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Here's the situation: Bought a co-op at the height of the market in a safe but not particularly desirable neighborhood in Jersey City. It was $400K and we put 20% down. It is now much too small for family situation and not possible to live there. Co-op has strict rules about renting - we can't do it. We've moved out, now living in a rental, and are also paying the mortgage on the Jersey City place even though it's just sitting there. The value is underwater, so if we sold, we would not only lose the down payment, but probably have to fork over another $30K to the bank.
Here's the question: We are not wealthy by NYC standards, but we can afford the payments on the Jersey City place. While I would prefer to be putting that money toward a bigger rental, or into savings (i.e., long term stocks), we are not going to starve - it's just very annoying and a weight on our shoulders. So do we sell the Jersey City place, and just eat the loss and loan re-payment? Do we consider a short sale / foreclosure despite what this will do to our credit? Or do we resign ourselves to the fact that we might have to hold onto for another 15-20 years before we can get any value out of it, and look at it like a diversified way to invest long term? If that latter, do we try to aggresively pay down the mortgage quickly so it's less of an emotional strain? Thoughts?
Ask the bank if it'll approve a short sale (in which you won't have to pay them the remaining balance after the sale).
If they won't -- tell them they can choke on it in a foreclosure sale, walk away, and don't look back.
A good credit rating is overrated anyway.
I agree with Matt, but before you do it, you should go to the coop, ask if they want a short-sale or a foreclosure on their hands and see if they will relent on the rental possibility. Use what leverage you have.
And why do you guys think it's better to take the loss instead of looking at it as a long-term investment? Because real estate values will be so slow to increase, and may not even be that much higher in 20 years, that it would be better to put the money in the stock market or something else?
Do you think banks are more likely to approve short sales when the amount of money at stake is relatively small compared to more expensive homes that are further underwater?
Think about how much this asset is going to cost you over 20 years -- mortgage, maintenance, repairs/upkeep (harder on a vacant property), etc. You are going to get absolutely nothing back on it until you sell.
I agree with others:
(1) Try for a short sale. If that doesn't work, you can either
(2a) See if the co-op will allow you to rent OR
(2b) Stop paying your mortgage and maintenance and allow the unit to go into foreclosure
It makes no sense to continue paying on a property that you can neither occupy nor rent.
I think the co-op and their rule against renting is the real problem -- if you could rent it out for the cost of your mortgage plus maintenance (could you post these figures?), your apartment would instantly become viable. You say you bought at the peak, which means it's been several years. Are you *ever* allowed to rent out your apartment in this co-op?
The other option is to re-evaluate "much too small for family situation" and grin and bear it in a small space. (My neighbors across the hall, if it makes you feel better, are raising two teenage daughters in a 400-SF apartment.)
Be respectful, approach Board members (informally or during a meeting) with a specific attitude and solution- Yes, I understand the rules; yes I am respectful of your decisions; I am in this situation through no fault of my own- a falling market and family development; I have a solution for you- allow me to rent it out while we wait for the market to recover; I propose we allow the Board full right of veto over any applicant, 15% of the rent, and right to apply specific house rules on this tenant.
And if you don't say yes, I am in the middle of taking out all the credit I will need for years, because I don't care about my credit rating - I will sock you with a foreclosure, months or years of the pain, and lawyer fees if you like.
The co-op actually does allow rentals but only for one year. Then you have to wait a period of X number of years before you can rent again. There are high applications fees associated with it too ($1-2K) which doesn't make it particularly worthwhile as a long-term solution. It's a large building and the management is apparently strict, so I am not sure if they allow special exceptions?
The mortgage plus maintenance is about $3K per month. Our household income is about $400K (we each earn about $200K). We have about $300K in savings/stocks and $200K in 401ks. Mid-30s.
The mortgage and deed are only in my husband's name, so if we did foreclose, presumably that would only affect his credit, and we could use my good credit to buy again down the road...
If you're comfortable, maybe also post something about the composition of the building -- how many units, what is the exact sublet policy, are any sublet right now, are any in foreclosure now, any sponsor involvement or fully sold? All of this will determine whether your co-op really NEEDS a no-sublet policy, or if it just prefers one.
