Done with being an owner

"stress and headaches of being in a coop"

Please elaborate.

What's so stressful and headache-y about being in a co-op that a rental would alleviate?

And what makes you think that rents don't go up?

Matt - I know you live in a coop which is well run (I remember your post about how your board handles maintenance increases and wish my bldg was like that). Mine is not, in my opinion. Broken promises for years about amenities that never come, corrupt super, overstaffing, HUGE maintenance increases [over the past 2.5 yrs, my maint has gone up approx $400 not including assessments which come here and there]. I know rents can and do and probably will go up, but for my situation...renting makes more sense.

"Broken promises for years about amenities that never come, corrupt super, overstaffing ..."

And you think this doesn't happen in rental buildings?

If it's not there when you move in, don't bet on it ever being there. In the eyes of the law, you purchased and moved in, there's not much else that can be done. Don't boycott being an owner, boycott buildings where the features promised are not present before closing.

I just don't get what "headaches" come with being an owner. When you rent, your apartment is just not your own -- ever. You need permission to do any and every little fixup and improvement -- even just to paint a wall a different color. And frankly, you never want to spend too much time or money on the apartment, since it's not really YOURS in the first place, and who knows how long you'll be there.

It's that lack of *permanence* with living in a rental that I could no longer stand.

When I moved into my co-op, I finally felt like I was in MY home. MY rooms. MY floors. MY kitchen cabinets and appliances. MY windows.

Where was I going to be next year? HERE, of course. The year after that? Same place -- in MY home! Who decides if and when I decide to move? ME! Not a landlord who may or may not decide to renew my lease.

I can certainly understand the advantages of renting versus owning -- but "fewer headaches" is certainly not one of them.

"When you rent, your apartment is just not your own -- ever. You need permission to do any and every little fixup and improvement"

The exact same is true for co-ops. Unless you own a condo or a brownstone, you own squat.

"The exact same is true for co-ops. Unless you own a condo or a brownstone, you own squat."

Completely untrue.

can i ask how big in sq ft your coop is and what your maintenance is?

I'm paying 81 cents per square foot for maintenance.

wow...matt thats great....VERY CHEAP...where do you live....but my question was more directed to the topic poster...

NYCMatthew is correct, but technologic I wish you luck. Renting isn't a long term solution but surely it can be a short-term solution in various situations including getting out of the one you describe. Owners should be playing a bigger role in their residences and it sounds as if your cooperative apartment building might not allow for that. So good luck finding the rental before you find the right place to live in permanently with your family.

Techno I agree with you at the moment. A rental in a great condo building is great. Low rents no dealing with rising cc and taxes. It's all part of your rent charge. As far as what Matt said about painting walls and fix ups it's not true. I've lived in rental for about 6 years in the city while always investing my money and Doug better than any apartment could have done or me even with the crash of 08. I have always painted and made slight improvements for my comfort. But as long as you leave the way you came in there will never be any issues at least I've never had any. Liing in a coop is similar that you own stock but also responsible for the entire building if it's run poorly. Obviously matts is run
quite well and he's happy. But go on and rent and enjoy!!!

Matt lives way up town ------- Santo Domingo Norte. No place to eat up there.

oh ok....well that does explain it...

Matt - as a renter, if i have a problem with the water, or the window, or sink, or the heat, I have one number that I have to call and a guy is sent up to fix it that day. I only have one bill to pay each month for rent. No coop board meetings, no (direct) building maintence issues, no hassles. If there are bed bugs in the building, I don't have to worry about my resale value and can move out if the landlord doesn't take care of it.

Importantly, I don't have to hope that a greater fool has disregarded caps rates to buy my place if I ever needed to move.

Clearly you value that ability to "customize" your place and that is fine. But believe it or not, there are plenty of people out there who can get by with minimal customization and don't get "headaches" because of an inability to install a jacuzzi in their second room.

I rent and trust me, there are fewer headaches than there would be if I were an owner. To me, owning would have to come at a discount to renting instead of the other way around. The liquidity risk alone in my mind would suggest owning would have to be considerably cheaper than renting to actually make it worthwhile (since "customization" has essentially no value for me). I know this is not the norm given the powerful NAR lobby, but there are some alternate views out there (without the level of representation of owners for sure)

Grass is always greener. As a former renter I hated not being told my rent increase until two weeks before the contract was up. While Condos and Coop fees can and do go up they do not represent someones profit calculation. Maybe you just owned in the wrong building.

