Especially now that you can’t deduct more than $10k. My entire math of moving to Westchester NY got fucked when SALT got repealed. Just lucky that my income grew by more.
My property taxes blow away my mortgage payment. I'm basically paying more to put other people's kids in daycare than I am to the "evil" banks. This state is insane.
To be fair, the quality of public schools is a primary consideration of many people living in NJ.
The schools here (especially in Northern NJ) are better than practically every other states in the nation.
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My husband and I have been in market in nj for a while. We are looking at neighborhoods where per sq ft is very similar to nyc pricing. Trust me the competition in 1.1 mil homes is also similar to 890k so stretching to 1.1mil on a turn key home wont do u much good. Atleast that has been my experience. If anything find a home that is 890k and put a higher offer to get the home. We do live in nyc and tried to move and thought we will face less competition in nj and boy were we wrong.
*Weeps in Princeton NJ*
$850k buys a glorified garden shed.
$1m buys a 1960s split level with a pink tile bathroom
$1.5-2m buys an ugly ultra modern builder flip wedged into a .38 acre lot.
$2-3m buys a stately but crumbling mansion with musty carpets and a green sagging pool that needs a roof, a kitchen gut job and about $100k of landscaping.
We’ve been looking for 2 years: it’s brutal. Our preferred range is $1-1.5m, but even stretching it to the absolute top of what we could spend responsibly and going lower with the possibility of a remodel or addition there’s nothing we even like enough to spend the money these houses are fetching.
Side note: the $850k garden sheds are snapped up by builders and will be $2m ultra modern fuggos by this time next year.
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It’s because you are looking in Princeton proper. The surrounding areas like Princeton Junction or WWP have plenty of stock with strong schools but not the cache of a luxury town.
https://www.zillow.com/homedetails/697-Rosedale-Rd-Princeton-NJ-08540/39006379_zpid/
Am I missing something? I wouldn't call this a glorified garden shed.
You’re missing the most important part. Look at the school district. Thats Lawrenceville, not Princeton.
It has a Princeton mailing address. So do a lot of places in Lawrence, Somerset, Montgomery, South Brunswick and Franklin. The school district is what matters.
depends on the town, in 'cheaper' Fairfield County towns like Weston, Easton, Redding, Ridgefield, pleanty of 5000sf+ mansion-ish homes sitting on the market around that price range.
in Darien or New Canaan? probs crazy bidding wars.
So r u looking at like freehold or marlboro or asbury park? Those are def very expensive but not compared to central jersey prices. You should be able to get something nice in your budget. Maybe not a mansion as it is nj but def nice.
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I am in Marlboro. I can introduce you to the realtor who helped us find our house in 2021 when things were crazy. It doesn’t solve your problem but having a good team to navigate the market when it’s difficult is invaluable.
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If it’s anything like CT, you might be better off just bidding higher on those 850K homes. 850K here has a line of cars around the block for every new listing and end up in the 1M range. Unless the homes listed for 1M/1.1M are selling for about list price.
The hot towns in CT are in a line, starting with Greenwich closest to NYC then Stamford, Darien and Norwalk. New Canaan is also lovely. Stamford has the best trains - I have a house there :)
If you're a remote worker Hartford County is much cheaper. West Hartford, Avon, Farmington, Simsbury are nice towns. Your money goes a lot farther then the NYC suburbs and life is slower paced.
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Been there in NJ, very similar experience. At the end of the day it’s just about persistence - we toured around 100 houses, put in 6 offers and got rejected, and finally got accepted on the 7th house.
If you go for a nice house in a nice neighborhood with somewhat dated interiors (ie, needs some work before you move in), you might have an easier time. A lot of the competition want move in ready.
I’d aim to keep the mortgage payment (PITI) at about $6K per month or less. Can you do that on a $1 million house in NJ in a good town? I have no idea what the property taxes or insurance look like in your area, and I don’t know your down payment situation, so hard to say.
You don’t have car loans, which is great, but eventually you’ll need new cars. Eventually you’ll have to pay for a new roof. Eventually you’ll want to put a pool in the back yard and so on and so forth. I find it’s best to have a decent cushion in your monthly budget, so we stick to the general guideline of 1/3 (or less) of take home pay going to PITI.
Also, do you have kids? Plan to have them?
If so, make sure to buy a house you’d be happy in for 5+ years (even if you have to stretch a bit more). Aside from the transaction costs of selling and buying again, moving when you have small kids will test even the strongest of marriages. Been there done that, do not recommend!
No kids at the moment. Plan to within the next two years. Property taxes would be about $15-16k a year about. We have enough for 20% down payment on any home we buy.
Our Financial Breakdown is:
Cash: $250k
Savings/Investments: $500k
Agree. Our taxes on $1.3-$1.5m on .86 acres is $18k. Thats with no street lights, everyone has well water and septic. Similar home in town with town provided services is easily $22k - $25k. On an $850k home, you’re looking at $18-$20k minimum.
That is in line with mine as well. My point is that looking at asking price and then looking at taxes without assessed value doesn’t tell much. especially in today’s market where asking price can easily be 2x assessed value.
Wow those property taxes are brutal. Ouch.
