NYC real estate crash...the future is here... (buying, live)
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i bought my first investment co-op in 1987 ,closed 2 weeks before the stock market crash of 1987.... i paid 75,000, when the smoke cleared it was worth around 55,000.00
well here we are 21 years later ..its worth around 175,000... do you think i care at one point it hit 55,000? of course i dont.... i can tell you at 55,000 i was going to buy another as soon as we got to 45,000.00
I don't think that anyone who has two brain cells would believe an agent telling them at the moment to buy now, lest they be priced out of the market. That happened during the run to the peak, hence why they were sold areas that did not have an underlying value, foolishly believing the hype.
And, I never said that particular areas would not lose value; rather, they tend to plateau. They do not generally lose as much as the prevailing market because of the vulture buyers who come in when rates are lower and properties are reduced. When a correction hits, it is not as severe in the micromarket of higher demand when the right factors are in play. This can be specific areas, specific buildings, and even specific types of apartments, and one must know the lay of the land. Relying on real estate agent puffery to sell the "adjacent" or "similar" areas for the same cushioned level of decline is foolish, since that's not the case
NYC has a large proportion of renters who can buy, some of whom can do so for cash. It's a question as to whether or not they want to reside in the city for the longer term and the timing as to when to make a purchase that keeps many on the sidelines. Two things to remember when searching for a house is that there is always another house and prices never exclusively move in one direction.
Agreed. And nobody with two brain cells should listen to what halfoff is saying either.As you said,there are neighborhoods,blocks and buildings here and everywhere that haven't been touched by the bust and probably won't for all the reasons you have mentioned and more.
Or is your crystal ball telling you that the 200,000 house will be 35,000 then.
Good luck with your theories.
How many houses have you gotten for"halfoffpeak" so far ?
I never said that a 200K house will be up for sale for 35K. There were apts in NYC that went for 500K in 1999 and sold for $1,200,000 in 2007. What makes you think that the price won't go back to 600K? S&P went back to 1997 and we are in the worst postwar recession.
Halfoff peak is not possible now but indicates when it will be a reasonable time to buy. Rent (rents are going down too) and wait.
The first is what the realtors want you to believe: a house is unigue.
The second is what the buyers should realize: For each house there are dozen comparable ones available now or later (unless you are bloomberg )
First, I respectfully disagree. There are different conditions that make a particular type of property or area more desirable. It's not hype that comes into play with such factors.
Second, I am speaking in an emotional sense when stating that there is always another house. It's emotion that makes people jump thinking that it's the only house that will ever meet their needs and their hopes and dreams will be crushed if they do not buy right then. I thought that this was directed to a first time buyer as I believe that was referenced for whom such information is valued from an earlier post. First time buyers tend to be the most irrational and emotional.
Last edited by bmwguydc; 03-01-2009 at 03:03 PM..
Reason: typo
all i know is we went to contract over the last 3 weeks on our nyc co-ops and got within 10% of the peak on both of them......... yes they took a few months to sell where as they usually took days but the point is both still commanded top dollar even today.... 2 more left and if we can ever get the last 2 remaining tenants to take a lease buyout we are gone , off to be full time bums in pike county in PA.
First, I respectfully disagree. There are different conditions that make a particular type of property or area more desireable. It's not hype that comes into play with such factors.
Alright, but this "uniqueness" is already factored both in its prebubble and postbubble price which means that the correction will be the same even in these so-called unique properties.
However, let's not fool ourselves low to middle class properties are hardly unique (usually built on a specific architectural blueprint with a fixed number of rooms) even in the most exclusive nyc neighborhoods.
No one can have an horizon of 20 years, especially first time buyers. There is always a factor that makes folks move sooner. The average ownership period in US is 7 years.
So advising people to buy house now with highly inflated prices, based on your guess that the market will turn around in 20 years, is irresponsible. These people risk losing money.
big mis-understanding here, just because you move and trade one house for another house dosnt mean the clock on your cost of housing stops...
a renter pays rent and whether he moves or not it dosnt matter. his cost of housing for a lifetime still keeps adding up.
its no different for a homeowner, he has a house, it goes up, he sells the house, buys another ,for the purposes of housing costs its all 1 continious expense... add in taxes, renovattions, repairs maintaince ,etc and keep them going from house to house... thats your true cost of housing... when you sell the final house thats your true rate of appreciation....
dont confuse that with profit because odds are once you subtract out that life time of expenses , non reimbursed taxes and mortgage interest that number will still be a loss anyway....
Last edited by mathjak107; 03-01-2009 at 02:34 PM..
I never said that a 200K house will be up for sale for 35K. There were apts in NYC that went for 500K in 1999 and sold for $1,200,000 in 2007. What makes you think that the price won't go back to 600K? S&P went back to 1997 and we are in the worst postwar recession.
Halfoff peak is not possible now but indicates when it will be a reasonable time to buy. Rent (rents are going down too) and wait.
I don't pretend to know that it won't go back to 600,00 and I wouldn't gamble that it will.You are the only one who professes to know exactly where the market is headed.
I do know that we now have historically low interest rates and the prices are for the most part considerably lower already.You talk about how easy it is to refinance at a lower rate if you wind up making a mistake at a higher rate. Refinancing is expensive and adds to your costs.
Sorry ,but I would rather own my own home now,get the fixed low interest rate,start getting the tax benefits of ownership,including the 15,000 tax credit for buying in 2009 and start paying off my mortgage.
Something tells me that when this is all over you will still be renting because you have spent too much time looking at and trying to analyze charts and then project into the future.
Alright, but this "uniqueness" is already factored both in its prebubble and postbubble price which means that the correction will be the same even in these so-called unique properties.
However, let's not fool ourselves low to middle class properties are hardly unique (usually built on a specific architectural blueprint with a fixed number of rooms) even in the most exclusive nyc neighborhoods.
Low to middle class properties in exclusive neighborhoods?
The raw plan of an apartment can be similar, but execution vastly different. Interior finishings and views are two main factors that come into play with regard to value differences.
its typically those that sit on the fence and put off acting because they are afraid the price may go lower that end up being the group that never do well financially.... its sooooo true morningstar actually tracks the small investor and shows how they put off buying when they should buy and buy when they shouldnt be after the big moves.
im a terrible market timer, probley one of the worst... soooooo i never try to out guess the markets... if i went to do a deal or make an investment i look at everything known right up to the minute about what im buying and make the offer..... none of this what if it drops, what if this or that.... i just do it...i get the best deal i can and i do it
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