Ask Curbed: Is There a 'Frenzy' in the Market?

1.

Yup.

2.

Yes! The market is crazy. Price per square feet is rising and product is still flying off of the shelves. There is no slowdown, there is no bubble.

Flame away... the market is hot.

3.

I'm seeing the same thing at some properties I'm looking at in New Jersey. The good stuff in my range is going under contract VERY quickly.

4.

yes. it's simple = everyone wants to be here and they can't build them fast enough. while the market in the rest of the country is softening (just look at FL), nyc will stay hot (unless the stock market crashes or there is another terrorist attack....even then)

5.

yawn
shills at work

6.

BUY NOW! TOMORROW IS TOO LATE. BID OVER THE OFFER BECAUSE THE PRICE WILL BE 10% HIGHER NEXT MONTH. *NOTHING* WILL BRING TIHS MARKET DOWN. INVEST NOW AT $1,000/SQ FT AND SELL NEXT YEAR FOR $5,000/SQ FT!

7.

Development sites are down 15% on a little while ago, condo inventory is higher than coop inventory, developers have to drop their price to below market (billyburg anyone) to clear stock.

Liquidity and low interest rates and a still weakening dollar can only take a boiling market so far, for the time being; rental prices have to go up to a half decent cap rate to make the market price make sense.

I think the manhattan market will be lucky to survive with just a 10% market price drop. Brooklyn will fair worse.

That being said, at the bottom end of the market, I don't see too wild a discount. The penthouse/upper upper market is already feeling a glut in supply.

8.

my apartment was on the market since november with no offers and in the last 30 days i've had 5 offers and tons of showing. open houses have been very well-attended. i blamed the first two months on a crappy realtor, so it's hard to say it's all the market, but that's my experience.

9.

I agree.

10.

I live in a condo in the finacial district and try to pay attention on the weekends to open houses in my building. In the last half of last year there were a around 3 properties for sale all of which during the open houses i would see the broker sitting in the lobby staring at their watch. We currently have 2 condos on the market right now and just today at one of the open houses talking to the doorman he had noticed 5 or 6 people coming through to look at it. Also had noticed the asking price for one of the places go up 20k from a month prior. Seems that there is renewed interest at the moment.

11.

Manhattan real estate prices are about half of London.
We live on an island people!
Expect prices to double from here by 2012.

12.

#11

My house in london was on the market for over a year an a half before it sold. It was not priced above market.

London is feeling a boom and bust resurgence right now fueled by international investors (notably from russia, china and india) who don't trust the american market's stability.

Central london does have a low vacancy rate on rentals (commercial) but please, before you quote london, go there and try to rent an apartment. The prices are double and the demand is miniscule.

13.

Hey Dude, hasn't Manhattan always been an island?

14.

bought my studio in brooklyn over the summer for 250K and just sold it last week for 320K.

15.

BOUGHT MY PLACE LAST WEEK FOR $870K AND SOLD IT TODAY FOR $2.9 MILLION!

16.

I agree. Toll Brothers Fifth Street Lofts just, like JUST went on the market in LIC and almost all the 1-bedrooms are already taken. They can't even update the website fast enough to reflect this.

17.

Buy before it's too late! humans are now immortal so nobody will ever move out of their homes! snatch up the remaining inventory or be priced out forever!

18.

The pace of sales at the Toll Brothers Fifth Street Lofts is literally faster than I can type this. Forget about updating a Web site. Two apartments just sold while you were reading this thread.

19.

i live in a new building uptown. when we moved in 20 apartments were sold. for the next 6 monnths, the last 5 apts languished and open houses were unattended. in the last month all but one went into contract. so from where im sitting, there seems to be a change in the wind.

that doesnt disprove the dead cat bounce theory--but at the very least supports the perception that for NOW...things seem to be selling.

20.

Don't worry renters, I'm sure prices will fall later this year. Everso sure.

21.

Bought my place in the summer for $300K and sold it 6 months later for $325K.

Paid $50K in mortgage/relator/taxes/other fees.

According to most people, I did a good flip

22.

Total dead cat bounce. Lots of pent up demand is now being exercised, and since this is slow season for listings, you have the frenzy. Within 2 months, it will be quieter on the buying front, and the added sellers from 1-seasonality and 2-rush to sell from those who were holding back now, will mean a slower market again. Slower than even in November.

23.

i really do think that comparing nyc to london is, in part a fair comparison. new york city, like london continues to push farther out ahead of the rest of their respective country and position itself as "the" place to be in terms of jobs, culture, fine dining and yes, real estate. nyc is still a bargain compared to most of the world's major capitals and because of its island status with many of the good parcels of land having been snatched up in the last decade, it would only make sense that prices would continue to climb.

it's a little thing called supply and demand. although there may be a ton of new condos coming on the market, there are also a ton of new people each and every day that would like to call nyc home.

isn't that why we're all here???

24.

very simple-- bonus payout season is upon us. market will contract in Q2 '07.

25.

I bought a one bedroom in Harlem this morning for $499,999 and just flipped it for $65,000,000!!!

26.

People in London have bad teeth. And their subway is called the tube. And they revere this queeny woman who has never accomplished anything in her life other than being born.

27.

FYI - the places I was looking at and noticed this were lower end (in the 600's) co-ops

28.

I think it's safe to say reading these comments that no one knows what the fuck they're talking about. (As usual.)

Drivel on, minions...

29.

#25 -- Nice work! Just think, though... Had you waited another month, you might have gotten $75. The market is HOT.

30.

i love how all the renters come on here and say how prices will fall. i could go back into the curbed archives and find the same effing posts from last year...and probably from the year before...some from the exact same people.

