Interesting article: Middle class in Manhattan

[wanderlustfoodie]

Jan 19, 2013 18:15:40 GMT -5 @notquiteblushing said:

Jan 19, 2013 16:50:29 GMT -5 smiley said:

Thanks for sharing. This is very interesting. I wish more places were this strict with their requirements so we wouldn't be in the housing crisis we have been experiencing for the last several years. I have never dealt with condos (nor know anyone who lives in one) so I didn't know you could have those restrictions on your building.

So I guess you put 50% down on your house and have half the purchase price just chilling in your bank account then?

Yes, that is not an uncommon expectation for many buildings in Manhattan, especially on the upper east side.  

Friends of mine saw a 1.5mm apartment with 3000/month maintenance and 35% down. The broker said the board had rejected the last 2 potential buyers because after the $550,000 down they only would have had $500,000 leftover in liquid cash. Coop boards are much tougher than lenders and can reject potential buyers for any reason they want after the required coop board interview (where you basically present a hundred pages demonstrating all your financial information).

[Deleted]

Jan 19, 2013 18:37:04 GMT -5 wanderlustfoodie said:

Jan 19, 2013 18:15:40 GMT -5 @notquiteblushing said:

So I guess you put 50% down on your house and have half the purchase price just chilling in your bank account then?

Yes, that is not an uncommon expectation for many buildings in Manhattan, especially on the upper east side.  

Friends of mine saw a 1.5mm apartment with 3000/month maintenance and 35% down. The broker said the board had rejected the last 2 potential buyers because after the $550,000 down they only would have had $500,000 leftover in liquid cash. Coop boards are much tougher than lenders and can reject potential buyers for any reason they want after the required coop board interview (where you basically present a hundred pages demonstrating all your financial information).

Oh that's not in dispute.  I was taking issue with the poster who thinks the rest of the country should be held to that standard.

[wanderlustfoodie]

Oh, got it, nqb. I misunderstood your post

[Deleted]

I feel like the math in that article doesn't make any sense in regards to my life. I live north of Boston. DH and I make just shy of 100,000 & have one child. I feel like we are clinging to middle class with our teeth at times. We own a VERY small home in a shitty school district. We save for retirement ( but not to MM standards), We save for college for DS ( but not to MM standards). We take on vacation a year ( approx 2k).

AND we don't pay for daycare, so we should " technically" be rolling in it.

I guess I just don't see how someone making 160,000 is middle class in Manhattan. For a family of 4 that seems absurdly low. I feel like that would make someone " middle class comfortable." in the suburbs North/NW of Boston. I feel like with a HH income like that you could afford a 4/2 2000 square feet in an average school district a little further out, or a 3/1.5 1200 square feet in a good school district closer in, and save on target for things, and afford a vacation yearly ( under 3k).

[wanderlustfoodie]

Sorry, duplicate.

[wanderlustfoodie]

Sorry, duplicate.

[SusanBAnthony]

So why the heck is the coop fee 2 or 3k a month? Is it because they have doormen to pay. Or building maintenance? Or what? That seems insane!

[wanderlustfoodie]

Oh, got it, nqb. I misunderstood your post

[Deleted]

Jan 19, 2013 23:02:07 GMT -5 SusanBAnthony said:

Doormen + amenities + in some cases, property taxes

[wanderlustfoodie]

First of all, sorry, everyone for the multiple posts. That was my first time posting on the new boards with my phone and clearly it was a disaster.

To answer the question about what the maintenance charges are for, it varies. the first thing to keep in mind though is that when you purchase an apartment in a coop, you aren't technically purchasing real property. You are purchasing shares in a corporation (the building). Thus your maintenance is a formula of the number of shares your apartment has in the building (which is determined based on its size, high floor, etc.).



So the maintenance includes the building taxes, salary and benefits for building staff (doormen, supers, etc.), and also goes towards the cash reserves for whenever the building needs to do capital improvements (repair elevator, replace roof, paint facade, etc.) in the hopes that you've collected enough maintenance from all the owners such that you don't need to tack on an additional assessment (surcharge for a finite number of months in addition to the monthly maintenance). Prospective buyers are allowed to review the building's financials prior to making an offer in order to determine whether the building is financially healthy. A history of assessments is seen as a negative because it indicates the board doesn't know how to calculate maintenance to factor in the cost of repairs. Low maintenance also can be a cause for concern because it might mean that the cash reserve is so low that the next time a major repair is needed the maintenance will sky rocket.  Some people love a building so much that they won't care if it has been consistently running in the negative for years. Others run away from buildings that don't seem financially secure because unlike living in a single family home, whether the board knows what it's doing along with whether your neighbors pay their maintenance on time has a very direct impact on you because you will be liable to make up the difference if it all goes wrong.

[sratsey]

Jan 19, 2013 12:51:21 GMT -5 mskitkat said:

I am going to send this to my family. They live in LCOL areas and cannot understand why my H and I say we can't afford to buy a house, even though we make what is to them a very large sum of money. And we don't even live in Manhattan. We're in Westchester. We looked at moving to Manhattan but didn't think we could afford the rents there, let alone keep a car. It's crazy.

Westchester is crazy. Even if you could find a home, you would have to make a significant income just on taxes. My sales agent was telling me that in her area of Westchester her txes are $30K a year for a 3000 sf home that was built 25 years ago.



H and I lived in a 1 bedroom/700 sf apartment prior to having kids. 
Our rent was $3000/month because we paid $500/month for parking.
If
we had never decided to have children, it would have been very easy for
us to stay in Manhattan and I would have happily rented forever.  But
once we decided to have a family, there was no way we could afford the
space that would have been necessary for 2 kids.

[Deleted]

BFF's FI certainly hit the jackpot with his apartment. He bought in midtown (Hells Kitchen to be exact) 17 years ago for pennies. Now worth over 1.5Mil and the co-op board never would have approved him today, even though he earns around 200,000. He is going to rent that puppy when they move back to NJ for a few K more than his mortgage payment every month. Cash cow.

[bronxgirl]

Whenever I miss living in Manhattan articles like this bring me back to reality.

[wanderlustmom]

Jan 20, 2013 20:31:16 GMT -5 bronxgirl said:

Whenever I miss living in Manhattan articles like this bring me back to reality.

I was thinking the same thing.  We just really can't afford it but I miss it terribly.  I hope we move back and rent when the kids go to college.

[frlcb]

Jan 19, 2013 12:54:44 GMT -5 runblondie26 said:

There are so many half finished McMansion sub-divisions OTP, houses are dirt cheap here. Even ITP, there's plenty of 85k real estate to be had depending on the neighborhood. I'm sure that house isn't in Druid Hills.

I don't know anywhere ITP that houses are 'dirt cheap'. Lots in my ITP neighborhood are selling for $300k plus, for just the lot, not to mention the house that goes on it. Maybe if it is in a completely undesirable area it could happen. But I think using that comparison in this piece is completely 100% misleading.

[Deleted]

This board continues to make me happy I live in a LCOL city.