New York vs New Jersey

Andy Nguyen

Thanks Gus, Joe, ljp99 for the insightful responses.
@Ljp99
I live near Riverdale for years and love the neighborhood. Can you comment on what's going on there real estate wise? What's the average price for a single family detached house, apt, etc?
It seems to me you need a car to live there. The area is very woody and lot of hillsides. What are main subway/bus stops there.

Any specific area in Riverdale you recommend?

ljp99

Hi Andy -

We bought a relatively new townhouse in Riverdale a couple of years ago - and the prices have been rising steadily on similar houses near us. It depends on the location of the house in the area.

Spuyten Duyvil is more expensive since its closer to Manhattan and plenty of hirise luxury condos - with great views. Central has mostly lower rise apt buildings (and newer condos currently being built) - with a commercial district. North Riverdale (where we live) has the most inventory of houses - with alot of apts too in the Skyview development. Fieldston and "West of Pkway" are the most pricey in the area, some with large suburban plots of land, and great estate housing. Several of the major brokerages - Trebach Realty and Halstead websites have plenty of info regarding pricing.

Commuting is easy. Express buses go to midtown east/west and downtown from many stops in Riverdale. Metro North has 2 stops - Sputen and Riverdale (thats the method of transport I take to Grand Central - 25 mins) and the subway goes as far as 242nd St - with several local bus connections.

Its one negative is that shopping isnt that great - compared to the city or even Forest Hills or Bayside (my other points of reference). Easy enough to get staples, but malls and other stores need a car or ride into Manhattan.

Yes - very hilly and scenic - go to Wave Hill and walk around - really can forget youre living in the city.

Hope this helps,
Larry

Andy Nguyen

Larry,
Thanks for the info. You are on my Fav 5 list now
Fieldston is where I want to live when I become a hedge fund manager or something.

since you have lived in some of the areas people mention, where would you prefer? Bronx has Riverdale and little else while Queens has many good places.

Thx.

Very happy with where I live now. I still go back to Queens frequently since my immediate family lives there (both LIC and Bayside). Given unlimited $, of the areas previously listed, I would also consider the "West of Pkway" area of Riverdale, and Douglaston north (near the water) as well as Forest Hills Gardens. Homes in all those areas start at 1.6 or 1.7m (for small ones). Its all a matter of preferences. Theres no right answer. BTW - nice website - Im an alumnus of Baruch MBA Finance (with an unofficial concentration in stats) before they created the MFE program and have been lurking occasionally. Andy Nguyen These are pretty informative posts. Keep them coming everyone. Through Larry's posts, I got to know about the two companies that specialize in the Riverdale area. If anyone know which agencies cover the aforementioned areas in Queens or NJ, do let us know. Larry mentioned about Wave Hill. I remember when I was in grad school, the Math dept organized picnic trip to Wave Hill in the spring. I never understood why people want to go hiking in the Bronx but just now looking at its website, it's like a garden inside the city. http://www.wavehill.org And while I was googling for Wave Hill, I came across this site The Bronx Andy Nguyen This thread proves to be so informative that I need to bump this up for continuing discussion I wonder with the kind of real estate price in NYC, how long would it would take a FE graduate before he saves e Even if they make 100K+ a year, it would take several years to get 20% down payment. Or do you have to inherit some kind of fortune or family members have to give you some serious$ ?
How does it work for the independent, young professionals like most of us here? Is the rent game also end game?

charlesdwright

New York vs. New Jersey

Is there any question? New York vs. what?

doug reich

Some guy
I wonder with the kind of real estate price in NYC, how long would it would take a FE graduate before he saves e
Even if they make 100K+ a year, it would take several years to get 20% down payment.