I'm on the board of a small building with what is essentially a no-sublet policy. We say it's for financing, yada, yada, yada, but in reality, we could have two sublets and still be OK. If you came to us with your predicament, we would (gritting our teeth) allow you to sublet if a short sale was not on the table from the bank. If you stop paying your maintenance, (1) we can't pay our bills without raiding reserves or assessing, (2) we can't sell our units for market value (no one wants to buy into a small building with a defaulting unit pending foreclosure), (3) may not be able to get financing for the building or the units in the building.
Be polite, but you have the leverage here. Unless the co-op already has another unit or two with the same deal (renting to avoid short sale) or some other extenuating circumstances like a lot of sponsor involvement, it should allow you to rent.
sell the place and take the loss. i don't think you want your credit destroyed for next 10 yrs. it's not like you are making $60K per yr. you'll most likely want to buy an expensive house at some point in near future.
Another thought is that the no-sublet policy seems to be depressing sales prices in the building; it drives off people who want to live somewhere for a few years, pay it off, and then rent it out. So you may have some allies among fellow residents if you try to get the no-sublet policy overturned.
Your income is so high that you can probably buy something in the future with just one spouse's income (the one whose credit survives). You could even buy for cash a few years down the road and not worry about credit for a long time.
"sell the place and take the loss. i don't think you want your credit destroyed for next 10 yrs. it's not like you are making $60K per yr. you'll most likely want to buy an expensive house at some point in near future."
AB, shouldn't this be the opposite? When you're making $60k, your next home will almost certainly be purchased with a loan (thus good credit is essential), whereas with a $400k income you can live like monks for a few years and then buy for cash. The purchase price of this apartment *at the peak* was one year of their current income.
(Not that I have any idea what it's like to be earning $200k a year and having a spouse who earns the same amount)
Since we do have a high income, that is why I wondered whether we shouldn't just try to aggresively pay off the mortgage over the next 5 years. We can then forget about, and let it sit there until the market comes back, whether that's in 10, 15, 20 years, etc. There will be monthly maintenance fees but they're not so high, and we wouldn't have to worry about much upkeep if no one is living in it. We could do a reno before we sold down the road. But I am probably being too risk averse. The idea of a short sale or foreclosure just scares me, even if it makes sense financially. It seems like the universal consensus is we should just unload it.
The building has several hundred units with a lot on the market right now, including several sponsor units for sale. The building does allow a certain % of residents to sub-lease, but again, only for one year at a time, so not good for long term.
Doubt we'll be able to save enough for a cash purchase, at least the kind of home we'd eventually want to raise a family in... NYC is just too expensive and I want to save for retirement and college tuitions too!
I don't know if any of the units in the building have been short sales or foreclosures... not sure how to look that up.
Thanks for all of the feedback, by the way!
I'm in a similar situation where I bought a 1 bd condo that I have now outgrown. Fortunately its a condo, so I can rent it out, and its located in Dumbo so I can charge an exorbitant rent that easily covers the mortgage + maintenance.
"Since we do have a high income, that is why I wondered whether we shouldn't just try to aggresively pay off the mortgage over the next 5 years. We can then forget about, and let it sit there until the market comes back, whether that's in 10, 15, 20 years, etc. There will be monthly maintenance fees but they're not so high, and we wouldn't have to worry about much upkeep if no one is living in it."
Maintenance might not be too high, but you'd be paying it every single month for an apartment that nobody is using. Letting it sit empty would just cost you money -- unless you could use the threat of doing that as leverage to get the co-op board to let you rent it out. But consider the costs of 10-20 years of maintenance, and consider that the apartment will have to climb all the way back to $400k PLUS all that maintenance for you to break even.
Really, it seems that your problems stem from the co-op board and their terrible sublet policy. Had that been "unlimited subletting after 2 years" or even "after 10 years", you'd be in much better shape.
When you moved in, did you think you'd be living there for many years, until the time came to sell? Also -- and forgive the personal question -- but is the apartment too cramped for you because you unexpectedly had more children than you thought you would (great!) or because you thought you could live in a small space and are now finding out that you can't?
Husband bought the place before we were together and didn't exactly have the same foresight that I would have had... God knows why he bought a place that couldn't fit a future wife or children (in a non-desirable neighborhood), but no reason to play the blame game now. He's basically just not that financially saavy. The apartment was fine for us a couple, but really cannot fit any children. We would have no privacy or space. Plus, living there makes my commute 60+ minutes (versus 10 minutes now). If we absolutely had to live there with babies, we could, but not really long-term, and I just don't think it's worth the hit our quality of life would take.