EVEN if prices were to fall significantly, most people who were able to buy something have already made a significant amount of money that a 20% drop would still leave them ahead of the game...

what is your point bitter renters????

do you really think saying year in and year out that nyc real estate is going to crash that it will even though those around you are making a ton of cash??

you do realize we had a horrible terrorist attack on our city 6 years ago and things are STILL plunging ahead.

it's just such sour grapes and so transparent.

31.

PEOPLE ARE GETTING THEIR TAX RETURNS!!!! IT WILL DIE DOWN AGAIN.

32.

#30 and #24 are correct...that's all. no biggie.

33.

London sucks. It is a very overratted city. I am glad I move to NYC. I bought a 3 bedroom in Manhattan. I london that will have been a one bedroom with those crazy prices there. I am british and I don't have bad teeth. But many do. The Queen is annoying as hell.

34.

29 - I thought the same things as these guys when I used to rent back in the day. Everyone knows deep down that renting sucks, especially if you're over 30, but you think what you have to think to convince yourself it's actually a good deal at the time, and that homeowners are suckers, the market is collapsing, blah blah blah. Then you grow up, save your money, buy a place, and quickly realize how long you'd been fooling yourself all those years.

Sentiments like these are never based in reality, especially in New York City. This is Renter Psychology 101.

35.

FYI -

the places i was looking at were in the 500-700k range, co-ops. so i don't think wall street bonuses or huge tax returns have much to do with it.

36.

long island is an island too.

37.

I agree, people who think prices are going to drop are in serious denial.

38.

NYC is too expensive! That is it, I am out. I am moving to Shitladelphia.

39.

It's very simple. Wall Street got HUGE bonuses. Wall Streeters like to buy toys (property) with bonus cash. The flood increases demand. Temporarily. In a few months when that cash is absorbed, it will resume the downward trend.

People like #29 don't grasp economic principles. It's like when the NASDAQ was 5,000 in 2000 and people were saying this is a new economy. Face it, RE rose at unrivaled levels for several years. The theory of "reversion to the mean" demands that a correction occur.

Already money has flowed out of Real Estate and into world markets. We are seeing a dead cat bounce. The end is not near for those still waiting to buy. Don't fall for the hard sell from brokers hoping they can still wring some fear out of the formerly hot market.

PS: #13 - isn't it amazing that the people crying out "it's an Island - prices can't fall because everyone loves Manhattan!!" forget that prices have fallen, and significantly so - within the last few decades. It was an island then, too. Go figure.

40.

I am still renting and waiting. :(

41.

#35...and if you've ever been to long island you would know that they also have extremeley high prices for real estate....

what was your point?

42.

Strange market.

My wife and I have been causually looking for about a year, we live downtown(sold a one bedroom in 04) and have been looking for a 2 bed in tribeca, Park Slope/dumbo. Many of the same apartments from the early summer that we looked at are still available, and I get constant emails for stuff that looked like it was off the market and is suddenly back on. Prices are down on these about 5% -10%.

New constuction we looked at like 200 chambers(too pricey anyhow), seems to have sold well(if you believe the developers) and we have friends, all finance people, who have bought here and at J condo.

At the same time, we have other friends who had tried to sell what I would call a classic tribeca loft had to price chop and wait 6 months to sell.

We are in no rush as it way cheaper to rent even with getting jacked 10% when we renewed - we pay 4500 for a 2 bedroom. I'll sit on the cash until things settle down. Unfortunately I get a sense there is desperation buying in certain markets by people feel that it is their only salvation - scary and sad.

I was around in the early 90's so I've seen what happens when the pendulum swings the other way in nyc - ain't pretty.

43.

#33...yes, i know what you are saying. i just bought my place this year and it feels fantastic. it's a small place, but the satisfaction of knowing i own it has made a significant difference in my life. i do realize that it's not possible for everyone to do such a thing as buy real estate in this city and i don't imply that anyone is a loser for renting instead of buying, because it's damn hard, but readers of curbed are not for the most part the lower and middle class who are simply unable to afford a place. they are people who rent because for whatever reason they choose to continue to rent (oftentimes paying thousands of dollars a month in rent...probably more than it would cost to purchase something) which makes their negative posts on here all the more transparent and silly.

44.

look--markets go up and down, and NYC is no different. But, to say real estate here is going to "crash", or go down 20% or whatever, because you think it's too expensive and can't afford an apartment is ridiculous (that being said, no one can really predict markets). Buy a place you can afford and want to stay in for 5 years (or longer if you have to) and don't worry about trying to time the market--I can pretty much guarantee you will be fine. If the value of your place goes down, that probably means most other places have gone down, so you can still afford that bigger place five years from now.

45.

Hello again.

The bitch is back and better than ever. I know i've been out for several months, but i am here to make my mark here.

Since being crowned as CURBED ROYALTY, NYC (Manhattan) prices will be skyrocketing. in 2010, most of the residents will be priced out even if you are making 105K.

I am fortunate that I own two apartments when the prices was just starting to pick up. Don't be jealous, it is all about location location and location and a little bit of luck.

When i first purchased my Upper East apartment, people thought I was crazy to buy another place in DUMBO.

Now who has the last laugh?

Chin up my curbed bitches, if you bought a property, congratulations. To those of you renting, good luck because you won't afford a NYC apartment soon.

Hugs and Kisses!!!!!

46.

#41, you are SO wrong. The NYC market is completely different than any other market. There, simply, is no down. So stop whining and BUY. You'll be glad you did.

47.

