Home Buying in New Haven>Question Details

Rosie Simms, Other/Just Looking in Danville, CA

If you know you're only going to be in New HAven 3 years, is it a bad idea to invest in real estate there?

Asked by Rosie Simms, Danville, CA Mon Jul 14, 2008

My daughter is thinking about buying a condo but she knows she'll be moving in three years and my real estate advisors have said she should save her money up towards a down payment for when she moves to a more permanent place, that buying for the short term with closing costs and fees, is not that wise. I was going to help her with a small down ($20,000) but I don't want to advise her to buy anything now if she should wait. We almost bought three years ago, if we had we'd have lost ALOT! (She graduated from Yale)

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Phil’s answer
Depends on what you pay for the property. Higher price equals more fees and closing costs that will goto waste. Additionally if you pay Current Market Value, it may be worth less come next year. So if you do go that route, I would try to buy something at a really good discount.
0 votes Thank Flag Link Fri Dec 26, 2008
Yes and No! You need to do some serious research before signing ANY sales contract. New Haven is in the process of a 5yr tax phase-in, if you didn't know. Find out if the association will allow for you to lease the unit should you not be able to sell for a profit and need more appreciation to exit. Find out whether or not the association will be imposing any assessments. Considering buying only in a complex that is FHA-approved OR buy in the University Towers. I would love to share with you my forecast surrounding the University Towers. Want to know more? yourfamilysrealtor@yahoo.com, Joe Fasone
0 votes Thank Flag Link Mon Sep 1, 2008
Hi Rosie,

I wish I had a crystal ball to tell you with certainty that I could predict where the market will be 3 years from now but I can't. Your advisors are correct in that the money spent on closing will not be recouped in that short time frame. What you want to know is will the market increase in that period to allow her to "move up". What I can do is give you statistics from The Commercial Record who reports on real estate and mortgages in Connecticut and Massachusets.

According to the laest stats on New Haven from The Commercial Record: The number of Sales comparing 2007 to 2008 has dropped 58% (148 versus 61) However, the median price paid comparing 2007 to 2008 rose 1.37% ($182,500-$185,000). Not bad for this market.

One of the reasons that New Haven County has remained relatively stable in price is the draw of Yale both the university and the hospital. With the expansion of Yale Hospital into the former Bayer site, it isn't hard to imagine that more doctors will be recruited and many are fresh out of med school without much in funds or wanting to spend time on home maintenance, so condos have always been a viable option.

So I do believe that condos will still be desirable in the near future. Your focus should be on getting statistics on what condos have sold for and also learning about the managment company-- are there any assesments coming up (new roof, decks etc) and how much is in their kitty.

If you would like I would be happy to send you stats on condos sold as I have been a New Haven County agent since 1995 and focus on Woodbrige, Westville, Orange, Bethany, Milford, West Haven.
0 votes Thank Flag Link Tue Jul 15, 2008
I have to diagree as well. The market is in a great place now for buyers. If your daughter is a first time buyer, she can get into a condo for little to no money (0% to 3%) down using a CHFA program. If you look at the trends over the last 100 years, this dip in the market is right on schedule. After that it will rise again.
If, in the unlikely event that the market is down in 3 years, she would always have the option of renting out the condo for a while to wait for a better market.
If you look at the potential appreciation, plus the principle paydown, plus the $7000-$10000 in tax deductions, less the lost money that would go to rent, it will most likely be gain to her at the end of 3 years.
If she would like to sit down and go over the numbers and look to see what is available that might interest her, I would be happy to help. I can be reached at (860) 736-1002 or danross@c21-accessamerica.com
Web Reference: http://www.danrossre.com
0 votes Thank Flag Link Tue Jul 15, 2008
I completely disagree! In this real estate market -- there has not been a better time to buy! For the first time in 40 years, both prices and interest rates are low. Three years ago, it was a seller's market, and prices were out of sight. This low point in real estate prices is just a cycle. Of course I don't have a crystal ball, but three years from now, we'll be booming again. Go for it -- It's a great time to buy!
0 votes Thank Flag Link Tue Jul 15, 2008
yes, it's a bad idea. dont buy unless you plan to be there a MINIMUM of 5 years, and really I like it to be closer to 7. It's too risky.
0 votes Thank Flag Link Mon Jul 14, 2008
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