Tuesday, March 20, 2007

I'm Playing the World's Tiniest Violin...

This weekend, someone stole my newspaper on Saturday, so I didn't get to read my beloved Real Estate section. I bought the Saturday paper on the newsstand but it didn't contain the advance Sunday sections that home subscribers get, and these, of course, were not delivered with my Sunday paper. I was tempted to go and buy another copy just so I could read the RE articles, especially since this week featured the special "Key" magazine section. But then I remembered that I could read it online for free. I was still sort of tempted to spend the $4.50 or however much it is now, just because I like reading it on paper-- I guess I'm old-fashioned that way, but in the end I decided it wasn't worth it.

The Real Estate section is fascinating to me, not just because I am interested in the housing market, but because it is the section of the paper that really shows how differently New Yorkers live, and the skewed perception we have of ourselves, at least those of us who read the Times, etc. Every week in the RE section, you can read some priceless comments that just make it sound as if everyone in the world is just deprived if they have to live in anything less than a $750,000 one-bedroom apartment with a doorman and views of Central Park. If such an apartment even exists in that price range, that is!
The RE section is also quite the showcase for over-indulged children, as it seems rare for them to profile anyone under the age of 35 whose parents aren't paying at least part of their rent. This weekend's article, Buying with Help From Mom and Dad, is a classic. Here's my favorite quote:

More buyers are turning to therapists to help them work through how they feel about depending financially on their parents when they have carved out independent careers and lives. Dr. Richard Shadick, a Manhattan psychologist who works mainly with 20- and 30-something New Yorkers, said that “a good portion” of his cases focus on the problems of seeking financial help from parents to pay for housing.
Awww! Your parents bought you a million dollar apartment and you need therapy to cope with it! I only wish I had that kind of psychological problems!

The article discusses many of the reasons these people need therapy, besides their feelings of dependency: often parents buy their children apartments with strings attached, such as a stipulation that no boyfriends or girlfriends can move in, and that family visits must always be accomodated. And there is the young woman who is upset that her parents want to buy her all-new furniture to replace her funky vintage items-- again, a "problem" I think I could learn to live with!

Some of these parents do sign contracts with their kids and make sure there is some level of accountability and varying degrees of repaying the money. And to be fair, another main point of the article is that today's market is just so different from even 10 years ago, when young adults like me with halfway decent junior-level jobs actually could afford to buy entry-level apartments much more easily. But I can't help it, these kinds of stories still make me feel a bit ill.


Charles said...

The same thing happens here in San Francisco, so many people are looking at million dollar plus homes and I asked how can they do that and they say their parents helped them, and they don't blink. It's like a right. What gets me is so many feel that they "earned" their place in life, we seem to be more of a "Paris Hilton" world every day, born on third thinking we hit a triple.

Anonymous said...

I know plenty of people that have their parents help or purchase their apts outright in Manhattan. I'm pretty disgusted, but then again if my parents were that rich sign me up!

Unknown said...

Great post and an insight to human behavior. I was in one of the top two wealthy areas of USA this weekend visiting friends (ground people who live in an expensive area) and they were sharing some similar observations. I like the idea of borrowing from family via private mortgages (keep the wealth in the family) yet a Million Free is almost incomprehensible to me yet for the ultra wealthy, it may just a fraction of 1 percent of their wealth.

English Major said...

I ran into the mother of some old friends doing jury duty earlier this year. She's selling real estate these days, and gave me a lengthy speech about how good it is to buy young. When I stressed the impecunities of entry-level publishing, she said, "Oh, we bought ----'s apartment." I envy her kids, actually--just straight-up envy, really, not in the tinged-with-resentment way. If parents want to help their kids and can afford it, why not? Lucky kids.

I don't think my parents would (could) buy me a Manhattan apartment, but they did offer $6,000 cold, hard, cash from my parents recently, in a lump-sum check that's intended to be their financial contribution to my life in 2007. I accepted, and put $5,000 into my Roth and saved $1,000 earmarked for future travel. It does feel like something I have to grapple with, but I'm certainly appreciative. I wonder how I'd feel if they offered to put up a down payment for me.