Owning will always be worth more because one owns an asset (one that actually can, and usually does appreciate depending upon one's timing and luck of course). Condo, coop or otherwise...majority of owners can vouch

location matters...

I agree that location matters. People like living in NYC (even up in Santo Domingo Norte). Yes, the grass is frequently greener. And let's not forget that it's not over til the fat lady sings ..........

"Matt - as a renter, if i have a problem with the water, or the window, or sink, or the heat, I have one number that I have to call and a guy is sent up to fix it that day."

Me too -- the super.

*****

"I only have one bill to pay each month for rent."

Me too.

*****

"No coop board meetings"

No one is forcing anyone to attend co-op board meetings.

*****

"no (direct) building maintence issues"

What does this mean?

*****

"no hassles"

Again, what kind of "hassles" that you wouldn't encounter in a rental?

technologic ---- I hear ya. I owned a coop --- i sold it because the board and management were HORRIBLE! Luckily, I sold before the crash. Now I own a condo ----- it's OK, but to tell you the truth, I'm sorry I bought it! I'm sorry I didn't just rent!!
So I'm with you. And I'd sell the condo in a heartbeat if there were buyers ......

Lecker ---- thank you, too. I am in the process of renting out my condo! And I'm gonna find a rental for myself!! Then I'll have the best scenario! And so will the person I rent my condo to!

If you can afford to just rent out rather than sell, godspeed...this scenario supports ownership prices at current levels (less selling) and just lowers rental rates (more rentals)

So you own and rent out your place and then in turn rent out another place? How is that normal or ideal?

Matt - it sounds like I have misperceptions about the hassles of owning - thanks for the clarifications.

Now, do you have any insights to the other items I listed which you have not yet responded to?

Let me renumerate the items that I would still like to hear how owning is better than renting

If there are bed bugs in the building, I don't have to worry about my resale value and can move out if the landlord doesn't take care of it. - or is this a headache for an owner?

Importantly, I don't have to hope that a greater fool has disregarded caps rates to buy my place if I ever needed to move. - or is this a headache for an owner?

The liquidity risk alone in my mind would suggest owning would have to be considerably cheaper than renting to actually make it worthwhile - could not possibly be a headache for an owner now could it?

Normal? Ideal? DaBulls --- you're autistic or something ----- what's that high-level autistic called? That must be you. Searching out the "normal." Seeking the "ideal."
Something things are slightly complicated, slightly messy. Not major, major. But sometimes things aren't all ship-shape, DaBulls!!!! Sometimes things are nicely chaotic!!!!!

"If there are bed bugs in the building, I don't have to worry about my resale value and can move out if the landlord doesn't take care of it. - or is this a headache for an owner?"

If you lived in a co-op, the owner WOULD take care of it -- because you're ALL "the owner" of the building. And bedbugs obviously don't discriminate between rental buildings and co-ops.

*****

"Importantly, I don't have to hope that a greater fool has disregarded caps rates to buy my place if I ever needed to move. - or is this a headache for an owner?"

In a normal market (like when banks aren't imploding and we're not in a Great Depression), with 20% or greater equity in your home, extricating yourself from your co-op is not that much more difficult than extricating yourself from a rental lease.

*****

"The liquidity risk alone in my mind would suggest owning would have to be considerably cheaper than renting to actually make it worthwhile - could not possibly be a headache for an owner now could it?"

I have no idea what you're saying here. Please clarify.

Matt - liquidity risk in my mind is being able to convert an asset to cash. So if you were fired from your job and had to move to get another one (regardless of the price to rent ratio out of whack which is more a NYC thing), it may take months to convert the value of your home into cash and only after administrative hassle if the buyer has to pass a board and transaction costs etc. I am calling this the risk associated with an illiquid asset.

I think the bulk of my points are to stress the advantages of being unencumbered by a huge liability and the bulk of your points are stressing the advantages of having a huge asset. Tomato / toma(h)to.

