Likelihood of Value Appreciation on resale in FiDi

Considering that transaction costs can easily add up to 15-20% of the price, you are asking whether expecting a 20% increase in the next 2 years is reasonable. I think you can answer the question yourself.

15-20% on a coop? do tell.

Don't buy a coop if there's a chance you'll be relocated and won't be able to rent it out, period. I wouldn't purchase in a condo unless I felt 98% certain that in the event of a job loss or relocation I'd be able to rent it out for enough to cover my mortgage and monthly costs - and most coops don't let you sublet at all.

...but, what about all that rent money that OP would be throwing down the drain? :)

gcondo, I'm making plenty of assumptions to come up with that amount: $600,000 coop, 20% dp, total costs to close should be around $20-25K. Selling costs will be higher with 6% for the broker's commission, about 50-60K. Total transaction costs: 75-80K or 12%.
Add a few months of mortgage/maintenance while you are waiting for the board to approve the sale after you've moved to a new city, 15% is a reasonable expectation for a middle of the road transaction.

50-60K at a 6% broker's fee implies selling at $833k - $1mm. 39-67% appreciation will certainly take the sting out of the transaction costs.

Responding to OP, my view is that FiDi is the most exposed market in Manhattan to a real collapse in prices. The overhang of unsold inventory from the 75 Walls and 20 Pines of the world (just to list a couple of examples) is massive. Not to mention a couple of new buildings coming on in BPC. Or 903 rental units in Beekman Tower. Or...

Sure FiDi has more services and general appeal as a residential neighborhood than it did 5, 10 or whatever years ago, but in the wake of the downturn I just think all that has been overwhelmed by new supply, both rental and sale. The mechanism to balance this out is good old supply and demand, where it has to get a lot cheaper to bring in the people to fill the space (a.k.a., reach equilibrium).

And then there are all the good and valid points above about transaction costs in the context of a short-term trade, (typical) inflexibility of a coop, etc.

Not sure I would characterize the overhang as "massive," Sideline. Yes, Liberty Green and Liberty Luxe will be coming online later this year, but considering how well 1 Rector is doing even at those inflated prices I think they will be absorbed just fine. I see no real upside, but rents are in fact going up as buyers sit on the sidelines, which doesn't exactly imply a big downside shift, either. 20 Pine has the problem of weird, dark, cavernous layouts, so there's some possible downside risk there, but I don't see it for the area as a whole.

Interesting comments on direction of rents, ev. I would say that I am surprised, but that would be a lie. Amazed is more like it.

I guess 'massive' is in the eye of the beholder. I look at 75 Wall - where by a quick count 112 of 346 units have closed in almost 2 years, including, notably, one in each of the last 3 months and five in the last six months - and wonder how there is any solution to that puzzle other than price. Or on the rental side, I look at Beekman Tower getting close and wonder how 903 units does not shift the market. To me, the amount of new inventory relative to the existing stock is a good measure of how supply will pressure prices, and I see more in FiDi (relative to what was already there) than I do elsewhere.

Check the just-released TREGNY data. With temporary walls now being outlawed, a lot of people are going to be looking for apartments; 903 apartments isn't a huge number in a reasonably desirable area of a city of 8 million people. Add 75 wall to my statement of troubled buildings; it and 20 Pine have some fairly unique problems. Actually, you can throw in 225 Rector as well. I just don't see how a few buildings with ongoing, acknowledged problems tank a market. Those buildings will likely suffer price declines, of course. But we've been playing the look-at-how-this-building-is-going-to-tank-the-market for a couple of years now...and in most cases, those declines have not spread beyond the affected buildings. You have your own interpretation, and fair enough. Time will tell.

In another area where there is a arguably lot of inventory (but much of it is in buildings with solid developers who are simply being patient and selling slowly and not slashing), but where there hasn't been a price collapse, Williamsburg, a couple large very recent rental buildings rented out rapidly at reasonable rents..34 berry...and 184 kent. To my thinking, this means a big price drop isn't in the cards in williamsburg.

Evnyc, you've got me scratching my head too. TREGNY's Aug 2007 report (the first year they have) put doorman 1BRs at $3804 vs $3454. That's underperformed inflation by 15%, and I cannot see that as anything but a boon. We need to be at $4000 today to have simply kept up with inflation. Will we make up for "lost time" in the next several years? Maybe yes, maybe no. But in the meantime, things are cheaper than one would have expected, and that will probably continue for some time.

One thing I'd like to know among the different FiDi buildings mentioned is to what degree foreign buyers and/or investors are welcomed/encouraged into some buildings vs. others. Evnyc mentioned a building above that was selling briskly even at inflated prices, and I always assume there's some mitigating circumstance making things like that happen.

Well, I guess this is a reason why NYC will always have the need for a lot of brokers, because getting to the details that make a difference seems incredibly time-consuming.

Considering the glut of unsold condos in FiDi, why don't you consider one of them?

I'm puzzled why anyone needs a broker for new developments. You can literally make appointments and see six buildings in a day...check sales history on se...ask about price flexibility ...and have a very good idea of where things stand.

OP: "I am very interested in a coop that I recently saw, but there is a chance that I may be relocated for work within a year or two."

Come on! Does ANYONE really believe OP should buy now???

No one in their right mind!

OP- Which coop building are you looking at? I can't think of too many, just 3 Hanover Sq and Liberty Tower.

also 65 Nassau