On the other hand, you know, one can really just think of these things as early payouts on an inheritance...and then we pretty much just have to confront the fact that we're being resentful and slightly scornful of people because they're lucky enough to be born rich.

Sorry for not reaching a conclusion here. I'm just thinking out loud.

Escape Brooklyn said...

I have to admit that since I cancelled my weekend New York Times subscription (I peruse it online instead), I've been a lot happier. And I also save $19.50/month! I think seeing too much of how the "other half" lives, especially in NYC, was keeping a lot of the pressure on and my resentment just reached a boiling point. Now I can enjoy my weekends instead of obsessing over the real estate section to find the next "deal." (Hint: it no longer exists in Brooklyn.)

mOOm said...

The typical PF Blogger is atypical (based on the surveys I've seen mentioned in the media) in terms of receiving financial help from family. Parents helping children buying apartments is pretty normal in many countries (certainly Israel and now UK too). My brother didn't get any help though which is why he lives in one of the cheapest towns in the country. He couldn't afford to buy in Jerusalem. So does my Mom in the next building. If you have the money it makes sense to use it when it is useful I think rather than only leaving it to your children after you die when they have a lot less use for it anyway probably.

Anonymous said...

well I love the NYTimes on Sunday but that was only for the job market section. As for RE, I read it sometimes. I love being independent but if I had rich parents, I pray they never want to see them dead. Many people who have money end up not knowing what to do and kill themselves

frugal zeitgeist said...

My folks kicked in 20K back in 2001 because if they hadn't, I would have flunked my board interview. I'm not proud of that, but it's been a great incentive for me to prove myself worthy of their trust and confidence.

20 months till the apartment is paid completely paid off. That's my therapy right there.

Anonymous said...

I just hope these people remember who to vote for when they get the deluded notion that they did it all for themselves and that it's welfare mothers who expect a handout.

Sheesh, doesn't anyone rent anymore?

-the last of the middle class

Anonymous said...

I can see both sides really. It's true that I think it's a disservice to the children to have things handed to them, but a lot of parents are proud of the fact that they're able to help out their kids. Where the fine line should be drawn is anybody's guess. A good thought to ponder though for those of us who will hopefully someday be wealthy parents.

Tiredbuthappy said...

My parents each (they're divorced) offered to carry my mortgage when my partner and I were shopping for a house. It was when interest rates were really low and they were shocked when I told them what kind of rate I could get on my own. I told them they'd have to beat that by a lot for me to want to bother researching how to set up a loan among family. They backed out.

Then they both offered to give us money to help us buy a nicer house than we could afford. They both had lots of "advice" (as in do it my way or I won't give you this fat check). My mother wanted us to buy in a more affluent area in a good school district. My father wanted me and my partner to sign papers giving me a larger share of the house so that my partner wouldn't walk off with my dad's "capital" if we broke up. Both of my parents did not say directly but pretty clearly implied that they wanted us to buy in a neighborhood with more white people in it than the one we were living in.

We told them no thank you, we are perfectly cabable of buying our own house. I also explained, slowly, that if they helped us come up with the down payment to buy this mythical huge perfect house in a good school district, we would also need monthly cash infusions to make the mortgage payments.

They ended up both rather sheepishly giving us money for other things (my father to help us buy a used car and my mother to help us renovate the old beat-up house we ultimately bought).

My partner's parents on the other hand wrote us a check with no unoslicited advice.

Am I proud of taking money from all three sets of parents? Not really. But I did turn around and give part of it away to a friend from a working class background who was putting herself through college. Is this kind of conscience salve enough? No. But it was satisfying to give some of my dad's precious "capital" to someone he probably wouldn't even allow on his property.

Good post, Madame. You sure can nail 'em.

Anonymous said...

My wife and I purchased our first house at the end of last summer. We put down about 6% and my parents are playing the 'bank'. We are are doing a private loan (30 year fixed) through my parents. We paid about $2,000+ in interest in '06, and I'm much happier with it going to Mom and Dad rather than someone I don't know.

Anonymous said...


That's inspiring to hear!

Anonymous said...

Who is providing therapy for Dr. Richard Shadick? Yah, his Mommy and Daddy are paying for his upper east side apartment. What a joke!