I know you're reading the real estate section of the NYT. Do you ever read "The Hunt"? The folks in there are often couples making less than $100K combined, and they're all finding places in NYC or Jersey City to buy. If teachers and computer programmers can scrape the dough together, a quant should be able to. You certainly have to adjust your expectations sometimes. doug reich Some guy Is there any question? New York vs. what? When someone lives in Jersey City, it's "not that far" from Manhattan. When someone lives in Manhattan, they don't even know what's across the river. I think we know where you live. Andy Nguyen I know you're reading the real estate section of the NYT. Do you ever read "The Hunt"? The folks in there are often couples making less than$100K combined, and they're all finding places in NYC or Jersey City to buy. If teachers and computer programmers can scrape the dough together, a quant should be able to. You certainly have to adjust your expectations sometimes.
I certainly read everything in the real estate section of NYT, especially The Hunt. Some of the stories there seem a bit of a stretch. I'm sure there are more to it than the stories make out to be.
If the couples making less than 100K a year combined, they live with the parents for a few years, stop going out for dinners, etc. It's kind of extreme.
Let's do some simple math.
Say you are a newly minted quant whose combined income yearly is 200K. You want to buy a co-op, condo, house in the range of 600K-700K which is OK in an OK neighborhood.
How long would it take you to be qualified for a mortgage, save enough for down payment, and all the hoopla that goes with house buying.

Somebody here must has done this before (preferably very recently) and kind enough to explain the ropes.
Personally, home owning is few years down the road but I like to know what kind of food should I cut off now so I can save

alain

Older and Wiser
600/700K is a lot of money if you think about it. Your monthly payment will be really high. I read somewhere that your monthly payment should not be more than 1/3 of your monthly salary.

Also, Wall St salaries are usually measured as total compensation so you will have a huge chunk of money coming at bonus time (and sometimes that chunk will be stock instead of cash). It means you will need to plan yourself in terms of mortgage payments.

for a bank, you should be able to prove that you earn the money you claimed and that's usually shown in tax papers. They don't trust your current paystub (I went through this once). It usually takes couple of years to save enough for downpayment.

woody

For a condo you can usually get away with a 10% downpayment. The bank will actually issue two loans, one for 10% of the price with a slightly higher interest rate. It's basically like borrowing half of your downpayment. However, this setup might be tough now unless you have great credit.

I think the 1/3 of your salary refers to gross salary. So if you make 150k, you can afford 50k/year for mortgage payments. Seems high to me. It's basically 1/2 your take-home pay.

Brooklyn.

Let's assume you put 20% down on a 700k condo. (Any less than that and you have to pay mortgage insurance, which is an extra couple hundred dollars a month, and what's the point of that?) At a 30-yr fixed rate of 6.5% APR, your monthly payment will be $3,539.58, according to the PMT function in Excel. Yes, it's true, the payment on the interest is tax-deductable, but you also have to pay property tax, so the tax benefit evens out. You also have to pay Maintenance and Common Charges, which can be anywhere from 300 to 1500 per month. Let's say$700, to be safe.

This means that the monthly charge for owning a 700k condo in NYC will run you approx \$4,239.58. Let's be generous and say you are making an annual salary (ex. bonus) of 160k, maxing out your 401(k) at 15,500, spending 500/mo on a health plan, taxed at 30%. Your take home pay will be somewhere around 8k/mo. You'll end up paying just over half of your take home pay on housing, most of it going towards common charges, property taxes and interest payments.

IlyaKEightSix

Well, Andy, NJ has the highest car insurance rates in the country (albeit cheaper gas =P)...that said, my friend who works in Jersey City says that it is literally madness to drive to Jersey City since there's so much traffic.

Now ATM, I live outside of Philadelphia, so I'd have to ask some of my other friends how life is closer to NYC, but in my experience, it takes me about two hours between waking up and arriving to work in center city Philadelphia, and around an hour and fifteen minutes to get back. (I bike 2.5 miles to the train station every morning--and back of course). How important are those extra moments of sleep, and extra time with the family?

Now I'm very unqualified to say this, but if I had to choose between having less money to play with but live much closer to my workplace, I'd definitely be closer to my workplace. If you're good at what you do, and you're doing finance, I feel that no matter where you live, eventually, you'll make enough that the extra time you'll have will be worth the money.

But that's just the opinion of an undergrad with one year left. Take it with a grain of salt (or a few!)

