Posting has been a little light this week. This is the week I get to have my son over, so I’ve been neglecting the blog a bit. Here are some quick hits.
- We went to three open houses on Sunday. Nothing really that we’d think about buying, but there’s always something to learn. I’ve been trying to convince my wife to do the write up, since she’s a much better writer than I am, but either way, I should have a write up for them soon.
- Another open house on Thursday. This one has some potential.
- My friend Trevor has been en fuego with his blog posting, if you’re interested in the mortgage or real estate biz, you should really check him out. I’m going to redo his site a bit in the next week or two, once I get a little free time.
- At the Thursday open house I ran Martin Hepworth from Netter who said he read my blog and gave me some props.
- There’s been some people asking me if I could do some web site work for them. I’m not actively soliciting for new clients right now, what with the house hunting and the baby on the way, but I’m always open to talk, especially if you’re local or close to Babylon. If you’re interested, drop me a line at info (at) homeinbabylon.com
- My wife is 36 weeks along now. We just did the 36 week ultrasound and all looks good. I can’t wait to meet my new, baby daughter.
- Torta Fina, the new bakery on Deer Park Ave is now open. I stopped by today for a cappuccino and some cookies. It’s a nice place, but I’ll miss the bran muffins from Wilhelms.
- I took some pictures at Hawley’s Lake Park. I’m planning to post them up soon.
Lastly, if you’re reading this blog, please feel free to leave a comment. Click on the Comments link under this post and let me know what you think or just say hi.
Hi,
My son and daughter-in-law are now renting in Babylon Village and looking to buy a home here, too. They have a daughter who is two and a half, so they would prefer Babylon Village Schools. Your blog has been a wonderful source of commentary on the real estate market in Babylon. Their price range is about 340,000 to 360,000, so they’re somewhat limited.
Just a thought, have you considered sharing the excellent grant opportunities in Babylon with your readers? Also, how about a “For Sale By Owner” section?
We also want to thank you for creating this blog. It’s interesting, informative, unique, and well-written.
Hi Laura, thanks for reading and thanks for the compliments.
I’ll think about doing a FSBO post. That’s a good suggestion. I’m not aware of any grant opportunities in Babylon. I’d certainly like to hear more about that.
If your son and daughter-in-law are set on Babylon schools, but stuck in that price range, they might think about looking at W. Babylon homes that are in the Babylon school district. There is a small section of them northwest of the village, up by 109/Little East Neck.
Best of luck to you and them.
Posted here because your friend Trevor hasn’t enabled comments. I appreciate that friendships are often illogical things, and this is strictly business, based solely on what he himself has posted. He’s ‘en fuego’ all right… if you mean burning down the house(s).
Example 1:
Buyer has to borrow $40k from Mom for a down payment and needs Auntie to co-sign because the buyer’s husband can’t hold a job (to his credit, he seemes to have always gotten another one quickly). Exactly who did Trevor “Rescue”? From what? Look at the double digit default rates of FHA deals when the borrower puts no money down (e.g., seller-funded DPAs recently written out of FHA by the recent federal bailout). The deal in that post is going to take down the whole family — daughter, husband, mother and aunt — in less than 3 years. the ‘rescue’ would have been convincing the whole family to use some financial discipline, most importantly daughter and hubby.
Example 2:
Title: Intangible Benefits of Homeownership
Money quote: “You can’t put a price on this stuff. Period.”
Well, Trevor certainly is a shrewd marketer; obviously going back to the pitch that worked before the boom since the meme “house prices only go up” has precious little credibility these days. Trevor brings us back to the thinking that started the boom rather than the more recent thinking that continued it… no price for happieness… you’re worth it (even if you can’t afford it). That’s the thinking that Long Island’s 60+ year-old post war shacks that haven’t been decorated since Roosevelt was President (guess which one) are magically worth 10x median income. No, I’m not about to fund ma and pa’s tropical retirement dreams with a lifetime of debt servitude (with a few precent YSP to Trevor).
Call this the tangible benefit of non-homeownership: money in the bank. My wife’s girlfriend has a cape in Nassau that’s down at least $60k in 2.5 years since they bought, and a marriage on the rocks under the financial strain. I have been ‘paying myself’ the mythical house payment that would have bought a so-called middle class (for Long Island) shack, less a very modest rent, and have amassed six figures of cash in the same time. Put a number on the “intangibles” and all of a sudden people (not a buyer who has an emotional and financial investment in their sunk decision) start to think that the ‘intangibles’ aren’t worth quite so much.
Well, if you’ve been reading the blog for any appreciable length of time, you should know that I mostly agree with you. Trev and I have been friends for years and we’ve had similar arguments in the past.