You seem to view owning very favorably and at the end of the day, I guess I can't blame you for that. It is a theme that I remember myself growing up with and to be honest, it wasn't until I moved out of the USA for a period of years where I realized that although it was the "american dream" to own a home, it is not say, the "German dream," to own a home (they are sensible to a fault!). You may disagree with me, but I now see this fetish with homeownership in this country as a cultural thing. Propaganda if you will. Who says the only american culture we export is blue jeans and walkmans (sorry for dating myself) - we will have other countries wanting to buy homes too, just like us - damn the consequences!

Still, there is almost "hostility" on these threads to renters like they fail to have purpose until they own someplace. On other threads, you yourself could empathize with homeowners losing their homes upon losing their job but were noticably silent when confronted with renters who lost their shelter under similar circumstances. It is this depiction of renters as second class citizen that I take umbrage at. It is an ugly elitism which I posit is based on pure propaganda.

Matt question how many applicants has your board turned down in the last 2-3 years?? It applies to the liquidity of your asset.

liquidity risk? any property will always be considered an illiquid asset

BUT

ny real estate is still considered one of the most in demand making it more transferrable, i.e. liquid

just don't buy in NJ

But coop's risk of liquidity is generally much higher than a condo or a renter with money in the market or bank.

"The exact same is true for co-ops. Unless you own a condo or a brownstone, you own squat."

Completely untrue.

-----

How so? In a co-op, you own SHARES, not the actual apt. And in a co-op, you usually have to get board approval to do major work. In a single family house, you can usually do any interior work you want without any approval. Plus co-ops have other restrictions, like no pets, no washer/dryer, 80% carpet, etc. In a house, none of these rules exist.

what's wrong with owning shares - if they're valuable?

you can own property in my favorite place, NJ and it ain't worth diddley

as for board approval...this is just a more formalized form of what anyone who lives in a community experiences...you think people in the burbs put up a fence that wouldn't be approved by their neighbors?

In a typical community, you DO NOT need approval to renovate a kitchen or any other part of your interior. If you want to bang nails loudly at 2 in the morning, you can.

>>If you want to bang nails loudly at 2 in the morning, you can.

but that's just inconsiderate

For the poster who asked about my maintenance - my apt is about 750sq ft, and my maintenance is currently almost $900 per month. And the bldg has NO amenities: we have coin laundry in the basement and a bike room, but no gym/pool/roof deck or any of those type extras.

I agree that it seems bizarre that people automatically assume owning is better. Many times I have friends say I am so lucky to own (I am pretty young so none of my friends own) and I say its funny because they are so lucky to rent! They say they are pissing away money and getting nothing back, and I say look at all the mortgage payments I've made that have similarly given me nothing back due to the fact that the market has dropped so much. It only works if the timing is right....and post-Lehman timing is not on owners sides.

I am almost 100% that we are going to sublet our current place and then move into a rental. By my calculations, I will have about $400 carry that will not be covered by the rental price that I'm thinking we could realistically get. worst case scenario I have to dip into savings at some point. But if the market stays as it is though then holding off on selling is the only thing that makes financial sense. Luckily, my coop does have the redeeming feature on pretty relaxed subletting rules so if I have to sublet a decade in order to break even, I will.

It's not inconsiderate if your in a detached house and don't share a common wall with a neighbor. But should co-ops really be able to have a say in your kitchen renovation? Why is a 25 pound dog acceptable in some buildings but a 35 pound one is not? If boards don't think that small dogs can be vicious, then they are not living in reality.

Why are you palnning to sublease and then rent? I don't see any benefit to it. And you usually can only sublease for 2 years. After that, no more tenants.

walls in homes are pretty thin so it's still inconsiderate - wouldn't like to hear that 2AM (1 AM, sure)

a board's say in kitchen renovation? why yes...wouldn't want to move a pipe i shouldn't - could cause building to be, say, less structurally sound

now THAT would be inconsiderate

"Matt - liquidity risk in my mind is being able to convert an asset to cash. So if you were fired from your job and had to move to get another one (regardless of the price to rent ratio out of whack which is more a NYC thing), it may take months to convert the value of your home into cash and only after administrative hassle if the buyer has to pass a board and transaction costs etc. I am calling this the risk associated with an illiquid asset."

Assuming your monthly outlay for rent is comparable to your monthly outlay for your mortgage/maintenance, there IS no "asset" for the renter to convert to cash -- the entirety of his monthly outlay has gone into someone ELSE'S pocket. In this case, the owner is way ahead of the renter.