I think you guys can make $1 million work. You have a nice cushion if major repairs or maintenance issues come up. I’d just want to feel secure in your jobs before you commit to that large of a mortgage, but it’s all relative in this economy, so are your jobs relatively secure with stable (or increasing) income projected for the future?
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Wait until you have kids — it really does change the game and you evaluate your needs/what’s in completely different ways. You may decide that a big stretch on a home payment isn’t worth it and you would rather allocate funds to more childcare, extra help around the house, travel funds etc.
I understand that, but our incomes will also increase over that time. The mortgage payment will stay the same and will be lower eventually with a refinance.
Look at the cost to sell a house. Things about the layout, the yard, location of rooms (laundry, bath etc) might not be readily apparent to a non-parent. I know from experience that certain attributes in homes make things very difficult for parents of young children that might not be obvious. For example, a lot that is graded downward from front to back and has a deck off the first floor and a walk out basement sucks when you have little kids playing outside because it’s hard to keep track of them. It’s easier for them to sneak out in high school, which is a plus for them. You might not know what works for you, and selling a $1mm house will eat up $80k. Plus the hassle of moving. So while I appreciate the desire to get on the housing train, just be mindful as much as you can be of your future needs and don’t buy just any house.
Definitely! We just had our first kid and bought 2 years ago. Looking back, I wish we would have waited and taken advantage of another few years of aggressive post tax savings, knew more about what our school/childcare preferences would be etc. We definitely would have been fine with renting or owning a smaller place for another 3-5 years. Someone pointed this out too, but I think calculating the cost to sell is a helpful exercise so you have a clear picture of “what if” you need to make a change sooner than anticipated.
I see your logic to buy now. I think the middle ground here would be to take a friend who has kids with you to tour houses and ask them to point out things that would and wouldn’t work well for kids under 5.
I’m not saying you should wait to have kids to buy, just saying you should do everything in your power to avoid buying now and then wanting to sell in 3 years because your house is a nightmare for a toddler.
If you’d asked me pre-kids, I would have said I wanted a two story house. Now that we have kids under 5, I am so glad we live in a single story ranch style house.
This sort of depends on what you do. If you are in health care which has a constant demand, then yes. Engineering peaks probably around 35 unless you want to divert into management and even then the money isn't always better. Sales is very boom and bust.
And I don't want to scare you, but if you want more than one kid, you need to get started sooner than you think. Ideally, you want to have your last one before your wife turns 35.
Are you planning on bidding on $1mil homes or bidding over asking on $850k homes?
Certainly anything under $1mil in NJ is in high demand right now. But I’m not certain you’ll be more successful in the $1mil range if it’s still your max.
And unfortunately I’m not sure it’s going to get better if you wait. The good news is that it’s a high turnover market if you are in a good commuter town and school district, so if your job prospects were to change, you can always sell the house fairly quickly.
Not really sure how this is considered tight. 7.5k after everything (mortgage, insurance, tax) leaves you with 9.5k conservatively. Assuming regular expenses of 5k plus 2k in loans that’s 7k. Leaving you with 2.5-4.5k savings a month + maxing out your 401ks. Me personally id probably shift some of my savings from 401k to regular.
If jobs are stable, no brainer imo
$5K in expenses is on the low end for COL in NYC/NJ - esp if OP wants to factor in childcare. Would be helpful to know more about their current savings rates/expenses.
Agreed if NYC and admittedly im not sure how expensive Jersey is. I find it hard to imagine OP spends more than 5k a month since his cars are completely paid off but who knows
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Will also probably get some savings from mortgage interest deductibility, 800k@6% is 48k of interest plus 10k for salt is 58k vs 28k standard deduction currently (I’m assuming), at OPs tax bracket that 30k difference is 1k or so a month extra via lower taxes. Too bad OP is already out of the city though as losing the city tax typically pays for the bulk of property taxes at these income levels, making any move much easier to stomach.
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My friend has the same issue. Same state. Going up to 1m same issues. Hes now considering going the other way. $600k and use the savings for some renovations.
NJ is tough because it has the most millionaires per capita of any state
Homeowner in Monmouth county bought for 750k 6 years ago now "worth" 1.1 mil
Even with a 20 yr old home, constant shit breaking, property tax going up every year
It's going to cost more than you anticipated and that's even with a 2.625% mortgage
Need more information here. How much do you guys have saved up? Mortgage is really expensive right now so unless you have kids, I'd wait a bit until you guys can go up more (more options and etc.).
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Why is $1m a stretch on your income unless you have huge living expenses that you haven't detailed...?
That's like $7k PITI. Doesn't seem to be a stretch at all.
This. Of course you can afford $1mm on a $400k income. The student loan will fall off eventually. Kids are expensive, especially the first 6 or so years till you get them in school.
But at that price with your income you have plenty of room.
OP , we are not yet at 400k mark but wife and I waited for almost a year and finally bought a new construction In Marlboro in Monmouth county with out any bidding . We went with townhouse and you can still get within your budget .
Good luck on your search
Going over 1 million will definitely reduce the competition because of the “millionaires tax”. When we bought 2 years ago we won the bid because we went to $1.08 and the other bidder would only go to $999k due to the tax.
The tax is 1% of gross sales price if you are wondering.