OK, nothing wrong with your husband having bought a single/couple-sized apartment if it was before he met his future wife and had his future kid. (If there's something he should have foreseen, it's not that he was going to get married and have a kid, but that he would have problems renting the place out *if* he had a wife and kid.)
Could you make a go of it in your cramped apartment for just a few years, while the kid is small, and move then, when the market may have turned around or the co-op board may have changed its rules? Lots of people do it. (Full disclosure: my future wife and I live in 400 square feet now. If we get married and have a child, we would probably stay in an apartment the size of our current one when the child was small, but if we had two, or the kid reached school age, we'd want a little more space. But not too much, because we prize a good neighborhood over everything and are willing to compromise on space.)
I think you should sell.
You bought for $400K with an $80K downpayment, so I guess that means you think you'll close at $320K or so and pay $20K to the brokers and maybe another $10K in taxes, etc. The money lost is water under the bridge, but you seem to be having trouble with that.
So let's do this. Instead of choosing between "keep" and "sell", let's look at "keep" and "sell and then buy a similar condo in Jersey City that you can rent out". If you do the former, you'll get whatever the market returns (minus transaction costs) with a monthly outlay of $X depending on what you do with financing it. If you do the latter, you'll pay $30K in transaction costs today to get the same market returns (minus the same transaction costs) with the same monthly outlay of $X, but in return you'll get (say) $20K a year in rent. Effectively, you'll make that $30K back in rent after 1.5 years.
The problem you face is that rent provides a very significant annual yield (I assumed 6.25% above) that you are currently foregoing. If you want exposure to the Jersey City apt market, you are getting it in a very inefficient way. So much so that the $30K transaction costs are negligible in comparison.
Having gotten through that ("sell and then buy a condo in JC" is better than "keep"), you simply need to make a choice between "sell and do nothing" vs. "sell and then buy a condo in JC". So you definitely want to "sell", and the question of "do nothing" vs. "buy a condo in JC" becomes a separate issue. I'm guessing you don't care to do the latter.
On short-sale/foreclosure vs. taking a $30K hit, you should take a $30K hit.
First, NJ is a recourse state. That means they can come after you for the $30K deficiency, plus fees, etc., after a foreclosure. Don't know if lenders are actually doing that, but you should be a nice, fat, & juicy target. Lots of income, lots of money, etc.
Second, I am a big believer in the idea that the value of good credit is finite. However, I place it around 1 year's gross income ($400K for the two of you). If the amount is much below this ($40K), definitely not worth it. If much larger ($4M), definitely worth it. I don't know how effective the "only one of us takes a credit hit" will be. Doesn't that mean only your income can be used to qualify you for a loan? Will lenders look to your husband nevertheless -- "I'm married, but only qualify through me" is code for "my husband's got a big boo-boo"?
If you are underwater now, how much will the value have to appreciate in the next 10-15-20 years in order for you to 1) cover your down payment and outstanding mortgage balance plus another 10% above your purchase price to cover your selling expenses and 2) cover the total monthly expenses you are incurring (maintenance, upkeep, taxes, etc).
Based on the numbers you provided, you think the current value is more than 20% below the purchase price, so not only do you need to recoup that, but you also need the price to appreciate another 3% per annum to cover your monthly expenses. It would take at least 15 years of 5% annual price appreciation to cover your costs... do you really think that is worth it and/or reasonable? Each year you are doubling down and hoping you finally get blackjack. What happens if we have another crash or massive inflation in 10 years, then instead of losing $110k, you are out $300k.
I'd say cut your losses as soon as possible, whether that's negotiating with the board to rent it (whether by reasoning or threating to go into foreclosure), asking the bank for approval for a short sale or just walking away and getting foreclosed.
Cut your losses now and move on. You'll take a hit, but better than carrying around this anchor any longer.
Quote: Our household income is about $400K (we each earn about $200K). We have about $300K in savings/stocks and $200K in 401ks. Mid-30s.
You bought it: Pay for it. Either this is a fake dialogue or you simply don't take debt seriously. Sell it at a loss. You gambled on real estate. You do not sound like a victim and you do not portray yourself as unable to make educated decisions.
This is a fake post I hope.
Hi incheon69, I notice you are a long time reader, 2nd time poster.
incheon69, thank you for pointing that out.