So people who say that renters are merely bitter about not being in the market... can you ever envision a future in which real estate /does not/ go up?

Personally I'm sitting on a large sum of money waiting as I believe the market will go down as the prices currently are unsustainable. I could buy an apartment today, and choose not to. Does that make me a bitter renter?

48.

#13 - No Manhattan was not always an Island, it was fused to the mainland during the Ice Age. The Indians bought the place out for .02 cents then flipped it to the Dutch for $24. An enourmous gain.

49.

Good point #40. I've been sitting around waiting for the "crash" for over a 1 1/2 yrs. Finally, I said F*#*# it and am signing a contract on a 2 bedroom in Brooklyn Heights, hopefully tomorrow.

50.

#42 Svetlana. dahlink...

I was thinking about you this am and how I hadnt seen you in a while...

kiss kiss

51.

So people who say that renters are merely bitter about not being in the market... can you ever envision a future in which real estate /does not/ go up?

You are completely missing the point--as someone else said, markets go up and down, and NYC will have its down years. The point is whether (i) you can really time the market and (ii) whether NYC real estate is a good medium term investment, especially given that you have to live somewhere and spend money on rent. If you own and the market goes down 10%, it's not that big of a deal b/c the place you are moving into (assuming it's the same market) will be down 10% as well.

If you are SPECULATING on real estate, than yeah, buying now is probably a huge risk.

52.

Right, but let's say that I have to double my monthly nut in order to have a tangible increase in living standard (I have a great deal on a 1BR right now.)

If I believe that intrinsically, the doubling of my monthly nut will not double my living standard, why should I burn that money assuming that I believe that things will eventually return to rationality?

53.

#47...no i do not believe that classifies you as a bitter renter. stupid, perhaps. but not bitter.

you all seem to think that prices are going to go back to levels seen in the early 90's and it ain't gonna happen.

so a place that goes for 900 goes down to 800 if there's a crash. even 700 lets say to be totally outrageous. prices are high enough at this point that it's simply not going to go back to the way it was. this is a whole different city than it was 15 years ago.

54.

I don't believe that a 2BR on the park is suddenly going to drop to $500k -- that's unrealistic. But a 10-20% haircut off of prices -- say one of those "1000sqft" 2BR's that's hovering around 1mil now, perhaps it makes more sense at 800-850k?

55.

Pent up demand after all the doom and gloom bubble articles? yep. Realization that rents just go up and up and if you are staying you should cough it up and buy? yep. Bonuses to mid-level financial sector people who use this $$ for the down payment? yep. Cold weather stops and buyers come back out to shop then buy? yep. Manhattan continues to be a draw for people from all over the world? yep.
I could go on w/reasons forever. Add it up and you will see that we are not going to have a big price drop or bouncing cats or a "market correction." Real estate in Manhattan is what it is. Valuable commodity in the ultimate location. The falling RE markets outside of here have major job losses or large amount of speculative investors who were never going to live there anyway. We don't have that here.
So, if you are waiting for a "significant price decrease" you are delusional. Prices will rise and rise as history will no doubt show. So buy or cry.

56.

people who are "waiting" to buy a place cleary are in this only for the money. as the last few posters have said, buying a home should in part be...well just that...buying a place to live. it's certainly better than flushing money down a toilet (aka renting) so if you are simply waiting for a market crash, if you've been paying any attention at all for the past few years, it seems quite obvious to me that we are in a sustained period of growth in a city that is only getting better and better. if you believe in your city, then it's good to buy a home there. if you don't, then keep on waiting and soon enough you'll probably be forced to move back where you came from.

and in case anyone didn't see the report on foreclosures released today, they are actually down...not up.

57.

My sense is that all of the fundamentals that lead to price appreciation are still very much present:

1) People want to live here due to the great qaulity of life (low crime, clean etc.)
2) Wall Street continues to do well as does the local economy.
3)Solid leadership in government, and Bloomberg has another 2 years and 10 months.
4) Manhattan remains an international city, so to the extent that there is demand from foreigners, the weak dollar helps.
5) Manhattan has become a retirement destination for wealthy suburbanites who are now empy nesters and who would never have dreamed of moving back here from the 70's through roughly 2000.

As long as these trends continue, prices in the prime parts of Manhattan (Tribeca, UWS, WEst Village, Soho etc.) will continue to appreciate. In addition, all of that "excess inventory" that was much discussed in the Summer has been quickly absorbed, particularly int he aformentioned neighborhoods.

For the following reasons, if Wall Street has another good year, I would expect that the market will continue to appreciate by about 10% by next May. For any of you who read my posts during the dog days of summer when those predicting a bust were all over this blog, I still felt that 5% was a safe annual appreciation, but the new psychology (Which is at least 50% of economics) has lead me to raise that number.

58.

Right, but let's say that I have to double my monthly nut in order to have a tangible increase in living standard (I have a great deal on a 1BR right now.)

Don't buy. Make a spreadsheet with your rent over the next five years and compare that with a mortgage payment, the opportunity costs of a down payment, selling brokers cost etc., and assume various increases and decreases in the property value and see how you make out. If you break even (after taking into account the opportunity cost of your down payment) assuming real estate generally keeps place with inflation over the next five years, you should probably buy.

59.

Right, I can't see coming out ahead at this point.

Right now my yearly rent is approximately 3.5% of the purchase price of the equivalent apartment in the same neighborhood. A good 30yr mortgage is 5.85%. Effectively I'm 2.35% cheaper "buying" the apartment from the owner of my building, and that's not including maintenance, taxes, etc. which would make the equation even MORE unbalanced.