This notion that renters are saving all this money by not buying and investing the difference in more lucrative vehicles is a canard; human nature being what it is, most people generally will spend the maximum they can afford on housing, whether in the form of a combined mortgage and maintenance or rent. There is no "asset" left over for the renter when he vacates. And while it may be complex to liquidate the co-op -- it's more of an asset than most renters have when they move out (which is usually just a stack of cancelled rent checks).

*****

"Matt question how many applicants has your board turned down in the last 2-3 years?? It applies to the liquidity of your asset."

Quite a few. However, the sellers DID eventually find more appropriate buyers who were approved. Yes, it speaks to the liquidity of the asset -- an asset the RENTER generally does not have.

*****

"In a co-op, you own SHARES, not the actual apt."

We're comparing co-ops with rentals here.

In a co-op, you own shares AND the proprietary lease to your apartment. A lease that is yours, and will always be yours, unless you do something so egregiously wrong that the co-op board evicts you (an action that no doubt would also get you booted out of your rental -- much quicker and easier, I might add, than the co-op board evicting a shareholder).

*****

"And in a co-op, you usually have to get board approval to do major work. In a single family house, you can usually do any interior work you want without any approval. Plus co-ops have other restrictions, like no pets, no washer/dryer, 80% carpet, etc. In a house, none of these rules exist."

Again, we're comparing co-ops with RENTALS -- in which case you'd generally be allowed to do NO major work, and even minor work would require the landlord's permission. And rentals have the same types of restrictions as co-ops on pets, washer/dryer, carpeting, etc.

*****

"I say look at all the mortgage payments I've made that have similarly given me nothing back due to the fact that the market has dropped so much."

Wrong.

In the end, regardless of how much your apartment has dropped in value, after you've paid it off, you OWN it outright.

In the end, renters will own NOTHING.

Less than $900/month maintenance for a 750 s.f. apartment seems cheap to me, even for a no-amenity building. What neighborhood? We saw plenty of no-amenity one-bedrooms that had maintenance in the $1,100 - $1,500 range and few with maintenance under $1,000. Many in that $1,100 - $1,500 range didn't even have the coin laundry or bike room that you have.

My guess is that your maintenance is probably not adequate to fund basic building expenditures, much less any additional amenities, hence the special assessments and "broken promises." Proper analysis of the building's financials during the contract process may have tipped you off to this. Your initial < $500 maintenance was, I bet, never realistic.

i agree....900 for 750 sq ft is DIRT CHEAP........unless you are living in the outer areas of manhattan....where do you live? ...your mtce is 1.2 per sq ft....thats unheard of these days in manhattan

Also, what did you pay per sq ft for your apt?
I just paid 680 per sq ft for an apt on park in murray hill but mtce is 1.75 per sq ft.....so there is a tradeoff sometimes...i got a good deal on the apt but mtce is high....i was willing to live with that at this point becuase i liked the apt,location, etc.....

Matt - if in the current environment renting is cheaper than owning (various other threads on this), then it is false to say renters will own NOTHING. With the money they saved not owning (and including the downpayment outlay that they avoided), they have a savings account or a gold brick or a stock certificate, etc instead of a house asset.

If it is cheaper to own than rent, then I would agree with you. However, this does not seem to be the current case (unless you can show otherwise)

I still think that now is a good time to enter into a two year rental lease, even though prices right now are a bit up from January, February, March.

Matt's mtce - why is it so low?

Coupla factors:
1) Level of service - apples to apples, oranges to oranges. Even if it is 110% effectively run, a full-service bldg (elevator operator, doorman + porter, etc. all belonging to union) will cost much more than a virtual concierged bldg.
2) Taxes, taxes, taxes - by and large (notable exceptions inc. Chelsea Merc), large apt buildings so. of 96th pay more in taxes/sq ft than bldgs no. of 96th out of proportion to price/sqft. I've noticed that bldgs up-uptown have MUCH lower taxes.
3) Bldg mtge - a few bldgs converted in the last co-op conversion heyday were saddled with large mtges by sponsors who were trying to maximize every last $ of return. If the bldg was "lucky" (with hindsight), the sponsors went bankrupt and in some cases, the co-op won control of commercial space and/or had the bldg's mtge principal reduced.