OP, you ARE "wealthy", even by NYC standards (incidentally, $70K is the median HHI for Manhattan ... at $400K you're making more than 99% of New Yorkers, according to both the Labor Dept. and the Census Bureau). At $400K income and half a mil in the bank, you can certainly afford to suck this one up.
> Since we do have a high income, that is why I wondered whether we shouldn't just try to aggresively pay off the mortgage over the next 5 years.
You are really considering perpetually funding a vacant property that can't even be rented?
Just to break even? Talk about sunk cost idiocy. The money is already gone. Get over it.
$30k is nothing for your situation. Get over it.
Sell the place, eat the $30k, and move the f*ck on with your life.
Lessons in why never to buy in a co-op unless you are as certain as reasonably can that your situation will not change in the short-term.
I think though it is cruel to blame your husband lack of foresight and for buying a place "couldn't fit a future wife or children (in a non-desirable neighborhood)". A guy in his late twenties or whenever he bought just needs a place to live. There is no reason for him at that point to be paying for a place bigger than what he needs. His only mistake was buying in a co-op if he was thinking marriage and kids may be on horizon in short-term. Many men his age dont own property so he did well to do so. You say he is not financially saavy - if the property had appreciated 30% and you sold and made profit then all of a sudden he would be a man with foresight. And now you consider soiling his credit rating and keeping yours intact. Poor man - he better sell and cut his losses - just the price to pay for being prudent, saving a large downpayment in his 20s, buying property and getting married, while many of his peers were partying and not saving a dime.
Paying for a place you dont live in, and will never live in, simply makes no sense. If you want to invest 3K a month put it in some vehicle that is likely to yield return and not in a vacant sinking property.
"he did well to do so." ... what an outrageously wrong statement. He's underwater now, despite a massive downpayment.
"if the property had appreciated 30% and you sold and made profit then all of a sudden he would be a man with foresight." ... WRONG WRONG WRONG. There are clear times to buy (as indicated by rent ratios and other factors), and clear times of ridiculous bubble-like pricing.
There are a few (very few) real estate agents who would say flat out "this is a terrible time to buy ... wait and be rewarded. The rest are criminals, and should be treated as such and subject to tort damages and other penalties.
But alanhart - you dont know what year he bought - maybe it was a reasonable decision at the time. At the time he bought who was to know how the property market would head? All this surely you can only know in retrospect? If we all had a crystal ball we would know when that right time to 'wait and be rewarded" is.
So you tell me when are these clear times to buy? While you have such insight into the future the vast majority don't and are not as saavy as you may be. Clearly though he did not though buy at a ridiculous bubble price - 400K hardly is - of course the OP has not told how small this place that is too small for her is so maybe you may still be right...
Matsui, perhaps you should become a real estate agent, as you're not a very good "listener" so you have one skill set down already
... first post says "Here's the situation: Bought a co-op at the ***height of the market*** in a safe but not particularly desirable neighborhood in Jersey City."
And 400K is a ridiculous price for a not particularly desirable neighborhood in Jersey City, in a restrictive coop. What do suppose the rent for a similar place was in 2006 or 2007?
You're missing Matsui's point. The guy was responsible enough to even be in the position to consider buying something. He's miles ahead of most idiot renters who never manage to save a dime. A woman is better off marrying a guy who loses his life savings investing in Sprint than to be with a guy who never has 2 nicklels to rub together and lives paycheck to paycheck. Most broke renters never see $40,000 in cash their entire lives. Over the long haul, this $30k loss will be a rounding error. Basically, it's a few months savings for a guy who's making $200k. Big fucking deal. Write the check and move on with life.
You assume though that your definition of the height of the market is the same as the OPs - I will be surprised if it is. Also the height was defined bacause of a fall that came after it. How was OPs husband to know the height had come and that the market was not still in ascendency? Even regulars on SE seem divided as to whether 2011 was a year to buy, even now we are well into 2012. Easier said than done, especially in retrospect. La critique est aisée, mais l'art est difficile....
That said I have no idea where jersey city is so excuse my ignorance if it seems so glaring that it is overpriced...but we still dont know how small this place is that is too small for the OP.
Do I need special training to be an estate agent?
>Matsui, perhaps you should become a real estate agent
I've already accused him of that.
"He's miles ahead of most idiot renters who never manage to save a dime." ... tell that to the millions of people who saved more than a few dimes, only to surrender them to the banks and get foreclosed on. Unlike their renter neighbors, who consumed the same housing at a fraction of the cost, and with way less bother.