60.

We are also going to see the "Manhattanization" of prime parts of Brooklyn and Queens, which is either fortunate or unfortunate depending on your point of view. It seems like downtown Brooklyn will become an extension of Manhattan in about five years, which is sort of a shame for people looking for affordability.

61.

we are also probably living in one of the (if not THE) highest concentration of renting cities in the country so the fact that people are now starting to realize that this city is doing a great job in attracting new people (unlike most other cities in the northeast) it would only make sense that more and more people would want to buy something.

go to any suburb in the country...PEOPLE DON'T RENT!

and these are a lot of the people that are moving here to new york city. they don't want to rent. they want to buy their home they live in which in my opinion will only continue to sway the curve as time goes on to more of a heavily "owned" city versus a rented one.

seems like a great thing to me.

62.

these comments and this debate are so tiresome and tedious. the fact is that that market has absolutely positively heated up since the first of the year (actually since just before the holidays in december oddly enough). i'm a "casual" real estate investor - have 1 commercial space and 4 apartments i rent out. 4 of the 5 spaces came due in the last 2+ months and demand was insane, prices were up what i consider insane (even embarrassing) amounts. the 5th place is up soon and i gasped when the broker told me how much she could get for it.
and that's just the rental market. anecdotal yes, but my places represent a variety of sizes and location around manhattan, and they tell a pretty compelling story.

on the sales side, i have one close friend who is a fairly successful broker. she's been impossible to get together with for the last 3 months as she's ALWAYS out showing. she's had half a dozen 7 figure places go into contract since 1/1/7 - for realz.

not saying prices wont or cant drop (quite the contrary - they can and will) but as of this moment the market is scorching.

dead cat bounce? smart money says NO.

63.

agreed #61.

it makes the city more and more stable.

which will only continue the trend of upward prices.

64.

FYI - 59

A good 30 year mortgage rate is actually 6.125 to 6.25

65.

I am not doubting that the market is hot, nor am I saying that prices will go down, but what I want to now is: who will be able to buy property soon if prices go up?

Most people already can't afford property. Households earning less than $100K can't find a 2+br they can afford. If prices continue to climb, who will be left to buy? Even if "faraway" places like Woodhaven Queens, local residents can't afford to buy in their own hood. Surely Wall Streets aren't buying out there. Who is buying?

66.

I love it! Finally, the smarter people are dominating a conversation on Curbed!

67.

65 --

I hate to tell you this but households earning 200k can't find a 2br.

68.

"will only continue to sway the curve as time goes on to more of a heavily "owned" city versus a rented one."

I see the opposite: more investors are moving in and buying property just to rent. No standard family can afford a 1-2-3 family house, only investors with money can. They are buying up houses just to rent them out. Only the new condos are adding to the owner list.

69.

i make about 60K a year and i just bought this past year.

it takes some effort, but people in this city are too quick to spend all their money on overpriced groceries (whole foods), coffee (starbucks), and $2.00 atm fees (bank on every corner).

it's possible, and no my place is not a 2bedroom, but it is in a prime neighborhood in brooklyn and i couldn't be happier.

if you really want to own something and make an ok salary, you need to sacrifice a little bit. people in this city seem to think that sacrifice means buying only 3 pairs of 400 shoes a year instead of 10.

not trying to be snarky, but it's kinda true...

70.

I work in the financial services industry and two of my colleagues bought their first apts in the city (2BR). They weren't really thinking about buying until about 3-6 months ago, but then their rents went up 10-15% for a second year in a row and they started looking. After running all sorts of models they decided that if they intend to stay in the city for the next 5 years, which they are, they decided that they are better off buying. They signed contracts in early January and now claim that similar properties are 5-7% higher. Another colleagues has been looking for a 3BR on the UWS and has not found anything and was outbid on a couple of properties.

Something that people forget when looking at Manhattan prices is that over the past 15 years on a per sq ft basis, prices have been increasing at a pace a couple of % above inflation. In the meantime the city has become a better place to live in (crime), more families want to live here as they realize that the suburbs suck and commuting to work for hours is horrible.

71.

"it's possible, and no my place is not a 2bedroom"

I mentioned households, which is 3+ people. You can't fit a couple and child[ren] in a one-bedroom.

72.

> prices have been increasing at a pace a couple of % above inflation.

A couple? A doubling of prices in the past 6 years is not a couple of percentage points.

73.

To all you renters-

Just suck it up and buy buy buy!

Anyways, I am going to get a frappuccino. Any takers?

Hugs and Kisses!

The Bitch is back and better than ever!

74.

#71 is right. Households earning 200k cannot even buy a decent 1BR in Manhattan

75.

if you are making 200K a year and can't find a suitable 1Bedroom, you cleary are not looking in the right place.

that's just a stupid thing to say.

like i said...i make 60K a year and just bought a 1bedroom a block from prospect park in prime historic park slope.

76.

sorry # 71...didn't see the part that there are 3 of you. yes, i'd agree that this would be more difficult to find something.

i still think that a lot of people here could potentially buy if they really wanted to, cooked a few more dinners, bought a coffee machine and didn't spend 14$ on martinis.

i mean...i do it on occassion too, but i'd never complain that i couldn't buy something because of the way i choose to live my life.

with 100K a year, you can do more than you think if you are good with money. check out some really lovely 2 bedrooms in prospect heights or windsor terrace for starters.

77.

22 yr old college graduates that work in investment banking make 125k+ their first year, up over 30% from 3-4 years ago. Within 2 years, they have enough for a down payment on a 1BR. So bonus theory is not limited to high end apartments - it affects wealth across wall street age groups.