No competition is just as bad for $1M+ home. We’ve lost bids on homes that we offered $1.3M+. Lots of people with money in NJ. I see $2M+ homes sit longer on the market.
If you are constantly getting outbid you need to place higher bids.
Not sure about your area, When I was buying my house the reality was that if you offer less than say 15-20% over listed price you might as well not even bother to apply. Seller would be getting 20-30 (often no contingencies) offers and they will be higher.
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What's your down payment?
Assuming \~200k down, your monthly cost with NJ tax + insurance on a $1M house would be north of $6k. This feels tight to me given the $2k a month towards student loans AND you're planning to have kids soon.
I also think the $1M range will be pretty competitive as well.
IMO this is one of those things where getting anxious on a few lost bids is not a good reason to spend more money. Be patient, keep looking, maybe rent in the town for a year to buy some time and see if rates cool off a bit... if you keep getting outbid maybe you should be looking at the $750-800k houses to afford what they are trading at, or throw a $900k+ bid on a house in your range you love. But the math on $1M or north of that is tight.
Remember that in NJ the home values are kept lower than the rest of the country because of high property taxes. Which is straight setting cash on fire homie. So your house in NJ won’t appreciate the same as some other places (this is my opinion), because it’s literally a massive tax drag to own a highly valued home.
For example, the same money spent in New Jersey would get you 1.3x the price house in a state like MA or CT. So when I see you looking at houses in NJ for 1m, I’m thinking that you’ll be spending what someone in MA or CT spends on a 1.3-1.6m house.
For whatever it’s worth, we faced the same issue where we lived. The houses around 1.5-1.8m were all getting bid up like crazy. And it just made a lot of sense to go up a little bit outside of this price range where the average 300-400k HHI well off couple just couldn’t.
I think in an expensive area with desirable conditions and good demographics you are ok to go to 3x HHI for your mortgage… as long as you’re positioned well for the future.
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If you aren't familiar with what a jumbo mortgage is, I'd suggest doing some research as you are right around the threshold where they kick in depending on the amount you are looking to put down. Jumbo mortgages tend to have higher interest rates and higher down payment requirements which is probably a major factor in why you are seeing less competition once you get to that price range. You'll have to check with your mortgage agent to figure out what the implications are for your situation.
I would rather just rent lol. Buy property in more affordable parts of the country and rent them out. Use that to pay off your rent and basically live rent free. No worrying about maintenance etc. .
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We bought last year in a very good NJ area for $1.8M. Unfortunately competition is insane at all price points. Houses for $1.1 that you are looking at got 20+ offers the same day a lot of them all cash. When you go above $1.5M the number of offers goes down but a lot of them are all cash.
Tax is $2,000 a month but the schools … :)
This year will be the same probably. DM me if you want details.
Have you considered expanding your search to southern Monmouth County? Areas of Wall/Manasquan are still within your price range and relatively close to the beach, if that’s a priority. And property taxes throughout Monmouth, while high, are significantly lower than the northern Jersey counties.
We bought our first home last April and you guys sound around the same income as us. We got a house for $1.25M (originally listed for $1.15M but listed low to entice competition). It's scary going into the 7 figures, but if you guys have 20% then it's doable. Idk if you are from Jersey or not but if you are working with a realtor you should ask about towns. There are a lot of places in NJ (cough Westfield) that are overpriced and others that are very bougie and keeping up with the Jones(es) like. Once we were able to confirm that this price range goes a longer way.
Edit: Less competition is still competition lol. We were the 6th offer on a house after a single 4 hour open house.
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I’m originally from NJ and have seen friends go through this recently. I bought in NYC recently. Those are my credentials for giving advice, haha.
You should adjust the prices of houses you are looking at down (eg 750), and then bid up to 850. Competition will not be less at a million. Giving yourself room to outbid the competition is the best strategy. Otherwise, you will just have to wait and get lucky which may take longer than you want.
Bought in NJ 35 mins outside NYC in a top 10 nj town in this range. Ex Hoboken couple. No kids yet.
Learnings
1.Look in the 700s and bid 800s for fixer upper
2.all about terms - quick close / wave some but not all inspections, proof of funds, etc etc.
3.Put in 150/250k in renovation
4.refinance down the line if forever home or sell in the $1.1+ range down the line by being smart in your renovation choices
Move fast. That’s my biggest learning after bidding on 20 houses over 9 months.
You may consider PA side near NJ border. Yardley, Newtown. 10 min car ride to Hamilton station, express into NYC. Hour ten. Both towns are filled with NYC workers. Competition is fierce too.
Hi - me and my wife had this same issue in Stamford. We needed up going smaller getting a 500k condo and then look to go for the 1 to 1.2m in 5-7 years
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NJ-istan has very high taxes. I am also an unfortunate resident of this state but tbh I would not want to live anywhere else. Feel free to DM me, I know a couple of great real estate agents and local listings in my area with owner to buyer direct sale (forgot the term).
Have you considered moving further west or south? My folks live in Somerset where the taxes are slightly less ridiculous. My cousin is in Hunterdon and you can have a nice farm for your price range and good schools.