I told him in 2005 that the real estate market was becoming overheated and that we should look for the bubble to pop. He argued with me pretty strongly to the contrary. He has a certain point of view about housing and home-ownership and he’s stuck to that in good times and bad. He bought his first house in 1989, at the peak of the previous housing bubble, and to this day he doesn’t think that it was the wrong thing to do. It sounds kooky to me, but that’s his POV.
You’re being a little unfair here. In your first example, you’re assuming facts not in evidence. Yes, the couple is getting money from her mom to help buy the house, but you’re just assuming that the couple isn’t putting any of their own money into the deal. Given the state of mortgage credit and the prices of homes here on LI, they’re likely not doing the deal with just $40K in hand. And getting $40K from a close relative isn’t the same thing as getting government or seller-funded DPA. That’s mom’s money and it still counts as having “skin in the game”, as they say.
I know Trevor and he wouldn’t do the deal if he didn’t think the couple could make the payments. You can’t say the husband “can’t hold a job” just because he’s had a lot of jobs. Some people don’t like to stay in one job too long and in sone fields that’s more the norm.
Mortgage brokers have a reputation these of being amoral scum who’ll do anything to make a buck, but he isn’t and he wouldn’t. During the boom years he passed up a lot of money because he wouldn’t write a lot of those crazy ARM loans that are sinking the industry now.
I’m sitting here right now, in my rented apartment, with no water. I’m waiting for the super to fix whatever’s broken. Not that they told me either that they knew what was wrong or when it might be fixed or even that it was broken. And tomorrow they’re going to replace all the soffits in my building. They sent me a letter on Friday telling me that they’re doing this on Tuesday and that I should remove any “valuable items” from my terrace.
I’m being patient and waiting for the right house at the right price, but some times I’m more than a little impatient for those “intangible benefits” of home ownership.
C,
Thanks for engaging the discussion. Look on the bright side: if you owned and had no water on Labor Day, you’d be sitting and waiting anyway, only for the plumber to show up with a double-priced holiday callout bill. Your landlord gets that one.
I really don’t think ill of your friend Trevor, and he may have consiously avoided the worst practices of the boom years. People don’t last in any business making many decision that were as bad as those, and clearly he’s lasted. I’m just pointing out some aspects that a person having a stake in a particular deal may overlook.
My presumptions re: Example #1 — I don’t think its assuming facts not in evidence, it’s deducing unstated facts that are necessarily present to cause the stated facts to appear.
I think there is a vast differnece between Mom’s money and the buyer’s money; if I didn’t work, sweat or go without to get the money, there simply isn’t equivalent ‘skin in the game’. Is it more ‘skin’ than seller or gov’t funded gift? Yeah — they’ll still have to see each other at the Thanksgiving table after the deal goes bad — but I don’t think its the same. I’ll give it a factor of (at most) 50% ($40k from mom equals up to $20k of own ‘skin’ from my POV).
As for additional down-payment, are they spending more than $15K on closing costs? That leaves $25 as real down payment, or 5% on $500k. If the buyer had more money than that (and a willing co-signer with decent credit), when do they need FHA? Is a half-mil not enough to buy a house these days, even on stately Long Island? Should that be the case? (Yes, I’ve read your blog, and suspect that I know your answer to that.)
Maybe the buyer does have some of their own money to put down… unless it is equal to what Mom is putting down, it simply pales in comparison for ‘skin’. On the other hand if it is another $40k to the table (now presuming $65k equity into a $500k purchase), would getting the mortgage be so damn hard? No, it’s an FHA precisely because the down payment is thin.
As for the husband’s job history, the facts are it is continuous, but inconsistent. A lender rightfully gives that pause.
The upshot is that the deal has enough going against it (not to mention Auntie cosigner) to believe that it should not be made in a more rational credit environment.
Hi:
No real estate questions for me–I want to know what happened to Wilhelm’s????? I googled it this morning and your site came up.I am a longtime Village resident and haven’t been here much this summer. Drove through the village last night and was devastated to see the new bakery. Do you know if Wilhelm’s is operating elsewhere, and where there is a comparable bakery????
I don’t know what happened to Wilhelm’s. They closed their doors maybe a few weeks back and the new bakery, Torta Fina, opened up just last week. I assume that Wilhelm’s either went under or that the owners sold out to Torta Fina.
Wilhelm’s is gone for good, I think. If anyone knows of a similar place, let me know. I really miss their bran muffins. Mmm…so moist.
The new bakery is nice enough. It’s a bit more “upscale” than old Wilhelm’s, more like a Manhattan bakery, I think.
Try Black Forest in Lindenhurst. My family has been going there for over 40 years. Very similar to Wilhelm’s – but even better.