As much as everyone hates to hear it: it doesn't matter if you cannot afford an apartment. That is not the barometer for affordability. It only matters if the 3rd year associate (who literally cannot live in any other city and do his extremely lucrative job) was paid well enough to afford the 2BR he wants.

If any # of things occur that cause markets to tank, M&A activity to hit the skids, private equity deals to bust, and hedge funds to blow up, compensation could come down across the street and, in my opinion, property prices could come down in sympathy. That is a real risk. But don't kid yourself into thinking that NYC property prices will ultimately respond like Boston or DC unless something with that impact happens.

78.

Those bubble blogs tried to scare the American people. They were succesful a few months ago, but god-darn it, they failed!

Buy now before you're priced out FOREVER!!!!!

79.

#72 - if you go to Mr. Samuel's website and search for data, you will notice that in '91 the average per sq ft price in Manhattan was 285 vs. 975 at the end of 2006. Do the math - it's 8.5% per year. Inflation has been running at about 4% per year over the period. Factor in significantly lower mortgage rates and see what you have...

80.

there is no rush to buy. the subprime market collapse will continue to spread to the rest of the economy. then the real fun begins.

81.

"sorry # 71...didn't see the part that there are 3 of you"

I never said there are three of me. :) I am speaking about generally about families. Households. Not singles getting their bachelor pads. The middle class. The 100K is a made up number since most households earn less than that amount. What do you do with 80K?

82.

Ok, if you are making 100K and complaining you can't afford an apartment, you are simply stupid.

I am under 27, make over 130K and I am proud to OWN TWO APARTMENTS, enjoy the city life, shop at prada, gucci, apc, intermix, miu miu, LV, eating in great restaurants and sipping on amazing apple martinis or a little dirty.

It is how you make of it.

This is life, stop complaining and do something about it.

Hugs and Kisses!

The bitch is back !

83.

#80. you are dead wrong. sorry to burst your bubble. pun intended.

Update: We just got a press release from Property Shark with some interesting data on local foreclosures. There were 354 new residential foreclosures in New York City (5 boroughs), an overall decrease (-16.7%) from the third quarter of 2006 (425 foreclosures). Staten Island had the highest foreclosure rate per household in Q4 2006, 250% higher than Brooklyn and seven times the rate per household in Manhattan. Sixteen of the top-20 zip codes for foreclosures were in Queens and Brooklyn. “The biggest surprise to us was in Brooklyn, with new foreclosure auctions down 34% from last quarter and at two-year lows,” stated Ryan Slack, chief executive officer, PropertyShark.com.

84.

"if you go to Mr. Samuel's website and search for data, you will notice that in '91 the average per sq ft price in Manhattan"

I have no idea who Mr. Samuel is, but I think the increase has been more dramatic in Queens/Brooklyn. The building I currently lived in is 10 times more expensive than 11 years ago. 1000% increase. And this seems the norm rather than an anomaly.

85.

#23:"new york city, like london continues to push farther out ahead of the rest of their respective country and position itself as "the" place to be".... Are you kidding me? NYC is crowded, filthy, noisy.... yes it's energetic and I can put up with it for a few days on business trips and a have a little fun. Live there? No way. Oh, but I guess it is like London- crowded, noisy, filthy, gloomy..... By the way, your restaurants are way over rated. How do you people look at yourselves in the mirror after paying more for a tiny little box in a prison-like building than most American would pay for a nice house on a big piece of property 9where you don't have to smell your neighbors' cooking or hear their kids running over your head).

86.

I am sorry but DUMBO sucks. To many Manhattan wannabes. I rather live in SOBRO. Those are the real New Yorkers there. Word to ya mother!

87.

83 -

I completely agree w/ you. In the rest of the country ARM mortgages are also driving the downward trend, whereas Manhattan co-ops, and condos even, don't allow buyers to put themselves in a position where they are going to be foreclosed on.

88.

England: a European country except without the good food or beautiful women

89.

My wife and I just signed a lease on an apartment in Somerville, Mass. Every day I come to curbed and read threads like this one and it reminds me what a good idea it is to leave New York. Actually, I kind of hope that the city continues to turn into an uninterrupted sea of condo towers filled with Charbucks-chugging twits whose only concern is making a fast buck on the next deal, so you'll all be in one place and the rest of us can go on living happily without you.

90.

wow svet, you act richer than you are. only making over 130K! we all knew you were full of shit but now you just gave all the goods away. now i just feel sorry for your pretentious ass.

to afford the shopping and dining like you said, you probably don't pay your taxes. but then again, you probabaly don't even have a real social security number.

91.

And Svetlana earned every penny of that $130k.

She is my hardest worker, and very much in demand by her clientele.

92.

#89 then why the hell are you visiting a NY real estate blog DAILY? keep telling yourself how great it is to live in Nowhererville, Mass.

93.

yeah...living in a beyond boring suburb of boston (yes, i have been there many times) seems so much more interesting than new york. especially in a tanked real estate market such as the boston metro (haha) area. i do find it interesting that you hate it here enough to be on curbed posting a comment.

stupid.

94.

The decline will be long and slow, but expect to see maybe only a 20% price drop over 10 years, but in real terms it will be more like a 50% price drop. I admit I'm a renter, but I, like others here am sitting on a pile of cash - however, prices make no sense when you look at what the same apartment could command in rent. Renting now and buying when prices come down makes a tremendous amount of sense. Don't forget that the reason people made so much $$ in real estate is because they use something called "leverage" - leverage is fantastic when prices go up, but is terrible when prices go down. The arguments of "well, I need a place to live for 5 years so I'm sure I'll at least break even" don't make sense unless prices actually go UP. If prices go down and you sell in 5 years, not only have you lost your entire down payment, but all the money you could have made on that down payment (and with the price of manhattan real estate you might have made a bundle on that $$ in the stock market or other investments.