"Do I need special training to be an estate agent?" None whatsoever, but it would help if you lived in the UK or someplace like that, where they have estate agents. And a total lack of skills, social graces, and competence definitely helps, if estate agents are anything like real estate agents.
All major media carried prominent discussions of the real estate market's "frothiness" and bubbliciousness by a wide range of terms in the year or two preceding the crash. It was discussed by Federal Reserve spokesmen. For a year or two before Wall Street's big troubles, western states were experiencing precipitous drops in real estate values, and massive foreclosures had begun. It didn't take the Ghost of Real Estate Crashe Past to take you on a dreamlike journey to figure out that it was a bad time to buy. It really didn't. It's not a matter of retrospect.
Nor is it at all clear that 2011 will turn out to be a great time to buy. The world is still in recession, the nation is still in recession, and Wall Street is headed towards another big round of layoffs. Nationally, massive numbers of homeowners are still delinquent on their mortgages. The slightest increase in interest rates is likely to set off panic in the real estate markets, and that includes New York.
alan, you are very, very negative. But, oddly, you are very lucid recently and I appreciate lucidity even though it was a mind on LSD who created the most valuable company in the world.
"Over the long haul, this $30k loss will be a rounding error."
Perhaps it will be a rounding error. But it's currently $110K: you're forgetting $80K downpayment. Probably more if you account for the negative carry, empty months, cost of capital, etc.
Okay, I'll be the contrarian:
I am a real estate agent in NYC, so I don't know the exact ins-and-outs of the Jersey City market, but it does seem to me like expecting it to take 15-20 years before you get any value out of this apartment is rather pessimistic. Overall it looks the housing market nationally is recovering, so if that's your scenario, I would certainly play for time, renting for the year that the co-op allows you to (because if you make $400k a year, paying the building a couple of thousand to be able to rent the place shouldn't be that much of a hardship) and then, as other posters have stated, applying for a second-year rental exemption.
For those two years, can use your rental losses to tax-shelter your income; it's quite possible that market values will rise enough to more than offset your minimal losses, and finally, I would question the psychological wisdom of being so quick to mar your husband's credit over his dumb investment.
DG Neary Realty
19NYC78: Have you met "lisa" on the "House Rules" discussion?
She may be looking to rent soon.
huntersburg: He was trippin', trippin', trippin'...
inonada, the $80k is gone. It's not a factor. The only real decision here is to keep or sell. If they sell, they pay $30k to do this. Otherwise, they keep the $30k and own a vacant money sucking property. The decision is obvious.
>>>front_porch says I am a real estate agent in NYC, I would certainly play for time, renting for the year that the co-op allows you to and then, as other posters have stated, applying for a second-year rental exemption.
I see - maybe I should be a real estate agent afterall. Lots of money to be made here. Rent out a place for a year, collect my commission and then a year or two later sell it and get more commission. Nice advice. Good stuff.
lisa is waiting for your call...
Ali - I think if he makes $400k per year, he is ineligible to use rental losses to shelter his income. I am not rendering a legal opinion here and cede this territory to the CPA's, but when I looked into this question for personal reasons when I started renting out my FL cottage, I found that any losses I might sustain on rental property could not be deducted from ordinary income. I believe any rental losses for someone making over a certain threshold come into play when you actually sell the property for computing any gain or loss at the end of the day (e.g., if you bought at 100K, rented out at loss of $2k per year for 10 years, then sold at$120K, you will not have any capital gain). Btw - Ordered the hard copy of your book and have found myself laughing out loud at certain portions. I am now at the part where you discuss Internet chat rooms - the water cooler analogy had occurred to me as well. Very enjoyable read.
another satisfied customer, ali!
"inonada, the $80k is gone. It's not a factor. The only real decision here is to keep or sell. If they sell, they pay $30k to do this. Otherwise, they keep the $30k and own a vacant money sucking property. The decision is obvious."
Well if you ask me, the whole $110K is already gone.
On Ali's suggestion to rent it out for a year or two, here are some thoughts.
1) It can be hard to find customers for limited-duration coop rentals.
2) Based on the $3K monthly nut and $320K mortgage from 4 years ago, I am guessing that maintenance is running $1K and mortgage is $2K with an interest rate in the 6-6.5% range. Let's say $1.7K of the mortgage is interest.
3) Let's say you could rent for $1500 a month.