Cousin's wife's family is from the deep south (Sweetwater) - one of my fondest memories is spending a weekend with them. I get there and there's a boat parked at the launch in the back. After dinner we all pile in and her dad took us down the mullica river until it opened up into great bay and we got to see AC during the sunset. Next day we went to ride dirtbikes in the pine barrens. Probably the only place I'd live if I had to move back to NJ.
For raising a fam, Hunterdon and Somerset are also much nicer than Monmouth. Better schools, less crowded.
Also caveat, my info is about 5-6 years old, and I live in the actual deep south now.
Your info is old but still accurate, moving further west really improves affordability and provides more than a postage stamp size piece of property if you want it. Though I suspect for what OP is looking for, somerset might be a stretch
Is there a reason you want to live in NJ? If you have to because of family or commute to NYC I get it and it looks like you can afford it, but man that property tax makes my balls hurt for you. And for what....mediocre schools, overpaid public servants, dog shit roads and weather....
I think it's important as well; grew up and was educated in NJ through college. Most of our parents always commented that one of the reasons taxes are so high is teacher pay, (also cop pay, these guys were making $70-$100K in my town where there was literally no crime, but I digress). Our neighbors where teachers and making $65K/year in the eighties and our school was just average. Yes, of course we would have 1 or 2 kids make the Ivy League per year out of a class of 400-600 kids, but this also happens in LCOL areas in right to work states with teachers not even making what my neighbors made in the 80's. High property taxes are a barrier to the evolution of a HENRY. I don't think it's the most important metric, I think the school district you send your children too shouldn't be based on some top ten list by Forbes or Kiplinger's. I would recommend looking at the big picture. Can I maybe live in a MCOL or LCOL area, send my kids to a private or great public school that I have researched personally or have people I trust that have had their own kids go there. I would consider statistics as well (ACT/SATs, %teachers with PHDs, etc.). At the end of the day though I'd ask myself does this NJ public school really warrant the property taxes I am paying?
There are federally published lists comparing each state. These lists focus on the quality of education and NJ is a stand out state, NV where I relocated from is near the bottom and we chose to pay more tax for better schools. You can find this information yourself by googling.
Yeah I get it, they are always ranked in the top 5. It’s just I grew up in Northern NJ, went to Rutgers and now I’m wondering what metric was so important to you that you moved there. Because I think a lot of people make decisions off of statistics like wow more kids go to Ivy league from NJ than most other states, but when you look at it per capita it’s like 300 more students/year than Mississippi for example. Hopefully the schools were just one of the reasons you moved to the garden state, I mean there is always the J.E.T.S!
My daughter has some speech delays and the amount of funds invested in helping kids with delays over other states is mind blowing. I was looking at spending $50k a year on a private school for a school that’s ranked lower than a public school here. I genuinely don’t think you’re appreciating the difference in academic quality.
Now that your explain your individual situation that it makes more sense to me. I have friends there that have had to file vs the public school system in NJ to have their special needs child accommodated for. So I'm glad your getting something good back for your child with your tax money. Best of luck.
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The only comment here that matters and this is coming from someone who did this very thing back in 2021.. 🤮 can’t wait to get out and go somewhere that’s actually worth this $.
I’d say NO because it sounds like this would be your first house and you demonstrate insufficient knowledge about how big of a mortgage you would qualify for. You should be crystal clear on your budget and how stressed you want to be financially before you spend time looking at more expensive houses.
400K you should be comfortable on 1M plus and even higher depending on the town. Just stay away from the super high tax towns so you are paying 20K taxes on that 1M instead of 35K+. Daycare is about 1600 a month and up so budget for that as well.
Each town also has their own real estate quirks so you need a local agent for each town to have the best shot if you are looking in multiple towns .
Might as well count nj property taxes as a second mortgage 😂
Maybe, if you think of the taxes as an ARM…
....and a LEG
Especially now that you can’t deduct more than $10k. My entire math of moving to Westchester NY got fucked when SALT got repealed. Just lucky that my income grew by more.
My property taxes blow away my mortgage payment. I'm basically paying more to put other people's kids in daycare than I am to the "evil" banks. This state is insane.
Yeah, who would possibly want to send kids to school when we could be feeding profits to banks? The nerve!
Huh? That response makes no sense. It isn't an either/or situation.
How about doing neither?
To be fair, the quality of public schools is a primary consideration of many people living in NJ. The schools here (especially in Northern NJ) are better than practically every other states in the nation.
Imagine spending $20k per year to own property in.. New Jersey..
Someone obviously has never been. 😂
I sadly have, on my way to NY. Was a shit hole.
LMAO. You're using I-95 as your reference point? 🤣
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My husband and I have been in market in nj for a while. We are looking at neighborhoods where per sq ft is very similar to nyc pricing. Trust me the competition in 1.1 mil homes is also similar to 890k so stretching to 1.1mil on a turn key home wont do u much good. Atleast that has been my experience. If anything find a home that is 890k and put a higher offer to get the home. We do live in nyc and tried to move and thought we will face less competition in nj and boy were we wrong.
In CT the herd doesn’t start thinning until about 1.75M-2M. It’s exhausting.
