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Young Adults Saving For Manhattan Apartment
Added: (Mon Sep 26 2005)
Jonathan Wang is 26 years old. He is currently living with his parents in Brooklyn to save up money to buy his first apartment. He wants to move out, but has decided that it made more sense to save up money that would have otherwise went to rent, to save up for the down payment of an apartment. He hopes to save up enough to qualify for a studio on the Upper East Side where prices are lower than the rest of the desirable parts of Manhattan.
Jonathan represents a growing number of young adults which are postponing independence to save money. Twenty-five percent of adults between the ages of 18-34 now live with their parents, according to the 2000 U.S. census. The number is expected to grow as housing gets more expensive, and wages are not growing to reflect the price increases.
Many young adults are criticized for squandering their wages, instead of saving money. Many young adults say that even if they saved all their wages, they could still never really afford to own in a place in NYC. They complain that it’s too late to buy. Jonathan Wang says, “It’s almost impossible for me to own more than a studio in Manhattan, but if I can buy a studio, in a few years maybe I can trade up to a house or a two bedroom in Brooklyn.”
Of his $55,000 a year salary Jonathan saves for a down payment by making strict lifestyle choices. He eats in most of the time, doesn’t own a car, and rarely travels. He says he has to make sacrifices, but it will be all worth it when he has a place to call his own, and all his peers will be renting or living at home. He plans on borrowing from his 401k to help with the down payment. He estimates that in about two years, he will have enough for a down. He worries that real estate prices will continue to appreciate. “Every month the price goes up, so what I saved that month didn’t help at all.” A studio where Jonathan wants to live goes for about $300,000-$350,000. That would require a minimum down payment of $60,000, along with any requirements the board may have.
Jonathan’s parents are both getting ready for retirement, and can’t really afford to help him with his down payment. They hope that by living with them, they can help him work towards his goal of being a home owner.
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