People buying real estate right now really aren't thinking logically and I don't believe have run the numbers - it is all emotional "I'm afraid I'll be priced out forever" - look at rents to see what housing prices in NYC should actually be and you'll find real estate (by my calcualtion) is 100% overpriced today. If you need a place to live you can rent - you'll save a LOT more $$ in the long run. I'm just tired of these illogical arguments people make to buy "market in NYC is different!" "Wall Street bonuses save us!" "everyone in manhattan has money to burn" "prices can't go down!!" THINK PEOPLE THINK.

95.

We are going 100+ on this one... Exciting. I second the Somerville comment. You could have picked a better Boston neighborhood.

96.

To all the owners clinging on to your upward spiral scenarios. not all renters are bitter losers as you depict them to be (true most are, but not all). I just cashed out of my coop at a north of a 700% cash on cash return in just over two years (i.e. tax free). That money is now in international stock funds and commercial real estate. Point is, some rent purposefully. I see no point in buying a residential unit for myself in the short term. Part of the market correction is guys like me cashing out, part is cyclical. And svetlana, if you think 130,000 in W2 income a year is a lot of money, then you;re a stupid bitch.

97.

sorry to say it but professor...the only thing you are a professor of is stupidity in my opinion.

not one thing you said made a bit of sense.

98.

#90, tsk tsk. I said MORE than 130. That is not including bonuses.

Brendon, you are NOT as tough as you think you are. South Bronx, please, I am willing to bet my prada dress that you dont even live there.

Pimp, screw you. I don't know you and stop responding to my posts.

Hugs and Kisses!

The bitch is back and better than ever. Also, to all you curbed readers, don't be jealous of me. I'm just one of the lucky ones who saw where the real estate is headed and I got in at the right time.

Hugs and Kisses.........again!

99.

i wonder if people who buy property in other expensive cities...london, san francisco, tokyo, zurich, dubai, sydney have websites where people tell them they are stupid to want to own a home (albeit an expensive one) instead of pay thousands of dollars to landlords and by the time they reach retirement age are living back with their kids in des moines, iowa.

doubtful.

100.

For all the people saying prices will go up, up and up, please explain how the market will quickly absorb all of the new units coming on the market. Even if they are all bought up (which isn't happening), it means people are leaving their old place. This is part of what lead to the decline in prices in the late 80s, early 90s. There was another large building boom and it took the market another number of years to absorb it.

101.

do you read the news josh? new york city is expected to gain roughly 900,000 new people in the next 15 years.

that is how prices will continue to rise.

now if those predictions turn out to be false, i can see your point.

we have, however gained 200,000 new people in the last 5 years alone, so barring any major disasters, i would think we could expect this to continue.

it's a desirable place to live. and becoming more and moreso. it's quite simple, actually.

102.

in the 90's people were leaving the city faster than they were coming. this is no longer the case.

please people...these are not difficult things to wrap our heads around.

103.

Professor--what are you talking about? You must be an English professor or something, b/c your supposed calculations seem way off. The thought of a 50% price drop, barring some huge catastrophe, is laughably insanse.

Also, don't forget, if the value of your apartment goes down b/c of an overall decline in the RE market, and you are staying in the same market, it's not that big of a deal when you go to sell and buy a new place because everything is cheaper. Obviously, it's not ideal, but as long as you can afford the place in the first place, a 20% (unlikelu) drop isn't going to kill you.

104.

Svetlana you skanky russian whore, i make over 300K and I'm 32. And you know what? who gives a fuck? So shut the fuck up, go blow a hockey player and get your former soviet ass out of our face!

105.

50% in real terms over 10 years is not unrealistic (you must factor in inflation and time value of $$) - rents (as high as they seem) do not even come close to what they should be to justify the prices in this market. Use the below calculator and you'll see what I'm talking about. Prices won't fall 50% in one year, this is not realistic, but probably slowly over years or rents must increase 100% - if they did I'd say buy, but I highly doubt that they will.

http://www.housemath.us/

106.

how is a 50% decline realistic? what are you basing this on???

what market anywhere in the world do you know (except perhaps in sub-saharan africa) that you can cite have had prices decrease 50% over the course of time???

even iraq home prices have not declined this much.

you're are idiotic.

107.

cheap bastard- That was NOT necessary.

You are a bigot and should be banned from this forum. What does my ethnicity have to do with this topic.

I suggest that you get out of your rat-infested apartment because you are obviously sexually frustrated.

Oh so sad....and sad for the renters...

Hugs and Kisses!

108.

svetlana...please don't ruin what has been a really rather intelligent conversation for curbed with your rants and stupid comments.

you are absolutely the most assinine person on this board. ALWAYS.

109.

Professor are you saying that unregulated rents can't double in ten years? 5 years ago I moved into a 1br on the UWS for $1800 a month. I just moved out and the unit is now renting for $2750. I can guarantee that that unit will be over $3600 in five years.

Does this mean all rents will double in ten years no. But I have run the numbers and it makes more sense to buy than rent for me at least.

110.

Svetlana is my whore. Please leave her alone. Svetlana baby, remember we have an appointment in an hour. Don't be late this time.

Hugs and Kisses!

111.

svetlana Russia needs you!

112.

Please people stop responding to svetlana. She is a whore we all know that.