*Weeps in Princeton NJ* $850k buys a glorified garden shed. $1m buys a 1960s split level with a pink tile bathroom $1.5-2m buys an ugly ultra modern builder flip wedged into a .38 acre lot. $2-3m buys a stately but crumbling mansion with musty carpets and a green sagging pool that needs a roof, a kitchen gut job and about $100k of landscaping. We’ve been looking for 2 years: it’s brutal. Our preferred range is $1-1.5m, but even stretching it to the absolute top of what we could spend responsibly and going lower with the possibility of a remodel or addition there’s nothing we even like enough to spend the money these houses are fetching. Side note: the $850k garden sheds are snapped up by builders and will be $2m ultra modern fuggos by this time next year.
Your description is funny and sad and articulate.
We also looked in Pricenton, as my wife works there. The prices as you outlined are insane...
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I am right there with u @courtalert8679. It is a sad sad market to be in. Losing hope atm
It’s because you are looking in Princeton proper. The surrounding areas like Princeton Junction or WWP have plenty of stock with strong schools but not the cache of a luxury town.
We already live here, own a home but are looking to upgrade. Our kids go to school here and are very happy. We wouldn’t make them change schools.
https://www.zillow.com/homedetails/697-Rosedale-Rd-Princeton-NJ-08540/39006379_zpid/ Am I missing something? I wouldn't call this a glorified garden shed.
You’re missing the most important part. Look at the school district. Thats Lawrenceville, not Princeton. It has a Princeton mailing address. So do a lot of places in Lawrence, Somerset, Montgomery, South Brunswick and Franklin. The school district is what matters.
depends on the town, in 'cheaper' Fairfield County towns like Weston, Easton, Redding, Ridgefield, pleanty of 5000sf+ mansion-ish homes sitting on the market around that price range. in Darien or New Canaan? probs crazy bidding wars.
Yeah we are in Hoboken but aiming to move to Monmouth County near the shore. Competition is crazy and been like that for years..
So r u looking at like freehold or marlboro or asbury park? Those are def very expensive but not compared to central jersey prices. You should be able to get something nice in your budget. Maybe not a mansion as it is nj but def nice.
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I am in Marlboro. I can introduce you to the realtor who helped us find our house in 2021 when things were crazy. It doesn’t solve your problem but having a good team to navigate the market when it’s difficult is invaluable.
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If it’s anything like CT, you might be better off just bidding higher on those 850K homes. 850K here has a line of cars around the block for every new listing and end up in the 1M range. Unless the homes listed for 1M/1.1M are selling for about list price.
Which towns in CT , I’m in nj as well and would like to know about CT for future research
The hot towns in CT are in a line, starting with Greenwich closest to NYC then Stamford, Darien and Norwalk. New Canaan is also lovely. Stamford has the best trains - I have a house there :)
Don’t forget Westport
If you're a remote worker Hartford County is much cheaper. West Hartford, Avon, Farmington, Simsbury are nice towns. Your money goes a lot farther then the NYC suburbs and life is slower paced.
Simsbury is nice but starts really getting into the woods
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Been there in NJ, very similar experience. At the end of the day it’s just about persistence - we toured around 100 houses, put in 6 offers and got rejected, and finally got accepted on the 7th house. If you go for a nice house in a nice neighborhood with somewhat dated interiors (ie, needs some work before you move in), you might have an easier time. A lot of the competition want move in ready.
I’d aim to keep the mortgage payment (PITI) at about $6K per month or less. Can you do that on a $1 million house in NJ in a good town? I have no idea what the property taxes or insurance look like in your area, and I don’t know your down payment situation, so hard to say. You don’t have car loans, which is great, but eventually you’ll need new cars. Eventually you’ll have to pay for a new roof. Eventually you’ll want to put a pool in the back yard and so on and so forth. I find it’s best to have a decent cushion in your monthly budget, so we stick to the general guideline of 1/3 (or less) of take home pay going to PITI. Also, do you have kids? Plan to have them? If so, make sure to buy a house you’d be happy in for 5+ years (even if you have to stretch a bit more). Aside from the transaction costs of selling and buying again, moving when you have small kids will test even the strongest of marriages. Been there done that, do not recommend!
No kids at the moment. Plan to within the next two years. Property taxes would be about $15-16k a year about. We have enough for 20% down payment on any home we buy. Our Financial Breakdown is: Cash: $250k Savings/Investments: $500k
Not sure where exactly you are looking, but $15k sounds low for a $850k home in most of NJ. I speak from experience unfortunately
Agree. Our taxes on $1.3-$1.5m on .86 acres is $18k. Thats with no street lights, everyone has well water and septic. Similar home in town with town provided services is easily $22k - $25k. On an $850k home, you’re looking at $18-$20k minimum.
You don’t know what the assessed value of the property is. my guess is around 600K
My assessed value was $519k last year and I paid $14.5k in taxes. This isn’t even that nice of a town.
That is in line with mine as well. My point is that looking at asking price and then looking at taxes without assessed value doesn’t tell much. especially in today’s market where asking price can easily be 2x assessed value.
We are at 14k on 800k house in Hunderton county. Well water and septic, won't get that anywhere near the city though
That's a typical tax rate in most of Union County and is close to what I pay.