S. of 96th, other notably low-mtce bldgs include some loft conversions in Soho and Tribeca. By some quirk of NYC Property Dept, they have extremely low taxes (usually small loft bldgs) and/or commercial space that belongs to the co-op.

Ah, and self-management, which is not feasible for large bldgs.

"Matt - if in the current environment renting is cheaper than owning (various other threads on this), then it is false to say renters will own NOTHING. With the money they saved not owning (and including the downpayment outlay that they avoided), they have a savings account or a gold brick or a stock certificate, etc instead of a house asset."

"With the money saved not owning" -- that's a HUGE assumption that goes against human nature.

If someone could afford a $3,000 monthly outlay for housing, he or she is most likely going to buy the maximum amount of apartment they can afford, wither in the form of $2,000 for mortgage and $1000 for maintenance on a co-op, or $3,000 for a rental.

There almost never will be "money they saved renting".

"Matt's mtce - why is it so low?"

We're an extremely well-run building.

Matt - I don't understand your comment that money saved not owning is a "HUGE assumption that goes against human nature".

What are you disagreeing with? that it is currently cheaper to rent than own? If you are referencing human nature, perhaps you imply that renters can't save without a forced save mechanism via principle payments in a mortgage?

Personally, I have no trouble saving money with the low shelter costs I incur. If I were servicing a mortgage on the cost of what this apratment would sell for in NYC bizarro valuations, I would be lucky to be socking anything away via savings. Instead, I would be praying that there is a bigger fool to pay me more for the arpartment than I would have to buy it for now. And I would be praying that I did not lose my job - in this case that house asset would be quickly overshadowed by the mortgage liability!

So to demonstrate that your generalization is not etched in stone (There almost never will be "moeny saved renting"), I have SUBSTANTIAL money saved by renting. Additionally, I have a SUBSTANTIAL downpayment if owning ever becomes cheaper than renting, and I have no "headaches" if government support proves to be unable to stop the drop in housing prices, and I have no "headaches" regarding foreclosure if I lose by job (can move to a new job with much fewer hassles than if I were chained to an underwater property).

Until rents are larger than the costs of owning, your economic arguments don't make sense. Either you have to really attach a high value to the customization of your property or you have to bank on a buyer paying more than you did whenever you try to sell for it make sense in the current environment to buy a place. Full stop. Honestly, I don't know how you can take issue with this premise. This "ownership" issue is an entire red herring that is heard so often, people believe it to be true. Yourself included.

"We're an extremely well-run building."

Does the elevator always work?

Don't care to address the other factors, do you? 'Kay.

But you knew he wouldn't. As you said, the factors that really matter are taxes, mortgage, and labor. Scrimping on the other stuff doesn't get you far. Sort of like U.S. government spending.

Human nature being what it is, you're going to spend your full $3,000 monthly housing allotment, whether it's on a combined mortgage/maintenance or on rent.

There will be no money "left over" for saving.

Matt - you are confusing "human nature" for "personal choice".

There are numerous examples of people who live below their means. Just because you don't know any doesn't mean they don't exist.

I mean, who else is going to pay for the mistakes of the people that you seem to know who took out the biggest mortgage possible because it was at the top end of their budget?

Or who just had to have the bling of Formica countertops instead of just plain plywood.

Matt, does the elevator always work in your building?

lecker- no one here has shown that renting is cheaper than owning. The threads with the arguments on this are viewed differently by everyone.

NYCMatt has been spot on in his comments.

LICC, wow. i could show you hundreds of examples of owning being less advantageous at this point in time. obviously things can change, but there's no real sign of that yet.

matt, i spend well less than half of my generally accepted housing budget, including the place upstate. wrong, wrong, wrong.

Renting is cheaper than owning.

The pccb are leeching into your brain in lic, licc. From Fu, mr Fu from shanghai.

aboutready, you have tried to show these examples. You have failed. That happens often with you, but at least you keep trying.

you crack me up licc.

so, big boy, show me some examples where owning is better. where after tax you spend 30% less than renting. good luck. oh, and i'd like them to be in manhattan, thanks.

Manhattan, AKA New York ... New York County.

"renting is cheaper than owning" All I can say is that I am really glad I didn't think that way over twenty years ago when you could have truthfully made the same statement. Making a long term commitment has paid off not only in terms of building equity, but also in terms of month to month cash savings verses the current cost of renting like property.