4) That still leaves you with a negative carry of $1200 a month, $14.4K a year.
5) Assuming a current market value of $310K, it'd take a 4.6% annual increase in price to cover the negative carry.
RE increases with inflation long-term, which the markets currently put at 2%. You'd need this RE to outperform by 2.6% a year to just break even. If you think 4.6% RE increases are reasonable expectations, well that's the kind of logic that probably put you here in the first place. (Well, the logic was from others, not yours.)
If you do go down that route, refinancing to a current rate would help. But then again, it'd make you sink more equity into this. And you wouldn't be able to get primary residence rates any more.
As usual, Inonada's analysis is persuasive.
Matsui, I am not a Jersey City agent. Certainly if I were, and I were chumming for business, I'd say "sell now."
NYCReNov, thanks for the kind words about the book. I'm working on a second but it's going very slowly.
I admit I'm not a CPA either, mea culpa if I shot too fast on that one. Certainly worth asking an accountant about the tax implications before using tax strategy as part of one's decision-making.
Nada, your analysis is incisive as always. However, while real estate *generally* rises with inflation, we've seen that the prices of *specific* properties don't correlate 100% with inflation. Is 4.6% annually over a couple of years a reasonable expectation? In many markets nationally, certainly -- Phoenix is up double-digits over a year ago. I can't speak to the OP's property specifically, since I don't know anything about it.
I do agree it can be tough to find customers for co-op rentals, but remember, this unit is sitting empty, so presumably showings are not very disruptive as far as the owner is concerned.
Are you sure that a foreclosure leaves you free? What about deficiency judgments? Are banks interested in short sales? It's not as though your property has 50% of its value. Someone will buy it. Better a big pain that's over quick than a longer-drawn-out slightly less painful hurt.
>>>front_porch says I am not a Jersey City agent. Certainly if I were, and I were chumming for business, I'd say "sell now."
That does not though remove your conflict of interest. You could be a real estate agent in Singapore for all I care, but a real estate agent would be the last person to expect a balanced unbiased opinion from in a situation like this. Of all the parties involved: the OP, his lenders, the co-op, a prospective tenant, the only one that is certain to gain from your recommendation is the real estate agent. It is like if you post a question should I renovate or should I not, all the contractors will post to renovate; doesnt mean they are looking for business, but that is what they do.
There is nothing wrong with a conflict of interest - and you obviously make your conflict clear in every commment you post, which is very good - but all advice must be interepeted in that context as our opinions are influenced by our conscious and subconscious biases and interests.
You are getting very sleepy,
you are getting very sleepy
your eyelids feel heavy,
your eyelids feel heavy
you want ali to gain from your situation,
you want ali to gain from your situation...
Wow Mitsui, that's a real stretch.
Does the dentist have a conflict of interst when they give out lollipops?
i never thought of that h'burg. I had always wondered why they gave kids lollipops at the dentist - and the cheapest and most sugary ones for that matter.
This just in:
"The Nation Association of Dental care providers is pleased to announce that as of Monday, August 28th, 2012;
all lollipops provided will be organic. No sugar, no syrup, only the most expensive ingredients will be
used in the new formulation of the lollipops given to your children."
"The Office of Mayor Bloomberg is pleased to announce that lollipops will be banned from the offices of all dental practices in N.Y.C. It's for the good of the children of N.Y.C., whose health I am concerned with, even more than their own parents. Even more than Matsui."
"The members of The Lollipop Guild are pleased to announce that we have agents in the process of delivering
lollipops to all dental offices in N.Y.C. Screw the mayor!"
"Is 4.6% annually over a couple of years a reasonable expectation? In many markets nationally, certainly -- Phoenix is up double-digits over a year ago."
While it os a God-given right in this country to speculate, let's look at the numbers.
In Phoenix, the market hit bottom last year and has since risen 10%. Relative to the bubble peak, it had been down 55%. Now it's 25% down. Compared to a pre-bubble reference point of, say, 2000 it was 25% cheaper inflation-adjusted. You can fetch $1500 in rent from a $150K home.
Looking at the NY metro market as a proxy to Jersey City, prices are only 25% down from the peak. That's a 65% premium to where Phoenix was last year. Compared to 2000, it is 30% higher on an inflation-adjusted basis. That's a 60% premium to where Phoenix was. In order to fetch $1500 in rent, you need to spend more like $300K.
