Trapped In Brooklyn
For most of us 30-somethings that do (or ever have) had the pleasure of living in Brooklyn, we understand firsthand the coolness factor of it all. While over the past 10 years Brooklyn has become ‘hip’ in the eyes of many in the outside world, the truth is those people have no idea how cool it actually is. To share a little secret, it is even cooler than they think. And, as a Manhattan transplant, I would pick Brooklyn any day of the week and twice on Sunday.
That said, the rapidly evolving dynamics that make Brooklyn so cool to those of us who live here are regularly being sought after by the rest of the world. The secret is out and with it has come massive change. It seems as though almost every neighborhood is under some sort of construction. New developments, new stores, new people, all popping up everywhere you look. And with the insurgence of people, the prices for everything have skyrocketed.
The NY Times reported that in the second quarter of 2014, over 65% of all the apartments purchased in northwest Brooklyn were paid for in cash. Today if you look at home prices, it seems you shouldn’t even waste your time if one million plus is not in your budget. You might think that one million dollars would get you the Cosby style row house you have been dreaming of, but in truth you will be probably be stuck in a small (albeit nice) one-two bedroom apartment that is less than 900 square feet.
My wife and I were recently married last November in a small ceremony with family and friends down in Punta Cana. Upon our return from dreamland, we began talking about the next phase of our lives, which included having a family and being able to provide the best possible options for our yet unborn (and, as far as I know, unconceived) children.
After looking at the Brooklyn real estate market, we began to discuss the option (despite all of our friends being very unhappy with the decision) of leaving the great borough in search of space, land, a backyard with a deck and the perfect setup for our future life. For better or worse, we immediately dismissed Long Island; Staten Island and the Bronx weren’t even part of the discussion; Queens also seemed expensive and not really the scene we were looking for; Connecticut has weird alcohol laws; and Philadelphia (which we both love) just seemed like too much of a commute commitment. With that, we narrowed it down to the great Garden State of New Jersey.
After some careful research, we began talking ourselves into the idea that New Jersey wasn’t so bad. We dismissed the notion that when you come out of the tunnels you enter the land of the Lorax; that bridge and tunnel people really aren’t as bad as people say they are; and, we even blessed the idea of spending time each day in one of the most disgusting places in the entire city — the lovely Port Authority Bus Terminal.
So with all that we began our hunt. We didn’t want to stray too far into Jersey and we wanted to be around some semblance of like-minded people, so we settled on the Montclair, New Jersey area. Now admittedly, Montclair, New Jersey is by all definitions actually pretty cool. By that I mean it has got stuff happening, is diverse, has bars, restaurants and entertainment things to do, and many of the people there are in some form or another NYC ex-pats.
However, as we quickly learned, moving to Montclair isn’t as easy as one would imagine. The real estate market there is very liquid and comes with stiff competition for every decent house. The first lesson my wife and I learned is we were not, and are not, the first people to think of this brilliant plan.
Here is how it works: most sellers place their house on the market sometime around the middle of week and advertise for an open house on Sunday. When you see the house on Sunday, you usually have 30 minutes or so to walk around and get a very top-line sense of the house. Once Sunday and the open house have come and gone, all bids for the house are due on Tuesday by 6pm. Now here is the catch: in many cases the houses are priced exorbitantly low. I mean, like $100,000 under what the previous owner may have even paid for it. The strategy is to get as many people as possible to come check out the house, create demand in a blind bidding process and ultimately jack up the price of the house well past the advertised price. The entire process becomes a 48-hour game of studying all the comps, asking your broker a thousand different questions and trying to get into the heads of an unknown amount of people who are probably on the other end doing exactly the same thing.
If you are competitive (like apparently my wife and I are), by the sheer nature of not wanting to lose, you bid high. At a certain point, we may have even forgotten that we were bidding for an actual house. We were just bidding. In our case, we bid on the first house we really liked. According to our broker, we came very close to matching the winning bid, but sadly lost out. Now get this: we lost not because we didn’t bid enough (house was priced at $649,000 / we bid $782,000 — my calculations tell me that we bid $136,000 over the ask) but because the winner bidder agreed to waive the appraisal AND the inspection. Now ask yourself, who in their right mind waives the inspection?