And yes, I had seven years of losses on investment initially

that was then. this is now. I bought in 1995 and I certainly couldn't have replicated that performance anytime since. that certainly doesn't mean past history will repeat. I think there are a number of factors which will weigh on prices for years. including all those cleared and ready to build lots around town and the vacant corners just waiting to be demolished.

just think of the economics of previously bought expensive land that likely involved some sort of loan. good times ahead.

ar, you bought in 95? I thought you also bought this decade? My feeling is that buying and selling is costly. If you have bought twice in NYC, that should be enough for 20 years of living, if not a lifetime. And here you have rented for how many years?

pmg I bought in 1995 and sold and bought in 2000. like many people I wasn't able to buy my "forever" apartment early on. I think manhattan the last twelve or so years has been such that very very few people (families at least) have been buying their forever apartments with their first purchase. P

I also bought in 1991 in Seattle. Luckiest thing I ever did. 3.5 percent down. FHA loan.

btw even with transaction costs I've made quite a lot percentage wise. but yes I've now rented for six years and I'd consider that smart if all the variables are considered.

FHA is quite the deal. Good for you, and good timing too. For me, its been 2 homes in 21 years, and I may be in my "forever" home if I remain single.

matt...where is your bldg?

Matt lives in Wash. Hts. There are many coop bldgs there --- totally no frills, solidly middle class (to lower middle class). It's a niche market. You've gotta be willing to spend lots of time on the subway to get to amenities (restaurants, etc.). Yes, he lives in Manhattan --- upstate Manhattan.

yes....i find very few apts in central manhattan with mtce lower than 1.25 per sq ft...i think 1.5 seems more standard these days......i dont like mtce charges in manhattan but its part of the deal of living here......i often wonder what mtce ration will be like in 10 yrs...will it be 4x sq footage? Dont most buildings increase mtce aabout 3 or 4 percent per year?

ar, you don't get to define the terms outside of reality. inonada and I just went through this on another thread about a week ago.

Actually being a renter sucks. You potentially have to pack your bags at the end of each lease, are the subject of unreasonable rental increases with minimal time to negotiate and must agree to show the apartment if the unit is being sold, let alone less rights compared to the true owner.

licc the results depend on individual circumstances and options. for the VAST majority of NYC residents renting beats owning.

rs you are such a tool. do you realize that in manhattan there are only about 12500 new leases signed yearly? how many people rent? do the math if you are so able.

Still sucks

Owning also sucks. Coop boards? Puhleeze ............

ar, in 1998 I traded down. My gain on a nine year hold paid my deposit on my downsized apt and then some. Can you say cash back? The market really started to heat up in 1995. Two renters I know bought separate homes then in the west village. Years later as their needs expanded, each bought the small apartments next to theirs and they both expanded. They remain in their homes, and I am sure they have saved a small fortune compared to renting, not to mention they are in better quality buildings. ar, maybe you haven't been so lucky in real estate. Can you say opportunity cost?

Okay - anecdotal - if you'd bought in 2004:

We refinanced existing mortgage in 2004, and just refinanced existing mortgage again to take advantage of lower rate. New appraisal came in at 70# higher than the 2004. (es, I know, can't imagine what it MIGHT HAVE BEEN in 2007-08, but, this is our forever apartment).

In real estate, as in everything else, timing is key. IMHO if you purchased prior to 2006, with NORMAL down payment of 20% - will probably come out okay (and maybe make some $$) . 2007 and after - hard times.

ar, for you to make such definitive statements is just ridiculous. Your claim that renting is better for a vast majority of NYC residents is just juvenile nonsense.

Most owners here identify that there are advantages and disadvantages to both options, but believe that the advantages of ownership outweigh the disadvantages, particularly when costs are comparable. Renters seem to have to get overly defensive all the time and come up with very stretched arguments as to why, in their opinion, renting is so superior to owning that people are stupid not to rent. The stupidity of that argument shows.

LICC, I think we agreed that if you found yourself a non-prime coop on a low floor in the a less-than-ideal area, you could do 20x. Assuming the world still continued to believe in current valuation levels and Fed policy continued to support -2.5% real interest rates going forward throughout the decade, with continued belief in such going forward, then yeah you get to make a paltry 6.5% on equity, barely beating out the debt holders.

