Would You Rather: Apartment or Prada?

posted by anon

Jul 31, 2007 11:00AM

you sound incredibly ridiculous in this post, it actually made me angry.

posted by aja

Jul 31, 2007 11:02AM

i was just contemplating the same thing - giving up shopping to buy a place, but a house in brooklyn, not an apartment in manhattan. it's incredibly hard. the pay off of shopping for clothes and shoes is immediate, saving to buy a place to live seems so long term...

posted by guest

Jul 31, 2007 11:10AM

If you don't like the idea of someone not shopping, then I'm guessing Buy Nothing Day or Reverend Billy and the Church of Stop Shopping makes you break out in hives?

Don't even google "the Compact. " (the pledge to buy nothing new for a year, not the Revlon kind.)

posted by designage

Jul 31, 2007 11:12AM

one could also use saving money as an excuse to get more creative with clothes - such as the second example in the article, who bought fabric and learned to sew.

posted by a

Jul 31, 2007 11:15AM

I actually found the article in the Times to be pretty insulting (but the R.E. section always is patronizing and unrealistic, shilling to the real estate lobby and ignoring reality). My parents gave up everything to save when they first bought and that seems (in the real world at least) to be pretty standard today--except for the super-rich and the very fortunate whom the Times usually focuses on in its RE stories (with a few token middle-class strivers thrown in for good measure).

As for me, I started buying more clothes and more expensive items when the RE market surged and it became clear that apartments were ridiculously over-priced and that I couldn't save enough to get close to a deposit even if I lived on ramen noodles and tap water. That may be silly but I'm sure I'm not alone in trading hopes of an apt (at least in the short term) for fabulous clothes. I still save for a place but not at the rate I used to when it was still possible for a single professional who didn't work in finance, law or medicine to get a 1 bedroom in a safe neighborhood in Brooklyn without winning the lottery or getting a huge gift or inheritance. Rant over.

posted by OutFitKit

Jul 31, 2007 11:32AM

I read this article, yesterday, and it seemed a bit far fetched. I would love to see a follow-up article in a couple of years to see if these people have been able to afford their mortgages. It seems that at a $100,000 (pre-tax)income and a mortgage of around $400,000 plus maintenance and property taxes (assuming a condo) you would be cutting it close every month.

You would not just be giving up shopping for the down payment you would be giving up shopping to make the mortgage payment, too. Although, I definitely advocate cutting frivolous spending to achieve larger financial goals.

posted by roll

Jul 31, 2007 12:20PM

whatever. it's all relative. the same thing as you giving up certain things to buy that $300 pair of shoes.

For some people, owing their own home is more valuable than owning a expensive, designer dresses and shoes. Is that so hard to wrap your head around? And who says their frumpy?

posted by White collar

Jul 31, 2007 12:22PM

Who says you need to drop thousands of dollars to look good and feel good?

This, coming from people whose every other word, is DIY and Forever 21.

posted by Annmarie

Jul 31, 2007 12:26PM

Ive quit shopping for my dream job. I mean...sure, I'd be happy with a new Miu Miu bag, but is it worth being miserable from 9-7 every day? Its annoying and sad that what I'm doing now has next-to-invisible paychecks for the first few years, but I'd rather be doing what I love.

On the other hand, I think my clothes have also gotten a lot more creative/interesting, owing to being only able to afford vintage and Forever 21...

posted by Magda

Jul 31, 2007 12:34PM

And when they sell those apartments in 5 years, the profit they make will afford them the luxury of Prada without checking the available credit on their Mastercard. Real estate will appreciate much faster than Rodarte...

posted by a

Jul 31, 2007 12:39PM

Roll, I don't think anybody would disagree with you and I'm sure nobody is using the term frumpy. The article--and the posts like mine--all center on the NYC real estate market--complete with monthy maintenance payments that can be the size of a rent in their own right. If I lived elsewhere, I would have owned by now.

It's more a statement that, yes, many of us do want a home of our own more than a fancy frock, but in current market conditions, that's not doable. Also, it's a comment on the insanity that passes for reality in the NYT Real Estate section where every other 25 year old buys $600K apts and young couples starting out struggle to find a nice 3-br for $4.5 Million (with monthly maintenance of $1,000 and up). And that maintenance goes up every year, sometimes more than a rent.

For me, I stopped saving everything when I saw apartment prices triple in a year while my salary went up 5% (I got a merit raise...) and my rent went up $300 a month. I moved to a far cheaper place and continue saving and I buy in the sales--just more clothes than before and at higher price points so that they last longer. But I'm not dumping hundreds on bags etc.

