 pm

amother [ Charcoal ] wrote:

FWIW, a gadol (not giving his name because I don't want to quote him without knowing if this was an individual psak or an overall opinion) told my parents before they bought their house that they should buy a house, even if it means not paying full tuition because of it.

So it may be worth rethinking your perspective, at least about the tuition. I can't answer about vacations. I'm with you on that one.

amother

Stone

Mon, Jan 24 2022, 1:22 pm

amother [ Charcoal ] wrote:

Yes, but our house is tiiiiny and our vacations are too.

Not sure about the people in the very big houses, etc.

amother

Celeste

Mon, Jan 24 2022, 1:24 pm

amother [ Charcoal ] wrote:

Why is it hard to believe that people are making more money than you?