Am I Insane?

Rent until the smoke clears... better to lose $4k a month than to run the risk of losing a lot more given the current situation and how quickly things are all unraveling. Don't get caught catching a falling knife.

move to edgewater and commute

If it's a condo and you can rent the place out you should definitely buy, will be a good investment. But if your time horizon is less than 5 years it may be wise to rent for now.

rent

If it's only 2 or 3 years why would you want to buy. Who knows though in some quicky ironic way this current situation may actually have a positive impact on the Manhattan market.

We just bought a much more expensive place in an entirely different Manhattan location, but it's one that was our dream joint and I don't ever plan to move again, so I don't care.

But if I were looking at a time horizon of five years or less, certainly I would most definitely consider renting as opposed to buying right now.

In your specific situation as you've described it, I would ABSOLUTELY POSITIVELY rent.

We bought a 2BR condo on the upper, upper west side a year ago and did so only bc we think we would own it for 5 years or more (either living there or keeping it to rent). If we knew for sure we would only own it for 2 years, we would have rented. Of course, try and figure out if you really will likely move, because renting for 5 years is a lot different than renting for 2 or 3 in my view. Also, $700K in central Harlem does not sound like a super low price, so that is important to consider if you need to sell in only 2 years. Good luck.

rent - prices will fall 50% or more before this is all over and in Harlem you'll get burned more than you will in prime Manhattan. Assuming prices actually stay the same, or even go up (which is EXTREMELY unlikely) the transaction costs alone will eat up any profit you might have over renting if you only own for two years.

anon3:

Really? - 50%? - or MORE?!?

Gee, I don't think so. Particularly not in prime Manhattan neighborhoods (Fifth UES, CPW, Village, lower Fifth, etc.). On the other hand, I would agree that purchases in less than prime areas that are considered slightly 'edgy' (or whatever the right term would be) such as Harlem, could indeed get hit very, very hard.

Having lived through the late 1980's/early 1990's 'correction' in Manhattan residential real estate, I can tell you that a 50% correction ain't happening in prime neighborhoods. A 10%, or 20% correction (if at all) is a definite likelyhood, however. If a 50% correction is what you're waiting for before you jump into make a purchase a condo/coop in that kind of prime location, you'll be renting - for the rest of your natural life.

I don't think it is crazy considering price were going up at almost 100%/yr. Prices right now are crazy, and the bankers are driving these prices. You're right though that we likely won't see a 50% drop in actual price, but this will go on long enough that even if prices stay the same the real effect (pricing in inflation) will probably be about 50% IMHO.

Anon3 if prices drop 50% than rents will drop considerably as well. I hope your right though because I'm dying to get my hands on a true 2 BR in the west village with a wrap around terrace with gorgeous views and a doorman for around 750,000. I'll keep dreaming and maybe both of our dreams will come true. You are right prices now are crazy and they were crazy last year the year before last and the year before that as well. Thinking about it some more they were crazy back in the 90s, 80s,70s and 60's as well. Well at least that's what everyone was saying. Oh how history repeats itself. It's Deja vu (all over again).

Be safe, rent, and don't get caught in the middle of the liquidity and insolvency cross-fire happening right now before our eyes.

Bid Low, Bid Low, Bid Low......

REPEAT

Bid Low, Bid Low, Bid Low......

johnnynd:

*close to purchase, equals what?

*committed to a pre-school, means what?

*not being mean; I have raised 3 children in NYC; last one a senior in HS.

*what advice are you asking? I have never regretted, for a minute staying in NYC (altho I have my issues)

*what is it you need to know?

Buy the place, it'll make you happy...it's stormy out there but the sky will not fall....and the thunder you hear is the sound of everyone following the pack leader. Just make sure you like the place, move forward and live your life.

The market looks to correct but not more then 10-20%.
You have to think about how your investment will appreciate over time. If you are buying and you hold on to your aparment for the next 5-10 years you will not be throwing away money on rent....so even if your apartment "corrects" 5-10% you will have been gaining equity and if you are buying a $1,000,000 apartment and it corrects $50,000 (5%) you will have not thrown away $48,000 on a $4,000 a month rental. Forien investment will keep this market stong....it's always a good time to buy in NYC.

buy - by the way the developer should give you some incentive in this market, like closing costs?? There it is your 5% percent correction.
all these professors saying bid low, rent, sub prime, bla bla, are not considering that back in the nineties families would leave Manhattan as soon as the kids were 2years old. Now families want to stay in Manhattan for much longer and don't mind spending more on an apartment as long as they can spend more time with their spouses and kids.
Manhattan has become a really nice place for families. I have been here in NYC for 12 years and in my opinion quality of life in general is getting better year after year.
People used to run away from NYC. Not anymore.
The market is crazy? I thought the same thing when I bought my first apartment in 2002....six months after the tragic events of Sept.11. I can't tell how happy I am that I did not listen to the people that called me crazy back then.
I agree that there is going to be some correction, but when I hear 20%....i don't think so.
good luck to you.

Thanks for all the feedback, just pulled my bid. Even with a 5% "correction" I'd be off 8-9% with closing costs, and I can't see recouping that in my time window.

As for incentives, Corcoran offered none: we managed to get the price down 10k and that was that. No wonder all of there new Harlem developments are only 50-60% filled

congrats johnnyd - you made the right decision and saved yourself a lot of money and heartache.