Now mind you, Phoenix's 10% rise came on the tail of a huge drop in interest rates. The drop was so dramatic that, as any bond holder would tell you, it boosted the value of long-term bonds (the year's yield aside) by 30%.
"In Phoenix, the market hit bottom last year and has since risen 10%."
Do you think that's a true bottom, or just some distracting oscillation in the midst of continued mortgage delinquincies, held-back foreclosures, etc.?
Me, I see no indication of general improvement in the economic climates (whatever mysterious forces those may be, no manufacturing, no agriculture, not really so much tourism, not much financial services except a little backoffice stuff) of places like Phoenix (or similar Vegas, which is still heading downwards last I heard)?
No rush. By the time you get to Phoenix, she'll be sleeping.
Not much military or other Federal government, not much nonprofit except of the local variety, not much mining or energy, not much tech, entertainment, transportation, tele-communications, et cetera.
"What do we got
we ain't got much..."
"Do you think that's a true bottom, or just some distracting oscillation in the midst of continued mortgage delinquincies, held-back foreclosures, etc.?"
Not sure, might be just oscillations. Let's put it this way, I don't expect another 10% per year for the next couple of years.
Matsui: Drop it already.
front_porch is a long time and respected commenter on these streeteasy boards. I am certain we could find equal conflicts in your opinion(s) on this influenced by your "conscious and subconscious biases and interests" due to your background, geography, and/or other matters. The point here is if the info is sound, or not. The suggestion that brokers shouldn't post here (or on any streeteasy boards), or that their opinions should be automatically devalued based on that single criteria alone is ludicrous. In some cases, their opinions on specific matters are uniquely informed due to their expertise and experience.
And no, I have nothing to do with the real estate industry. I just know ali, and I know that she is a 100% class act.
You clearly don't understand the concept of conflict of interest. Ali certainly does which is why she signs her name and declares she is a RE agent in almost every post she makes. It does not mean that one is not a '100 percent class act' or honest or reputable. It just means people should see you in the context of what you are.
As you said I have my biases that creep into what I say when it comes to my profession etc. If I have stocks in Apple I will more likely advice you to get an ipad than a galaxy. If I own a unit at Azure, I will more likely advice others that it is a great building to buy into. The lawyers on this board respond more favorably about their group as do contractors and other RE agents. That is human nature. Try posting - 'do i need a broker to sell my apartment' and see if there is a single broker who will come out and advise you to go ahead without a broker. Or post - I want to renovate my apartmeent myself without a contractor, and seee if any of the contractors on the board will come out in support.
I have nothing against Ali, respecct her opinions, have followed her work off-line, and would recommend her without reservation to anyone looking for a broker. But if I were in OPs position aa broker is the last person I would take advice on on this matter.
This shit is funny. Ali is being a contrarian. Is that code for financial idjiot.
Two re borkers, mix in one underwater 'owner' who admits there was a bubble 'peak' multiply by 50,000,000 => and nyc re is so so so doooooomed!
Did ya hear?, apple won the patent lawsuit. I wonder if sprint jumping on the iphone bandwagon will pay off in the long run? Don't worry underwater jersey coop owners, plenty of idiots sold sprint 'owners' sold when mgmt signed up for the $15.5b iPhone order.... W67 bought sprint when others were running.
From w67, w68, and esp w69. Sell that pos ASAP. You'll be 10 years ahead of matsui and Ali who'll finally admit nyc re was the worst pos 'investment' in their lifetimes during. 2003-2022.
just buy the OP's apartment.
Without any advice from ali. The OP won't need to take any advice from ali.
No advice from ali nor any RE broker.
And you clearly don't understand the concept of being pathetic, which you clearly are.
In clearly stating her career at the outset, she sets aside the conflict by allowing the recipient of her experience to properly filter her expertise. Your blathering examples mean little. Once someone has clearly stated a possible issue, and is still respected widely, it (re-) confirms that others already understand the conflict and still prize the person's knowledge. It does not automatically (as you suggest) mean that their opinion is somehow suspect, or worth less than any other opinion.
The fact that you would consider her opinion to be "the last person I would take advice on this matter" as compared to others here (?!?) is remarkably foolish and close minded.
Right. If ali is the last person, who is the first person he would take advice from here on se?
You for one. You speak the truth, understand RE and are not in bed with any RE agent, and certainly not pimping on behalf of any. Then all the other greyed out folks come next, which make me wonder who is behind the greying and whether there is a conspiracy to mislead by blotting out some real good advice and opinions.