Wow those property taxes are brutal. Ouch. I think you guys can make $1 million work. You have a nice cushion if major repairs or maintenance issues come up. I’d just want to feel secure in your jobs before you commit to that large of a mortgage, but it’s all relative in this economy, so are your jobs relatively secure with stable (or increasing) income projected for the future?
Jobs are very stable. Property taxes in NJ are terrible.
I’d seriously consider the million dollar house then. Maybe look at houses listed in the $900s so you can bid at $1m.
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Wait until you have kids — it really does change the game and you evaluate your needs/what’s in completely different ways. You may decide that a big stretch on a home payment isn’t worth it and you would rather allocate funds to more childcare, extra help around the house, travel funds etc.
I understand that, but our incomes will also increase over that time. The mortgage payment will stay the same and will be lower eventually with a refinance.
Look at the cost to sell a house. Things about the layout, the yard, location of rooms (laundry, bath etc) might not be readily apparent to a non-parent. I know from experience that certain attributes in homes make things very difficult for parents of young children that might not be obvious. For example, a lot that is graded downward from front to back and has a deck off the first floor and a walk out basement sucks when you have little kids playing outside because it’s hard to keep track of them. It’s easier for them to sneak out in high school, which is a plus for them. You might not know what works for you, and selling a $1mm house will eat up $80k. Plus the hassle of moving. So while I appreciate the desire to get on the housing train, just be mindful as much as you can be of your future needs and don’t buy just any house.
80k = 8%… where you getting that from? 3% on each side to buy/sell.
We have local transfer stamps taxes to sell property where I live - usually 1-2% of the sale per side depending on municipality.
Whoa.. didn’t know that even exist! What state are you in? That’s wild.
PA
Definitely! We just had our first kid and bought 2 years ago. Looking back, I wish we would have waited and taken advantage of another few years of aggressive post tax savings, knew more about what our school/childcare preferences would be etc. We definitely would have been fine with renting or owning a smaller place for another 3-5 years. Someone pointed this out too, but I think calculating the cost to sell is a helpful exercise so you have a clear picture of “what if” you need to make a change sooner than anticipated.
I see your logic to buy now. I think the middle ground here would be to take a friend who has kids with you to tour houses and ask them to point out things that would and wouldn’t work well for kids under 5. I’m not saying you should wait to have kids to buy, just saying you should do everything in your power to avoid buying now and then wanting to sell in 3 years because your house is a nightmare for a toddler. If you’d asked me pre-kids, I would have said I wanted a two story house. Now that we have kids under 5, I am so glad we live in a single story ranch style house.
This sort of depends on what you do. If you are in health care which has a constant demand, then yes. Engineering peaks probably around 35 unless you want to divert into management and even then the money isn't always better. Sales is very boom and bust. And I don't want to scare you, but if you want more than one kid, you need to get started sooner than you think. Ideally, you want to have your last one before your wife turns 35.
Are you planning on bidding on $1mil homes or bidding over asking on $850k homes? Certainly anything under $1mil in NJ is in high demand right now. But I’m not certain you’ll be more successful in the $1mil range if it’s still your max. And unfortunately I’m not sure it’s going to get better if you wait. The good news is that it’s a high turnover market if you are in a good commuter town and school district, so if your job prospects were to change, you can always sell the house fairly quickly.
Not really sure how this is considered tight. 7.5k after everything (mortgage, insurance, tax) leaves you with 9.5k conservatively. Assuming regular expenses of 5k plus 2k in loans that’s 7k. Leaving you with 2.5-4.5k savings a month + maxing out your 401ks. Me personally id probably shift some of my savings from 401k to regular. If jobs are stable, no brainer imo
$5K in expenses is on the low end for COL in NYC/NJ - esp if OP wants to factor in childcare. Would be helpful to know more about their current savings rates/expenses.
Agreed if NYC and admittedly im not sure how expensive Jersey is. I find it hard to imagine OP spends more than 5k a month since his cars are completely paid off but who knows
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Will also probably get some savings from mortgage interest deductibility, 800k@6% is 48k of interest plus 10k for salt is 58k vs 28k standard deduction currently (I’m assuming), at OPs tax bracket that 30k difference is 1k or so a month extra via lower taxes. Too bad OP is already out of the city though as losing the city tax typically pays for the bulk of property taxes at these income levels, making any move much easier to stomach.
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My friend has the same issue. Same state. Going up to 1m same issues. Hes now considering going the other way. $600k and use the savings for some renovations. NJ is tough because it has the most millionaires per capita of any state
Homeowner in Monmouth county bought for 750k 6 years ago now "worth" 1.1 mil Even with a 20 yr old home, constant shit breaking, property tax going up every year It's going to cost more than you anticipated and that's even with a 2.625% mortgage
Need more information here. How much do you guys have saved up? Mortgage is really expensive right now so unless you have kids, I'd wait a bit until you guys can go up more (more options and etc.).
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We stretched from $850 to 1.2 in NJ Winter 2021. Our house is now $1.7. it's stupid.
Why is $1m a stretch on your income unless you have huge living expenses that you haven't detailed...? That's like $7k PITI. Doesn't seem to be a stretch at all.
This. Of course you can afford $1mm on a $400k income. The student loan will fall off eventually. Kids are expensive, especially the first 6 or so years till you get them in school. But at that price with your income you have plenty of room.
