By Aarthi Swaminathan
‘I have a nice amount in savings and in investments, worth about $1 million, and a good amount in Social Security and in pensions’
I’m a 68-year-old single, retired nurse. I own an apartment that’s worth approximately $450,000 in New York City. I have a nice amount in savings and in investments, worth about $1 million, and a good amount in Social Security and in pensions.
Here’s the problem: I hate living in New York City. It was great when I worked eight blocks away for 33 years, but now it’s very lonely, and I’m away from family.
I want to move to a beachside town in New Jersey. But given the market right now, do I buy or do I rent? And do I sell my place or do I rent it out?
My head is spinning and filled with fear about making the wrong financial decisions. Please help!
No More New York
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Dear No more New York,
Having lived in New York City myself, I know the struggle. The city’s amazing when you’re young, you’ve got plenty of things to do, and plenty of easy food options nearby for when you’ve got no time to cook for yourself.
Plus, when you’ve got a demanding job that you can walk to eight blocks away, it must’ve been a dream, especially after working night shifts as a nurse.
But life happens, and things change.
I sympathize with your desire to move to a quieter place. I made this exact change myself. New Jersey is a great option because you’re not only able to enjoy a quieter life (fewer sirens, for one), but you’re also going to be closer to family.
You’re also going to be saving on city taxes, which can be hundreds of dollars, depending on your income.
But there are a couple of cons to consider before you make the move.
You’re not going to be able to get around as easily as you did before. New Jersey doesn’t have as great a transit system so you may need to invest in a car (if you don’t already have one), which would be an additional expense.
And if you decide to buy a home, property taxes are a lot less friendly in the Garden State, compared with New York, and especially the five boroughs. "Property taxes in New Jersey are more than double the national average and the highest in the country," Bill Kowalczuk, a broker at Coldwell Banker Warburg, told MarketWatch.
If you know exactly you want to be near family, and you’re very sure of the area, you’re confident that you’ll have enough things to do during your retirement, then maybe it’s worth selling the property in Manhattan and going all in on a single-family home in New Jersey.
But since you’re not sure of what to do, given how rents are trending in the city, it may be a good idea to put your apartment on the rental market. I’m assuming your condo unit is in Manhattan if you’re able to walk to work, so here’s a spot of good news for you: The average rental price in Manhattan as of July 2022 was $5,113, according to Douglas Elliman. The median is $4,150.
Rentals are going to be far cheaper in New Jersey, so you can probably save a little.
Not sure which beach or town you’re targeting, and the prices quoted vary, but the average rent in Atlantic City, N.J., was $1,575, according to Zillow, as of Aug. 24. The median rent in Avalon, N.J., which is in the county of Cape May, was $1,450, according to Zillow.
Given your assets and your pension, you’d have extra income from the rental, which would help cover the cost of living.
I know your head is spinning and the current economic situation is making you feel uncertain, on top of this worry that you may be making the wrong move.
You’re not alone. A lot of people feel uncertain and have decided not to buy property at the moment, for the same exact reason.
But once you feel you’ve got a strong sense of where you want to live and feel strongly about setting down roots, then you should make plans to sell your home and jump on a property in New Jersey.
Because renting over the long term can get pricey. And it looks like home-price appreciation has slowed, but hasn’t reversed.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at email@example.com.
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