As soon as you put in 25x, which is the story for prime apts, or real interest rates that are actually positive or even simply zero, or a return to traditional return-on-equity to compensate for risk & illiquidity, you're screwed.

Not that I have any interest in convincing you otherwise, though. I'm all for a continuation of the status quo for the next 10 years to get us out of this mess. If prices drop another 20-30% tomorrow, you'll walk since you'll be in deep negative equity. However, so long as they're flat, you'll keep paying, which means I (through my tax dollars) won't have to.

nada, we agreed that you have different views than I. You look at things like Fed policy in a vacuum, and you really can't do that. And we all agree that if you think prices are going to drop substantially, you would be better off not buying, regardless of the price to rent ratio.

You would be better off not buying.

not buying does not mean sell. that may have been AR's mistake since she got started in 1995, over ten years before the market topped.

pmg, my purchase in 1995 was a widow's sale, distress. 2 bedrooms for %105k. i've done fine, actually.

This discussion continues to be silly. If you are in an area for longer than a year or two, and are able to afford more than a starter apartment, owning beats renting economically and for your family. Some like to point out short term interest rates and short term Federal Reserve policies as evidence against a long-term asset, and that is investing mistake number one. Others, particularly like aboutready, like to point out that renting beats owning despite currently owning a place while renting, and formerly owning her primary residence, which leads to an odd conclusion that can hardly be supported except for posting repeatedly and loudly. Real estate is not a game to jump in and out of and cite short-term gains to show your intelligence and then scorn people who made gains since you did as being fools - the only way that makes sense is for some deeply personal self-interested and bitter reasons.

Seek to enjoy your home.

"I've done fine" AR, Doing fine would be paying current mortgage rate's on a hypothetical $60k mortgage left on that 1995 purchase or a few hundred dollars a month in 2010. Doing fine would have been trading that apartment in a couple years, taking tax free gains, for your "forever" apartment if somehow that 2 bedroom was not appropriate for you or your family. I don't think you understand what "fine" is. My point is you had the opportunity to get in to NYC real estate at very decent valuation. You were here and you even acted. But now you've been a renter for years. I don't know. Paying a few hundred dollars a month plus maintenance sounds like a better deal than anything you could get in StyTown, unless that ugly project is your "forever" "dream" "rental" home. It's just expensive compared to what you had. Staying invested, even if you have to trade once or twice, seems like the preferable game plan to me.

AR, I don't mean to bust your chops. I regret selling an UWS 2 bed 2 bath duplex condo with fireplace that I could have managed to hold long term as a rental. I was happy to take a $135k gain because I had negative equity for so long. That gain would have compounded very nicely had I followed someone's recommendation at the time to hang on to it.

"Owning also sucks. Coop boards? Puhleeze ............"

And co-op boards are worse than landlords ... how?

co-op boards speak with many mouths

why lump all condos or coops or boards in the same bucket? Some buildings are well run , some are not.

And yet again, in all of these "renting is better than buying" arguments, the proponents are conveniently forgetting the mortgage tax deduction, which knocks HUNDREDS of dollars off of your real monthly housing outlay.

No, we aren't, Matt.

"co-op boards speak with many mouths"

Setting the record straight here -- as both an owner and the vice president of a co-op board myself.

Unless you are doing something that's damaging to the building or disturbing to your neighbors, you will NEVER have an issue with the co-op board.

And I guarantee that if you ARE doing something that is damaging to the building and/or disturbing to your neighbors, you'll have problems with both co-op boards AND landlords.

"No, we aren't, Matt."

Yes you are.

The proponents of renting are looking at their analysis through a rear view mirror. They base their cost expectations on the drop in rents that have occurred and do not adequately price in the risk of increasing rents. On a five year projected outlook seems to be the risk of an acceleration in rent increases is very real. The job outlook picture in NYC has improved and there has you have a market shift in favor of renting vs buying. More people renting should favor increasing rents. Right now we're probably at a pivot point where rents were declining, so looking at past 12 , 24 months of rent rates could easily cause one to draw the wrong conclusion. Building occupancy rates are improving, just something to think about over the next 12 -24 months.

If you own in a Condo or Coop, you know your common charge reflects costs and not profit. Further if you own in a well-run bulding you know you have goods and services purchased on your behalf at competitive rates and a board who looks to save money.

"Yes you are."

No, we aren't, Matt.