Living in Suburbs of NYC - Advice Needed
Hi everyone, PE Principal here. My wife and I work in midtown NYC and are considering buying a house and moving to the suburbs to get more space (we have a one year old).
Looking at Westchester, it feels like to get a decent sized house (3k sq ft plus) is at least $2mm, plus insanely high property taxes (~2% of property value, so looking at ~$40k+ per year). Benefit is if you live close to the train station, your door to door commute can be less than an hour (in some cases as good as 30-45 minutes).
Greenwich / CT has lower property taxes, although this is reflected in higher home values. To get a house within walking distance of the train station, it feels like one's budget needs to be $2.5-$3.5mm which is pretty high. Door to door commute (assuming taking the train and midtown work location) is going to be a little over an hour each way which adds up over the course of the week.
I had two questions for the group. First, has anyone else moved to the NYC suburbs and taken Metro North? I don't know if it's just me, but I find the commute pretty draining, especially given the train ride is somewhat bumpy / not the smoothest. I'm in the office 3-4 days per week, which is certainly better than 5 days per week in office and would help with the commute, although still not great. If Metro North were like Amtrak which has a tray table you can put your laptop and work more easily, I think that would be nicer.
How have others passed the time on the train? Some say a train commute is better than driving because you can sleep, read, listen to podcasts, work etc. Is the commute always draining, or does one get used to it?
There are other cities (more like tier 2) where one can buy a house in a central part of town for $1-2mm and have a short (~10-20 minute) drive to the office which is pretty amazing. Unfortunately, this simply doesn't exist in NYC. Unless one wants to buy a townhome in the upper west / upper east side or somewhere in Brooklyn and pay $3-5mm, it's very hard to buy a house in the NYC area and have a sub-30 minute commute.
Before covid, a lot of the senior people were living in the suburbs and taking the train in 5 days per week, so clearly it can be done. Perhaps they are used to it and have been doing it for a long time.
The other question I had was around budget for a home. My wife and I are in our mid 30s and have decent savings. That said, the PE fund I work at has a European carry waterfall and most likely won't pay carry for at least 5 more years. Without giving away too much about our finances, would it be irresponsible to buy a ~$3mm-$3.5mm home in the CT area if it means our annual savings would drop to the ~$100k level?
People always say that the mid levels of PE are a cash poor time as one has to invest a lot into the fund in order to receive carry and the carry takes years to pay out (assuming European waterfall). So on the one hand I think it's probably okay to spend this much on a home, on the other hand if one takes the conservative view that the carry may not pay out, then it's potentially aggressive to buy such an expensive home. On the flipside, even if the carry doesn't pay out a lot, presumably one is still getting promoted along the way and having their cash comp go up which should help with finances.
While $3mm-$3.5mm may sound like a lot, this is basically affording a ~4k sq ft home in the Greenwich area within walking distance of the train station, so by no means buying a huge mansion or anything. Home prices are a bit cheaper if you're willing to drive 10-20 minutes to the train station, although people have advised me to avoid this as it further lengthens the commute.
Home prices have gone up a lot since covid, and with the current state of the PE industry, it doesn't feel like comp has necessarily risen to match inflation in the NYC area (especially given how expensive mortgages have gotten). The benefit of moving to the suburbs is not having to pay NYC city tax (so saving ~4% of paycheck) and having great public schools (so no need to pay ~$50k/year per kid for private school like one may have to do living in NYC).
Thank you for the group's thoughts, much appreciated!
I'd personally give a nicer area of Brooklyn a hard look. There are many areas like Carol Gardens, Park Slope that have good elementary public schools (the issues really only start at middle school). A train commute beats a car any day, but both parents commuting to Manhattan from a suburb is very tough for the family. I don't have first hand experience, but would wager a slim minority of families in those towns have 2 Manhattan commuters (most often one parent works locally). Keep in mind staying in the city means possibly no car (a depreciating asset) and much lower property taxes.
If you must move to the suburbs, I'd focus on Westchester. Much shorter commute and the Harlem/Hudson lines are much more reliable than the NH line. Greenwich public schools actually aren't that good for suburban standards (most with means do private). The further towns in CT like Westport and Darien have much better schools but a longer commute.
I'd also reach out to seniors who live in the suburbs and commute into the city and/or have spouses who do the same as well, and have them share their thoughts on how they manage. Best of luck!
Edit: per your second question, I'd try to stay around the $2.5mm range. That should get you at least a 3-bedroom in a nice Brooklyn neighborhood or Westchester suburb. A larger home means more maintenance and more pressure to keep up with the Joneses.
Sorry for the duplicate comments seems to have posted multiple times
Great comment, thank you. Completely agree both parents commuting from CT to Manhattan is tough. If we move to Greenwich, my wife will look for a job there, so her commute would actually become very manageable.
My wife wants to work close to home so she can come home quickly if anything happens (e.g., child gets sick, etc.). If we move to Westchester, while my commute to Manhattan would be shorter, my wife wouldn't find work in Westchester and she would then be at least a 15-30 minute drive home from her work in Greenwich (assuming she finds work there).
I've heard people similarly say that Greenwich public schools aren't as good as Westchester public schools. That said, relative to the national average, they are still pretty good / good enough right (maybe 8/10 instead of 10/10)?
Happy to help! Yes, that is helpful to know - I was under the impression that both of you were planning on working in the city long-term. I think the sweet spot then is around the 287 corridor (i.e. Scarsdale, Rye, Blind Brook, etc.). The commute to Greenwich is easy from there, and commute to the city isn't too bad. You could try Darien/Westport as well but it'll be a longer commute for you.
