It’s quite amazing, the number of purchasers that are looking for a new place to live or even those that want to rent.
Finding a specific home, condo, townhouse, or co-op that meets all your “needs and wants” can be challenging in the current frenzy of a seller’s market.
As I have said in last week’s column, inventory is at a 30 year low and buyer demand is at a 35-year high!
Kind of tough trying to satisfy everything you are looking for, especially if you a buying.
You can keep on shopping for that perfect “place to call home” or sit down and go through a trade-off scenario and take a paper and pen and discuss with yourself or if buying with your significant other, what are the most crucial items that you absolutely will not do without and those that you are willing to forgo; and maybe you will have them on your next purchase.
Because there is such a narrow choice in many areas (especially towns that have above average school districts) that if you want to buy, you might have to eliminate some things, so you can get into an ownership position.
As I have repeatedly said in the past, renting is a dead end street because you are providing all the benefits on a “silver platter” to your landlord.
Beg, borrow and steal (only kidding!) to get that down payment.
However, do not beat yourself up and go above your affordable price point. You surely don’t want to live for your mortgage and totally change your lifestyle.
But at the same time, when buying, try to pick three to five towns, if possible, to increase your choices of possible places you would consider residing.
It may not be your last place, but at least you can stop the “bleeding of your wealth” out of your pocket into someone else’s.
The sooner you can go this, the sooner that you can begin building your equity and your future wealth.
Even if the Federal Reserve raises rates, they should be minimal based on the tightness of the market of inventory and the demand on the money supply.
The inventory of moderately priced rentals as well as homes on Long Island is much lower than normal, although on the North Shore, there appears to be an increase in new high end rentals, due to all the construction over the last year or two.
Even in New York City, the luxury market for purchasing and renting is a bit soft, with much more sellers and landlords being negotiable.
Many are seeking more reasonable purchase and rentals and are gravitating to the outskirts of Brooklyn and Queens and even into Long Island, where we don’t have that additional and burdensome New York City income tax.
The prices of the mid range and luxury from $3,000-$10,000-plus per month is more expensive than the cost of a mortgage plus taxes in many situations and reasonable enough to allow families to purchase at the current low, low interest rates and at the same time build their equity, overall wealth and roots in their community over the long term.
So, I ask you, what are you willing to trade off to be an owner?
How about a one-car garage instead of two?
Unfinished basement, instead of finished? Maybe instead of a master bathroom, just the hallway bathroom or maybe, if possible, a Jack and Jill bathroom, by adding a door from the master into the hallway bathroom.
Maybe a smaller property, which will have lower real estate taxes?
How about a fixer-upper that you can repair and upgrade it the way you want it to be?
Whatever you are willing to sacrifice to be an owner, it’s worth it, when you look back 20-30 years from now and realize whatever you sacrificed and traded off, you hopefully will be better off financially; because it was like money in the bank where you raised your children, enjoyed your life and paid off your mortgage instead of paying rent.
More important, as you build your equity and value, that could be just a steppingstone to a second or third home in the future.
Think about what rent just might be in the future; I think it’s pretty scary for those in that unfortunate position.
Even, if you can only purchase a condo or a lower priced co-op, it will still be more advantageous any way you look at it.
Remember a fixed mortgage is stable for the life of the time you are paying it down; but rent is not and generally increases over the years and you have no real control.
I hope everyone joys the Labor Day Weekend and I pray for those who have lost so much in Houston, Texas and the outlying areas.
Below is a link that you could donate, if you care to, whether it be money, clothing, non perishable food, etc. https://emergency.portal.texas.gov/
Phil Raices is the owner/Broker of Turn Key Real Estate at 7 Bond St. in Great Neck. He has earned designations as a Graduate Realtor Institute and Certified International Property Specialist.
He can be reached by email: Phil@TurnkeyRealEstate.Com or by cell (516) 647-4289 to answer any of your questions or article suggestions.