Andy Nguyen

A long commute in exchange for huge land is not my cup of tea. It may work for some.
One of my co-workers used to live in NYC and moved to PA when he has a child. For 200K-300K, he has a huge house on more than one acre of land. His neighbors are few and far between where he lives.
In exchange, he wakes up at 6AM, drives to the bus station and take the bus to Grand Central. The bus arrives at 10AM. The reverse commute starts at 6PM and he got home at 10PM.
He can argue that the new estate is working out great for his child and I'm glad he can put up with it.
That definitely will not work for me. I like to spend as little time commuting as possible.

woody

Let's assume you put 20% down on a 700k condo. (Any less than that and you have to pay mortgage insurance, which is an extra couple hundred dollars a month, and what's the point of that?)

The 2-loan setup I mention above is to get around this insurance.

Felix

What do you think about Jersey City or Hoboken?

Jersey City is obviously more affordable than Manhattan and very close to the City, it is completely urban and traffic can be heavy, but nothing compared to Manhattan. It is quieter and generally cleaner in the wealthier areas.
There are fewer restaurants and bars, but in the downtown area (#1,2,3 below you can get a decent variety within walking distance, but of course not the choice that you have in Manhattan).

Depending where in JC you live, your PATH train ride to downtown (World Trade Center) is approximately:
5 minutes from Exchange Place
8 minutes from Pavonia/Newport or Grove Street
11 minutes from Journal Square.
To that you obviously have to add your walking time to and from the station.

Jersey City can be roughly divided into 6 sections:

1. Paulus Hook area by Exchange place: old brownstones by the Hudson river, condo's start at 4-500K, short commute, nice neighborhood.
2. Pavonia/Newport and Exchange Place: new high-rise appartment and office buildings. Condo's in similar price range, beautiful views. Very clean and new.
3. Grove Street (downtown area): large area with brownstones and small apartments. A whole brownstone in this area runs between 1M and 1.5M depending on location and condition. You can find a small condo in this area starting at 300K, farther away from the PATH.
4. Journal Square area. Mostly families and older residents. Less gentrified. Two-story houses with a small yard, and a car port in this area start at 300K. Here you begin to need a car, depending on the area. The "Island section" is on the nicer side and is close to the PATH train. Another decent section is the area by Saint Peter's college. Some sections are less safe.
5. JC heights. Longer commute since you need to take a bus to the PATH or a bus to Port Authority. Similar prices as #4. Seems generally safe.
6. Bergen/Lafayette: mostly African-American neighborhood which is also farther away and longer commute. Crime can be a problem.
Looks like we have a few NJ residents here. What do you dislike about living in NJ?

I have lived 10 years in the NYC area, mostly in JC with short exceptions in Manhattan and Brooklyn.
What I dislike about living in JC is that there is no bridge so I could bike across to Manhattan like you can from Brooklyn. That said, you get more house for your money in JC and the PATH train is fast enough and reliable.
Other than that, I sometimes miss the 'alive' feeling of Manhattan in the evening and the large choice of restaurants, but if you live in #1,2, or 3 below you have a relatively decent choice.

Taxes for a newly converted condo in downtown JC costing 300-350K are about 4K a year, same for a house in a similar price range by Journal Square.

Hoboken:

the prices in Hoboken are comparable to those in the expensive areas of Brooklyn, parking is a nightmare, there are lots of restaurants and bars and lots of young people.
The train ride to WTC is about 8 minutes, to 33rd Street about 18.

Andy Nguyen

Felix,
Thanks for the very good post. Just for clarification, when I say NYC, I mean all boroughs excepts Manhattan because it's just too pricey for most of us to realistically think about buying there
2M for a walk-up studio? No thanks.
The more senior traders I work with have their own apts in desirable neighborhoods in Manhattan but for most of us junior guys, it's more like Queens, BK, BX, SI or the like.

ljp99

Andy -

This is precisely the reason why buying co-op or condos are better than shelling out rent for many years. You can build up equity (in up-markets) which can be used to finance the house that you eventually want to buy.

Both myself and wife owned co-ops individually, which we both sold in order to buy the house very close in description to the one you describe.

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