Well, I sold my Manhattan condo in Feb. made great profit because I bought it in 1998 for cash.
I'm renting now. In no rush to buy.
In reference to my greying: I'm in here because columbia county was trolling me, as you probably noticed.
Now he can't find me as easily because my comments don't bump the thread discussion to the top of the list.
So, my advice is to sell it. But at least don't leave it empty waiting.
so...you blame me?
how does that work?
do you ever take responsibility for anything?
or do you just call your lawyer?
Well he has found you truth and once h'burg finds him then you might as well kiss this thread goodbye
Yes, he found me because this thread is on top of the list.
I don't read his comments because I know from huntersburg that he has nothing good to say about me or to me.
I chose not to read him when I first came on se. He was already in the grey zone at that point. Nothing to do with me. He can't control himself and his own life so he tries to control me. Typical bully behavior.
huntersburg has been vigilant in defending me from columbia county and the threads are deleted not all because of huntersburg but actually because of the bully gang members' comments.
That's why they got sent to the grey zone.
You obviously read his comment up there.
Anything of interest, Matsui?
how did you get banished as a result of me?
based on your suggested approach here, why wouldn't you go long on buying as many jersey city properties as you possibly could?
columbiacounty, how was your weekend? Did you kick any kittens or puppies?
it seems like you're fading....running out of steam.
putting far more energy into your other identities.
Now see, Matsui?
I was on this discussion talking to you.
cc. came on to troll me. huntersburg was not around at all.
You started posting comments on se in August of 2011. That was just days or weeks after the bully gang members got sent to the grey zone.
A couple of them got all huffy and "left" se. Then they just "came back" in June. Still in the grey zone.
Until they were sent there, no discussion thread I was commenting on was immune from their vicious comments trolling, posting lies about me and threats.
So many threads were deleted or edited because of them, not huntersburg.
I'm perfectly happy in the grey zone.
matsui...do you see?
What a surprise, columbiacounty hates the Japanese.
and you are basing this theory on?
so...you say something outrageous.
i don't refute it.
now it's the Truth.
no, you show a clear negative bias. I point it out. You don't refute it. When this train of thought is pointed out in black and white, you still don't refute your negative bias.
But why not ask this finally now for the record, do you or do you not hate the Japanese?
are you japanese?
It's been a nice day for me.
I've been on a jamon high.
I love pork too. LMAO.
a coop in Jersey City must cost less than your rings, just throw it away or donate it to those who really needs it.
don't abuse the limited resource on earth
caonima last comment is interesting.
Would it be better financially to demote it somewhere? Could such a scenario be created where it would be better than walking away?
Ali, do you read the news? Remember Jamie Diamond's chortling testimony in front of congress that banking crises are just something that naturally occur every 5-10 years? Well, it's been a few years since the last one, they haven't taken care of a great deal of the problems in the international banking world, and housing is hardly "booming" back, despite record low interest rates for a record amount of time.
Sell that fucker now, and be grateful if you can.
btw, this is not a morality call. i think many people SHOULD walk away from their mortgages, but it needs to make sense. you don't need or want the hassle of foreclosure, and you own in a recourse state. you can afford to take the loss. if you were struggling to get by or unemployed, even in a recourse state, it would be one thing, but you aren't. it's just that you don't want to take the loss. stupid purchase, but your husband wasn't the first nor the last to get caught up in the bubble.
Just wanted to very diplomatically point out that being able to "save a dime" usually has a lot more to do with the cards you were dealt and what socioeconomic classs you were born into than personal intelligence!
Back to you , Bob...
ar, I don't just read the news, I write some of it. Here's a data point for the NYC metro area: Brooklyn condo prices up 24% y-o-y on a psf basis.
As I said above, I'm not involved in the Jersey City market, so I can't speak to that specifically. And of course no one but the man upstairs can predict with 100% reliability when the next macro crisis will hit.
But the OP shouldn't overlook that demand is tightening -- significantly -- in some parts of the NYC metro area. That's got to be an input in any "sell now, or hold and sell later?" calculation.
> Just wanted to very diplomatically point out that being able to "save a dime" usually has a lot more to do with the cards you were dealt and what socioeconomic classs you were born into than personal intelligence!
Up 24% on a Psf basis?
Please wake up, please wake up please wake up