And who is to say that a rented place isn't your home either? I'm all for home ownership but it isn't always a wise investment and it isn't always possible in all markets.

posted by heather

Jul 31, 2007 12:42PM

There is something very liberating about being able to drop out of the fashion rat race. And like above posters have noted, it's an exercise in creativity to work with vintage or cheap fashion or, better yet, what's already in your closet (which I'm sure for many on the board is more than enough).

As for the house factor, does anybody here really want to end up like Carrie on Sex and the City, with $40,000 in shoes, no savings and credit so bad you can't even get a loan to buy an apartment?

posted by kayla

Jul 31, 2007 12:50PM

The very first thing I set my sights on after graduating college & getting a good job was putting myself in the position to buy a house. I had to make sacrifices (my wardrobe being the main - & also no cable t.v.) but it's so worth it to lock in now and know that instead of pouring your money down the drain on a rental you're building equity.

It's definitely not for everybody but I think for many it's a smart financial decision that's worth these sacrfices

posted by Faran

Jul 31, 2007 12:53PM

But it shouldn't be an either-or situation. What the article fails to point out - that Alison does - is if these guys are spending $15,000 on Prada shoes, they have the means to buy an apartment, they just haven't been as productive about their assets as they could have been.

Most of us can't spend $15,000 a year on shoes - or even on rent - and so to think that if we give up all clothes, we'll magically get the $1 million needed for an apartment - it's ludicrous.

Nobody is saying you should blow all your savings on a Nina Ricci couture gown, but it seems unreasonable to eat crackers, wear things you may not enjoy anymore, and wait for your $500,000 deposit to build in your bank account. There are other ways, like smart investing, to get there.

posted by Laia

Jul 31, 2007 1:01PM

thanks for that link! there's some cool ideas that I will use for my new apartment (rented of course, i buy too many shoes and am waaay too young to own an apartment)

posted by a

Jul 31, 2007 1:25PM

The article in the Times also fails to point out that, like any investment, real estate can decline in value. It also fails to point out that with the median NYC income being $43 K per annum and apts averaging $1 million plus maintenance, taxes and/or condo fees, there is a major disconnect. NYC isn't Pittsburgh, Kansas City or Portland, OR (to pick three random cities).

Obviously there are cheaper apts. but you are still looking at $200 K plus maintenance of at least $400 a month for a one bedroom in a less desirable part of an outer borough. At 20% down plus closing costs, that's $40K or nearly a year's salary before tax. Saving that while paying rent, utilities and transportation isn't easy on an average salary (and many of us only earn a shade above average).

I'm not spending $40,000 on shoes or even advocating it, but I do buy clothes now rather than wearing old ones as I did before. And, yes, I had no cable and spent next to nothing when saving, but you still have pretty little left to play with relative to elsewhere given the costs. So, no, I'm not wasting my cash a la Carrie, but I'm not living like a monk either.

posted by leia

Jul 31, 2007 2:20PM

You so got that prada pic from the rafaello network! I'd recognize their backgrounds anywhere! ;-)

posted by Sandra

Jul 31, 2007 2:20PM

I think they gave up shopping for really expensive items. Not shopping all together right? I mean, one does have to get dressed. But you don't need Prada pumps to look good.

This is where real style kicks in. I shop all the time, just not always for Prada.

I'm more worried about these young people buying in a bad real estate economy. I hope they did their homework!

posted by Steph

Jul 31, 2007 2:30PM

"It’s all about how young city professionals bought apartments in New York, all without trust funds or Wall Street jobs.

How did they do it?"

It's called they accepted adulthood, pulled their heads out of their asses and realized that there were more important things in life than obsessive consumerism. Grow up.

posted by Home owner

Jul 31, 2007 2:33PM

I relate to this article (well some of it- not the extreme stuff) because I am in my 20s and just recently bough an apartment in manhattan. I also work in fashion and had to cut my shopping down a lot. It's so hard because I love fashion and work in an office where despite what my friends say- people do notice how you dress and it helps if you can splash out in some designer stuff. I think manahttan is the hardest place to deal. It kills me.

posted by Keisha

Jul 31, 2007 2:37PM

Really Steph? Lame.

What's actually "grown up" is recognising that not everyone wants what you do.

Perhaps the real grown ups are smart enough to figure out how to get an apartment, job, or life without sacrificing what they love.