Next...

113.

i have been around the block a bit and i will tell you that if you buy in manhattan and the hamptons, you will do fine over a medium to long range period...world class city and world class beaches. other than that, it's all a crapshoot.

114.

i may get bashed for this, but i'm gonna have to add the prime areas of brooklyn to that list as well. i don't see brownstone brooklyn doing anything but holding its value through time.

they just don't build em like that anymore.

115.

may get bashed for this, but i'm gonna have to add the prime areas of brooklyn to that list as well

I agree--I'll agree--the better areas of Brooklyn are a pretty safe bet. Even downtown Brooklyn may be a good area to get into.

116.

a significant rise in rates combined with the end of tax abatements 10-15 years from now could put some siginificant downward pressure on recent new construction condos.

117.

we can't possibly predict what the market will be like in 10-15 years so it's kinda ridiculous to even talk about it now.

nothing we say or do could give us insight into the market that far out other than it's been the trend since the beginning of time that real estate prices have trended upwards...not downwards.

which is why so many of the negative comments on here are so dumb.

118.

true--i'm bigoted against dopey know nothing self obssessed skank twats like you. perhaps you're that russian broker who kept busting my balls to buy in the financial district. if so, you were obnoxious and not at all attractive. and which "rat-infested" apartment are you referring to? oh, the one I just sold for 1.1 + MM or the luxury unit I now rent in unnamed nabe in manhattan? And I'm liquid for several hundred thousand and i own commercial units on top of that--not even sure what my net worth is right now. So please do us all a favor--shut up--cuz you're not nearly as happening as you think you are, bitch.

119.

let's do a poll: all those renters sitting on a pile of cash, exactly how big is your pile of cash(don't be shy, this is an anonymous board) & what are you looking to buy?

120.

2.2 million in cash
1400 sq ft 5 room prewar uws

I'm renting one now for almost 1/2 the carrying costs it would be to own

121.

You can't find 1400 square feet for 2.2 mil? wo.

122.

#121
Thats not the point. I just signed a 3 year lease to rent one completley renovated for $3750
To own a similar apt would cost about $7,000 per month. After tax deductions $6,000.
When the spread in carrying costs narrows I'm a buyer.

123.

122 -

why are you getting such a small tax break? you should be getting much more than 1k/month on the 1st year of a 7k payment.

124.

and a 1400sf 5 room uws actually means 157th and st. nicholas.

ain't no 5 rooms on the uws for 3750. been living at 76th and columbus for 20 years and i know the hood quite well.

125.

listen people...this poll is stupid. if you really think someone is sitting on 2.2 million in cash and owns no property, you are fools. this newdaddy is an absolute loon if that's true. no beach house either? so you've been accumulating this 2.2 million for how many years????

and never decided to buy a thing???

puuuuhlease.

126.

i agree...unless you hit the lottery, it's taken you years and years to accumulate 2.2 million. in which case, you've been sitting on this money for a while, when you could have bought an entire townhouse on the upper west side in 1997 like my landlord did for 400K.

REALLY dumb.

127.

and btw, this said townhouse would now go for around 6 million.

so sitting on that 2.2 mil seems to be a bit of a false economy, no?

128.

A poster stated the following:
"flushing money down a toilet (aka renting)"

and I would like to clarify this misconception.

Money or investments demand a return. Cash - right now you can get 5%. Stock market long-run expectations are 10% per year. Real estate demands a return - real assets would be lower than equities and higher than cash. More in line with bonds. Long-term borrowing on real estate is 6%. Add in the equity component then which is more at risk than the debt component (your equity gets wiped out before the bank starts to lose money). So lets just come up with a blended 7%. You should expect that your real estate investments return, all-in, an average of 7% per year, plus or minus based on the risk of the real estate (e.g. if you own a strip mall and lease it to McDonalds franchisee, you have lower risk than leasing it to China Wok Restaurant and therefore can charge a lower rent).
So, put down $1MM per year on an apartment - if you do not achieve some appreciation on that apartment of $70K (say $50-$90), then you are in essence foregoing $70K of value by living there. The market is supported if the value of real estate goes up.
The renter, on the other hand, if he rents for $70K per year, has not tied up his $1MM on the apartment and is free to invest that $1MM elsewhere. So the renter spends $70K as does the owner.

129.

i don't think everyone looks at it like this.

i think for a lot of people, owning a home is something that gives them great satisfaction in life. it connects one more to their surroundings, which in effect increases the "value" of the neighborhood. i think oftentimes knowing that you own the home you live in and may even pass down to your children is more important than the monetary aspect for some. it is for me. if i make some cash in 5 years when i sell, that's an added benefit, but i guarantee (and you can judge for yourself from posters on here) that the real poll here would be too test the "happy" factor for renters and owners. i GUARANTEE owners are more happy overall. GUARANTEE it!

130.

#75 - In response, the $200k was an illustrative household income, and I was referring to a Manhattan 1BR condo. Let me walk you through a simple arithmetic example -

Assume a couple has an income of $200k, 15% of which ($30k) is bonus. Now assume that the couple contributes 10% to 401k, leaving $155k. After taxes approximately $90k or $7500/mo. Now assume that the couple has a blend of undergraduate or gradute student loan debt of say $1500/mo, leaving $6000/mo in after-tax salaried income.

An average 1BR condo, large enough for a couple say 750sf, at say a below average price psf of $1000 results in a price of $750,000. Mortgage payments at 6.25% interest, 90% LTV would be $4100/mo + say $1000/mo in taxes and common charges for $5100/mo or about $4000/mo assuming a 33% tax rate.