After losing the first house by a close call, my wife and I got serious. We don’t love to lose twice and our unborn, unnamed and ungrateful children were at stake. After watching the Montclair market for a few more weeks, a house popped up in Glen Ridge, NJ. Glen Ridge is by all accounts the stepchild of Montclair, with better schools but zero diversity. It’s OK. We went and checked out the house and in the 25 minutes we spent walking around we kind of liked it. It was big enough, had a semi private backyard and a nice deck that backed up to a golf course.
After a few discussions back and forth, we made the decision to try again and through the study of numerous comps and logical deductions, we made the winning bid. Awesome — we got accepted to buy a house in Glen Ridge, NJ. That was the high point of the entire experience. Immediately, we noticed that the sellers were not interested in any sort of reasonable compromise. I am not saying that is good or not good, I guess to each his own — but it created complications from day one. In any case, we pushed along with trying to secure the loan, set up the lawyer, inspector, tank sweep professionals, chimney people, etc. It was exhausting. Yet, when I tell my friends that part of the story, they always laugh because they think it is hysterical how two 30 somethings with no kids who still love to go out for drinks can be stressed by placing phone calls and setting meetings. Who cares what they think! It was stressful.
After you bid on a house and your offer is accepted, you move to attorney review. In our case, because of the Easter holiday and the seller’s attorney taking a trip to Costa Rica, attorney review actually lasted over a week. We were supposed to come out of it on Monday (4/13/15). However, even though we were not out of attorney review we choose to move forward with the house inspection on Saturday (4/11/15) — a few days ahead of the final attorney review.
What came out of inspection was this: the 90-year-old house was actually in pretty good shape. It had no structural defaults we could see, the current owners kept it pretty nice and it was maintained well over the years. We left the inspection thinking we would have to spend another $10,000-$20,000 over time to fix up a bunch of little things, but nothing crazy.
And then it happened. We said goodbye to our broker and proceeded to walk down the street towards a Greek restaurant we had heard was great for lunch. It was — by all accounts — the most important walk of our not-so-long marriage. As we walked down the block we were instantly both hit by the strange lands of New Jersey. It was quiet, older looking, almost erie. We didn’t see lot of people, there were no buildings, not a pub was in sight, the sidewalks were torn up, and it felt like we had just given our lives to New Jersey.
As we sat at the table in a weird, awkward silence — not a happy “we did it and bought a house vibe” — we both had a epiphany. To break the tension, I asked my wife, “are you happy?” To which she responded, “are you?” “I am happy if you are.” “You don’t look happy.” “Do we really want to live in New Jersey?” “Not really.” “Did we make a huge mistake?”….. silence … “OMG what have we done?”
Getting out of it was actually easy because we were still in attorney review, so although everyone we hired to help secure the house thought we were absolutely crazy (and that includes us), it was just a simple email sent from our lawyer cancelling the contract. But now here is the thing: while we want a life, space, deck, car, and all the things you get outside of NYC or inside NYC if you are wealthy or lucky enough, we couldn’t pull ourselves away from Brooklyn. Are we trapped? Destined to live in the best city in the world like mere peasants (who oddly rent a nice place on the 50th floor overlooking Manhattan)? The irony of it all is enough to make one’s head spin.
How do we get equity for future savings? Is renting apartments our destiny? Then we started telling others about our experience and found we are just two more in a long line of those who had grand illusions of equity and space only to realize they are trapped in Brooklyn. Pulled back by the force of this great city. And so as we head into the spring and summer weather, we will take some time to reflect on our journey while having beers in Brooklyn Bridge park, eating at Smorgasbord, and catching our next music concert at BAM.
Anyone care to join?