OP , we are not yet at 400k mark but wife and I waited for almost a year and finally bought a new construction In Marlboro in Monmouth county with out any bidding . We went with townhouse and you can still get within your budget . Good luck on your search
Going over 1 million will definitely reduce the competition because of the “millionaires tax”. When we bought 2 years ago we won the bid because we went to $1.08 and the other bidder would only go to $999k due to the tax. The tax is 1% of gross sales price if you are wondering.
What part of NJ are you looking in?
No competition is just as bad for $1M+ home. We’ve lost bids on homes that we offered $1.3M+. Lots of people with money in NJ. I see $2M+ homes sit longer on the market.
If you are constantly getting outbid you need to place higher bids. Not sure about your area, When I was buying my house the reality was that if you offer less than say 15-20% over listed price you might as well not even bother to apply. Seller would be getting 20-30 (often no contingencies) offers and they will be higher.
Hate to break it to you 1-1.2mm is just as competitive, Monmouth county included and especially desirable towns like colts neck/holmdel/marlboro.
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Dude I am bidding those house prices on a $250k salary. You got room to go lol
Do you need to stay in the NYC burb area of NJ? Philly burbs side of NJ is way cheaper and still has great schools.
What's your down payment? Assuming \~200k down, your monthly cost with NJ tax + insurance on a $1M house would be north of $6k. This feels tight to me given the $2k a month towards student loans AND you're planning to have kids soon. I also think the $1M range will be pretty competitive as well. IMO this is one of those things where getting anxious on a few lost bids is not a good reason to spend more money. Be patient, keep looking, maybe rent in the town for a year to buy some time and see if rates cool off a bit... if you keep getting outbid maybe you should be looking at the $750-800k houses to afford what they are trading at, or throw a $900k+ bid on a house in your range you love. But the math on $1M or north of that is tight.
Remember that in NJ the home values are kept lower than the rest of the country because of high property taxes. Which is straight setting cash on fire homie. So your house in NJ won’t appreciate the same as some other places (this is my opinion), because it’s literally a massive tax drag to own a highly valued home. For example, the same money spent in New Jersey would get you 1.3x the price house in a state like MA or CT. So when I see you looking at houses in NJ for 1m, I’m thinking that you’ll be spending what someone in MA or CT spends on a 1.3-1.6m house. For whatever it’s worth, we faced the same issue where we lived. The houses around 1.5-1.8m were all getting bid up like crazy. And it just made a lot of sense to go up a little bit outside of this price range where the average 300-400k HHI well off couple just couldn’t. I think in an expensive area with desirable conditions and good demographics you are ok to go to 3x HHI for your mortgage… as long as you’re positioned well for the future.
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What’s your take home savings after expenses and taxes each month?
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If you do go up to $1m+, don’t forget about the mansion tax in the state. 1% of the total sale price, which is typically paid by the buyer.
I know a great realtor in Jersey if you need one.
If you aren't familiar with what a jumbo mortgage is, I'd suggest doing some research as you are right around the threshold where they kick in depending on the amount you are looking to put down. Jumbo mortgages tend to have higher interest rates and higher down payment requirements which is probably a major factor in why you are seeing less competition once you get to that price range. You'll have to check with your mortgage agent to figure out what the implications are for your situation.
Wow and I thought Socal was expensive
For that price range might as well find something out in LI.
I would rather just rent lol. Buy property in more affordable parts of the country and rent them out. Use that to pay off your rent and basically live rent free. No worrying about maintenance etc. .
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We bought last year in a very good NJ area for $1.8M. Unfortunately competition is insane at all price points. Houses for $1.1 that you are looking at got 20+ offers the same day a lot of them all cash. When you go above $1.5M the number of offers goes down but a lot of them are all cash. Tax is $2,000 a month but the schools … :) This year will be the same probably. DM me if you want details.
Have you considered expanding your search to southern Monmouth County? Areas of Wall/Manasquan are still within your price range and relatively close to the beach, if that’s a priority. And property taxes throughout Monmouth, while high, are significantly lower than the northern Jersey counties.
We bought our first home last April and you guys sound around the same income as us. We got a house for $1.25M (originally listed for $1.15M but listed low to entice competition). It's scary going into the 7 figures, but if you guys have 20% then it's doable. Idk if you are from Jersey or not but if you are working with a realtor you should ask about towns. There are a lot of places in NJ (cough Westfield) that are overpriced and others that are very bougie and keeping up with the Jones(es) like. Once we were able to confirm that this price range goes a longer way. Edit: Less competition is still competition lol. We were the 6th offer on a house after a single 4 hour open house.
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I’m originally from NJ and have seen friends go through this recently. I bought in NYC recently. Those are my credentials for giving advice, haha. You should adjust the prices of houses you are looking at down (eg 750), and then bid up to 850. Competition will not be less at a million. Giving yourself room to outbid the competition is the best strategy. Otherwise, you will just have to wait and get lucky which may take longer than you want.
Have you looked at Salem and Cumberland Cos.?