Not that the remaining $2000/mo would not be sufficient disposable income, but for a household to pay 60% in afer-tax/debt income is certainly on the edge of 'affordability'. A quick perusal of 1BR condo listings will show that there are very few at the $750k price range.

Manhattan (and prime Brooklyn) will either slowly be populated by $200k + households or prices will have to revert to more affordable levels..

---------------

if you are making 200K a year and can't find a suitable 1Bedroom, you cleary are not looking in the right place.

that's just a stupid thing to say.

like i said...i make 60K a year and just bought a 1bedroom a block from prospect park in prime historic park slope.

--------------------

131.

I've owned my business for 15 years, have always reinvested, the profits. never bought real estate Business has grown have had a couple of very good years latley, thus the 2.2 million sitting in my chase bank account earning when I last checked about 110k in intrest. It pays my rent, plus plenty left over.
Also I live in 100's riverside dr below 116 st.
and the $3750 per month is the real deal. market rate paid a broker 10k.
I'd rather have the cash available to invest in business opportunities, than sink in an apt., that could go up down or nowhere. Like I said in my initial post when the gap narrows between the cost the rent or own, I'm a Buyer.

132.

#130. you are an idiot. plain and simple. if you have looked at listings online you will find about 100 listings for 1 bedrooms in manhattan below 96th street for less and 750K in about 1 minutes worth of looking. you think just because you say something, people will believe it without checking.

you can get a very nice 1 bedroom on the upper west side for 500K. there's a 2bedroom for sale in my building in hells kitchen for 600K, in fact.

moron.

133.

-

I'm sitting on about $1.4M LIQUID. This includes $250K Cash, $220K Bonds, and $950K in Stock Index Funds. I have have low overhead and I save tons of money every month and add to my big pot of cash. I'm 37 and I'll buy RE when there's blood running in the street. I may even PAY CASH. I didn't get rich by being stupid. All markets are cyclical and all markets revert to the mean.

134.

You're all so full of shit it's funny. On an anonymous board, you can be anything you want. What a moronfest.

135.

there is a frenzy on this board.

136.

I love the people that bag on renters, and the renters that bag on owners. Two things are fact: noone knows what any financial market will do, and fundementals will previal. The historical return on real estate is less than 4.5%. Subtract inflation, and real estate looks like the shittiest investment known to man.

Btw...anyone not paying attention to the Chief economist at Fannie Mae should probably do a little reading. Looks bad....really bad.

137.

Bonuses baby, bonuses.

What did Verrazano say when he first sailed into NY Harbor?
Is Staten Island?

138.

FDIC insures up to $100K, who has $2.2M in a savings account? Do you have 30 accounts?

My stats:
$65K cash/no stocks

It's not that I choose not to buy, it's that I can't afford to buy. Sure, maybe a 1BR in the outer-boroughs, but I am looking for something bigger. I can easily rent a 2BR, but I can't even come close to buying one.

139.

I'm an owner and have definitely benefitted from owning - both in the financial sense and in some of the feel-good ways (greater feeling of stability, connection to the community, etc.) mentioned by others on the board.

That being said, I can definitely understand why some of my friends would prefer to continue to rent these days. Some of them have unstable jobs, or want the freedom to write a novel in their spare time etc. And some also have rent-stabilized apartments that provide an immense savings over owning. And yes, prices are higher, which definitely hurts first-time buyers the most.

Let's face it people, there's no universal right answer for the rent-own question. Some people should own, and some people should rent, and that doesn't make either of them stupid. Why is that so hard to understand?

140.

Like I said as the first poster in this old and tired discussion, yup there's a frenzy. I see it every Sunday at open houses. There's blood in those co-op and condo lobbies from buyers.

Die hard renters keep rationalizing their situation and continue not owning anything. That's fine. Landlords, property owners and brokers need them. Period. All about supply and demand.

People will buy and people will continue to choose to rent. We all can't be on the same boat. Again, there are a million ways to skin a cat.

141.

God, this board is fucking pathetic. You're all a bunch of self-aggrandizing morons. I hope someone dirtybombs this idiotic city.

142.

Nice to see some voices of reason on here for a change. I think the pleasure of owning is just an intangible (much like the 'freedom' of renting is to others).

For me, I would never go back to renting unless I had to. I also think the idea that one invests the difference between renting and owning is a false one that few have the discipline to do. A mortgage for me is a good way to put away money that I might otherwise be tempted to spend -- and it probably acts that way for others, too.

I am sensitive enough to understand too that putting together a downpayment is not easy for many people. I've been blessed in my life to be able to do that, but not everyone has the means or career choice to do that.

143.

141 has got a point - if someone did do that then forget about ever living in your house again, it'll be un-liveable for years. And for whatever reason, NY is always on the top of the list of targets.

144.

FIRST-TIME BUYERS (don't be one yet)! DON'T LISTEN TO THE BULLS. THIS MARKET IS A "DEAD MAN WALKING". READ SOME HISTORY...

www.youdovoodoo.com/80sbubble.htm
www.stock-market-crash.net/

...THEN SAVE AND WAIT 'TIL ABOUT 2010. PRICES HAVE NOWHERE TO GO BUT DDDOOOWWWNNN. WHAT'S THE RUSH?

145.

Matt, I think your reasoning is a little off, although I do agree that renting is not "flushing money down the toilet", because you are basically paying all interest for your first five years.

I just bought a one bedroom on the UWS for $700,000. Even after taking into account the interest I could have earned on my down payment, if the apartment value keeps place with inflation, I'll have made out fine (because of leverage).