Greenwich schools are better than 95% of the country, but if I had that high of a budget for a home, I better want top 1% public schools. I guess it's all relative - the NYC area is lucky to have some of the best suburban public schools in America.
Having lived in both Westchester County and one of the towns you mentioned in CT above, and having spent a significant amount of time in both educational systems, Westchester County takes the cake 100%. The school's are better, the people are more down to earth (lot of Uber wealthy people in those CT towns which makes for often times snobby and rude children). Don't know the answers to your financial questions, but from the perspective of a kid who got to experience HS in both areas and has friends across Westchester and CT, pick Westchester.
Nassau County?
Since your kid is only one I wouldn’t move yet. Wait a few years. Schools don’t start until age 4-5, and it’s not like they are old enough to be in the yard or running around the neighborhood. What value are they getting out of the suburbs? In the city they’ll get more of your time which is what they really need right now.
I agree with this - I think moving to the burbs / buying a place is still pretty risky as a mid level
Greenwich 100%, I moved there a few years back after considering westchester as well and am very happy with the choice I made. The higher taxes really aren’t worth it and CT is really nice to live in.
The commute from central Greenwich is 45 minutes to grand central so really not that bad and MTA itself is great, reasonably on time and can get work done on the commute.
I send my kid to Public school and it’s honestly great, zero complaints at all and no real difference at the elementary/middle school level. Agree that in high school westchester schools are generally better.
I highly recommend riverside/old Greenwich. Everyone is down to earth there and feels like a real community, you literally know everyone in town and it’s very social plus 10 minutes at most from the beach/parks which are great in the summer.
Feel free to DM me, can put you in touch with others that made the move and also have a lot more detail I can share.
I used to do 70-80 minutes door to door on the NJCL line, but my hours were flexible. I also had roles in NJ itself that were a 15-20 minutes drive, which was great. You can treat the train time as work hours if the firm allows remote login (not sure about PE, banks and tech firms are flexible about this, quant firms tend to have a lot of restrictions) or read books on your phone. NJ transit (both the train and buses) is pretty unreliable these days, LIRR/MN are supposed to be a bit better. PATH is more reliable but very crowded. I find the ferry is the best option from NJ but it only runs at rush hour times.
To be honest a lot of these NYC finance careers are becoming questionable now given the cost of housing for a new buyer. Someone starting now is very unlikely to get to MD or be a top PM, and a mid-level person won't be able to buy a really good house in the area anymore.
Sorry for the duplicate comments seems to have been a glitch
Loved reading this post. Makes me feel better about my first world plight as well.
I am renting because I’m finding it very hard to find a house in the suburbs. When we moved up here, I thought 2mm was plenty for a house. But I’ve now realized I’m likely going to spend 4mm to get something nice.
If you’re only going to spend 2.5mm in places like Westchester and Greenwich, it’s going to be a small home or a crappy home.
I think stretching for your home depends on one thing, what does your wife bring to the table financially.
If she is also a PE professional or has a rich family, I think you can risk it and decimate your savings for the best house you can get.
But if you’re the main breadwinner, and she has a mediocre job and normal middle to lower class parents, I would err on the side of caution and not financially stretch yourself for your first house. Because if you lost your job, your debt burden to quickly overwhelm you.
Many of the people I have met in the suburbs are basically just like me. Either one or both the spouses have high paying and they have winners for parents who can help if needed. That’s why the house prices are so crazy, many families are successful in their own right and have successful parents.
The public schools are all great. I think the people who live in the nice nyc suburbs and send their kids to private school simply have an enormous amount of money and figure they might as well spend it. I mean think about it this way, how bad could a public school really be in Westchester or Darien or Greenwich lol?
As far as the train, I just sleep. But as someone said earlier, having both parents work in Manhattan will be brutal. You will need to have your wife do a good job making friends with other moms and hustle to find a great nanny. Thats actually a big deal you’re not considering.
Yeah I totally get that. Home prices in Westchester and CT are up 50% since covid which makes it hard to buy. My hope is that home prices are temporarily elevated given there are so few homes on the market and sellers need to get high home prices in order to afford buying a new house with mortgage rates where they are. It's sort of counterintuitive as one would expect home prices to go down as rates go up which hasn't happened this time around.
People have said if/when rates start to come down, home prices could go up further as there will be a lot more demand. However, there will also be a lot more homes on the market, so we'll have to see how it plays out.
While home prices are up 50%, the S&P is up 100% since covid, so I guess it's one of those situations where in wealthy neighborhoods, one can't expect their net worth to go up a lot with the market and then for home prices in those nice neighborhoods to only increase at ~2-3% inflation; it just doesn't seem to work that way. Your net worth is going up just as everyone else's is around you while the home supply stays relatively unchanged, so home prices go up a bunch.
To make the math work in the Westchester/CT suburbs and afford a $2.5-4mm house, it seems like one needs to be further along in one's career (approaching if not already at MD / Partner level) or as already noted, have a spouse with a high paying job and/or wealthy parents who can support. Otherwise it all just feels like such a crap shoot and too risky of a move.
How confident are you that your kid is going to be A+++? Stuy is as good as anywhere. I went to a full ride place in Manhattan, and I wouldn't trade it for anything.
Look into Whitestone. It's a cushy suburb in Queens.
In NJ there are several towns with exceptional stats obtainable with 2M+ Budget. I will suggest 2. Westfield or Short Hills. One I am from, and had the pleasure, upon joining a boutique IB a while ago for a stint, of listening to President tell me he considered my town ..negatives..chose other. 1M gets you in. That said, there are Quant Fund founders also in town. Public School attended by most.
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