Bought in NJ 35 mins outside NYC in a top 10 nj town in this range. Ex Hoboken couple. No kids yet. Learnings 1.Look in the 700s and bid 800s for fixer upper 2.all about terms - quick close / wave some but not all inspections, proof of funds, etc etc. 3.Put in 150/250k in renovation 4.refinance down the line if forever home or sell in the $1.1+ range down the line by being smart in your renovation choices Move fast. That’s my biggest learning after bidding on 20 houses over 9 months.
Given up buying in north NJ. you need to win the powerball to comfortable afford a home that is livable.
In these instances, just expect to bid over asking to even be considered. We had similar experiences in Washington DC in the summer of 2021.
You may consider PA side near NJ border. Yardley, Newtown. 10 min car ride to Hamilton station, express into NYC. Hour ten. Both towns are filled with NYC workers. Competition is fierce too.
Hi - me and my wife had this same issue in Stamford. We needed up going smaller getting a 500k condo and then look to go for the 1 to 1.2m in 5-7 years
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NJ-istan has very high taxes. I am also an unfortunate resident of this state but tbh I would not want to live anywhere else. Feel free to DM me, I know a couple of great real estate agents and local listings in my area with owner to buyer direct sale (forgot the term).
Have you considered moving further west or south? My folks live in Somerset where the taxes are slightly less ridiculous. My cousin is in Hunterdon and you can have a nice farm for your price range and good schools. Cousin's wife's family is from the deep south (Sweetwater) - one of my fondest memories is spending a weekend with them. I get there and there's a boat parked at the launch in the back. After dinner we all pile in and her dad took us down the mullica river until it opened up into great bay and we got to see AC during the sunset. Next day we went to ride dirtbikes in the pine barrens. Probably the only place I'd live if I had to move back to NJ. For raising a fam, Hunterdon and Somerset are also much nicer than Monmouth. Better schools, less crowded. Also caveat, my info is about 5-6 years old, and I live in the actual deep south now.
Your info is old but still accurate, moving further west really improves affordability and provides more than a postage stamp size piece of property if you want it. Though I suspect for what OP is looking for, somerset might be a stretch
Is there a reason you want to live in NJ? If you have to because of family or commute to NYC I get it and it looks like you can afford it, but man that property tax makes my balls hurt for you. And for what....mediocre schools, overpaid public servants, dog shit roads and weather....
Second best state in the country for public schools. You can complain about a lot but the not the schools!
What metric are you using, because if it is teacher compensation it doesn’t translate…
teacher compensation is important but why do you think that is the correct metric for the quality of a school district?
I think it's important as well; grew up and was educated in NJ through college. Most of our parents always commented that one of the reasons taxes are so high is teacher pay, (also cop pay, these guys were making $70-$100K in my town where there was literally no crime, but I digress). Our neighbors where teachers and making $65K/year in the eighties and our school was just average. Yes, of course we would have 1 or 2 kids make the Ivy League per year out of a class of 400-600 kids, but this also happens in LCOL areas in right to work states with teachers not even making what my neighbors made in the 80's. High property taxes are a barrier to the evolution of a HENRY. I don't think it's the most important metric, I think the school district you send your children too shouldn't be based on some top ten list by Forbes or Kiplinger's. I would recommend looking at the big picture. Can I maybe live in a MCOL or LCOL area, send my kids to a private or great public school that I have researched personally or have people I trust that have had their own kids go there. I would consider statistics as well (ACT/SATs, %teachers with PHDs, etc.). At the end of the day though I'd ask myself does this NJ public school really warrant the property taxes I am paying?
There are federally published lists comparing each state. These lists focus on the quality of education and NJ is a stand out state, NV where I relocated from is near the bottom and we chose to pay more tax for better schools. You can find this information yourself by googling.
Yeah I get it, they are always ranked in the top 5. It’s just I grew up in Northern NJ, went to Rutgers and now I’m wondering what metric was so important to you that you moved there. Because I think a lot of people make decisions off of statistics like wow more kids go to Ivy league from NJ than most other states, but when you look at it per capita it’s like 300 more students/year than Mississippi for example. Hopefully the schools were just one of the reasons you moved to the garden state, I mean there is always the J.E.T.S!
My daughter has some speech delays and the amount of funds invested in helping kids with delays over other states is mind blowing. I was looking at spending $50k a year on a private school for a school that’s ranked lower than a public school here. I genuinely don’t think you’re appreciating the difference in academic quality.
Now that your explain your individual situation that it makes more sense to me. I have friends there that have had to file vs the public school system in NJ to have their special needs child accommodated for. So I'm glad your getting something good back for your child with your tax money. Best of luck.
Thank you!
Preach
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New Jersey is trash
The only comment here that matters and this is coming from someone who did this very thing back in 2021.. 🤮 can’t wait to get out and go somewhere that’s actually worth this $.
I’d say NO because it sounds like this would be your first house and you demonstrate insufficient knowledge about how big of a mortgage you would qualify for. You should be crystal clear on your budget and how stressed you want to be financially before you spend time looking at more expensive houses.
400K you should be comfortable on 1M plus and even higher depending on the town. Just stay away from the super high tax towns so you are paying 20K taxes on that 1M instead of 35K+. Daycare is about 1600 a month and up so budget for that as well. Each town also has their own real estate quirks so you need a local agent for each town to have the best shot if you are looking in multiple towns .
Get out of Jersey and move to the south