As opposed to people like you, who bitch and moan on websites because you can't solve yourself.

posted by WindyCityGal

Jul 31, 2007 2:44PM

This is why I live in Chicago. Unless you are or are dating a Wall Street banker/trader, it's impossible to live in anything but third-world conditions.

posted by Curious

Jul 31, 2007 2:48PM

Home owner,
how did you manage to save up and, ( not to be rude) how much did you save up, how long, did you have help. Just curious b/c I am 22, just graduated and am contemplating whether i should schlep from long island to and fro day in and day out in order to save up, or just start renting like everyone else ?

posted by Home owner

Jul 31, 2007 2:55PM

I am in my late 20s and -here's the part that you're not going like- I lived with my parents in LI for two years and stopped hitting up H&M every weekend. I also stopped going out 4 nights a week and stuck to weekends and work events only. the commuting to LI helped that though. ugh.

posted by Curious

Jul 31, 2007 3:17PM

Thanks for the insight, i juvtthought that the idea of coming back to LI after living on campus in the city and living abroad was just unbearable, but at least it has its upsides

posted by heather

Jul 31, 2007 4:05PM

It's not just that New York real estate is more expensive. I think a big part of the problem is the fact that people who live there tend to be firing on all cylinders in terms of their lifestyles.

You move to New York and all of a sudden you feel like you have to be the most stylish with the most fabulous social life, eating at the newest restaurant, even though you share a studio with a roommate and buy White Rose brand food at Gristedes. Even if you think you're immune to the pressure or you're not materialistic, it's still there quietly asserting itself whenever you pass by someone who dresses more stylishly or appears to have a better life than you.

Sure, the whole keeping-up-with-the-Joneses phenomenon happens everywhere but I think it's magnified in New York where everyone is trying to live up to the hype, to be the best and brightest.

posted by elizabeth

Jul 31, 2007 6:56PM

Choosing to rent or buy really is a personal choice, and should be based on your finances and also what you envision your future to be--buying a condo or house isn't wise if you're unwilling to commit three years to where you're living, and it brings with it a whole host of other issues. I currently rent because I know I won't be living in the city I'm in beyond the next year and a half, and I have no interest in making that sort of investment right now.

Also, to answer the question how they did it--they took out a mortgage. It's not that difficult to get a loan nowadays....

posted by Courtney

Jul 31, 2007 7:39PM

You actually don't need a down payment these days, as long as you want to finance %110 of the cost of your apartment.

It doesn't need to be an either/or situation. I know plenty of people who have bought houses without sacrificing shopping, going out, etc. But they don't buy Prada either.

posted by LCTN

Aug 01, 2007 12:18AM

God, this article has been haunting me for two days now - I even talked about it in therapy today. I don't even live in NYC any more and find saving up to buy a home daunting. I'll admit: I don't want to give up things like the Net-A-Porter MJ pumps I got yesterday and that cost HALF my rent - but that i really really really want to keep. Saving money is really mind over matter, at least for me; I have to resist. But my addictive personality makes this tough. Plus, I just really love pretty things!

posted by guest

Aug 01, 2007 11:20AM

Isn't anyone else sad that the article pointed out that the combined salary was $100,000? Anywhere else in the country, that is a more-than-liveable wage, even a slightly wealthy one. Here? Barely middle class.

In 5 years, where will the middle class be in NYC? Squatting, albeit in sale-purchased Choos, eating Key Foods brand applesauce?

Bummer.

posted by renter

Aug 01, 2007 12:37PM

Annonymous, you got that right. I grew up in a family of five in the Midwest living in a nice house in a fairly affluent suburban area on a combined income of not even $100,000. And statistically, in the US, I do believe that is upper-middle class. The fact that 100k is borderline poor here in NYC sorta makes me sick.

posted by a

Aug 01, 2007 2:36PM

Courtney, the 110% loan suggestion isn't wise (and I know you weren't advocating it), especially given the sub-prime meltdown, declining house prices and the particulars of buying in NYC. Often co-ops mandate 20% or more as a downpayment, some wanting over 50% and they scrutinize finances before approval, wanting to see money in your accounts after you've put your deposit down and paid your closing costs so they know you can cover maintenance for several months to a year. Most of the housing here is co-op and condos are getting close to requiring some of the same financials.

Clearly, two points emerge in this discussion, the first and most obvious being NYC isn't like most other markets. You can buy here and still be paying what most would see as a large mortgage or rent every month in maintenance that can go up if the building decides to do repairs or improvements even if you don't want them.

Secondly. we have a lot of tempting sales on clothing so you can wear high end stuff here for the price of Express elsewhere (I've got plenty of great things on sale for 80-90% off).

And yes it is is pitiful that 100K here is scraping by and it's not because people waste money (I spend less on food, travel and entertainment, not to mention clothes than my friends in smaller, cheaper cities). It's just the basics--rent, utilities--are really high and the rent kills your paycheck. I've seen the faces on newcomers when they move here and think that they can get something nice for under $1,000 a month and realize what that gets them.