poll

Suppose you asked two people that question. One is a megabull who believes we have passed the bottom and stand on the cusp of a huge run-up. The other is a superbear who thinks New York is crashing, and will hit bottom in Q4, with fire sales on condos all over Manhattan.

I think they would give the same answer.

Yes.

yes

Yes, but.

No.

There can be quite different answers depending on the market segment. If I were a sub-$1mm buyer, I might be at "no, but could be wrong". As a trade-up buyer looking at selling the low $1mm area and buying in the $3mm or so area, I'm at a firm "no" because I'm confident that the spread between those two segments will continue to compress.

Yes - if you get a good deal on a good property, any time's a good time. If you get a crap deal on a crap property, any time's a bad time. I think it's easier to shop now than it's been in a decade, in so far as having time to make a decision and quality of inventory. There will be people that buy when the market is peaking who will make money, and people who buy when the market has bottomed who will lose money.

No.

Expect another 20% decline over next year or so. Buy late 2010 at which point probably only another 10% downside risk.

No

Not for Manhattan but I have bought in other states. Nothing too expensive by NY standards but bought a nice summer or winter home for $125k cash deal. No mortgage, cheap tax, my investments aren't doing any good with around 1.0% - 1.5% RIO and sometimes even less than that. Kinda funny, but I paid off just about all my debt (college loans, wife's loans, car loans) except for my main condo/home here Brooklyn.

No! Manhattan needs another 35%/50% adjustment

no.

No
Having lived through the entire last cycle - early 80s to late 90s - this does not look like the bottom, we're too close to the top. With all the new construction coming to market, I don't think the market can handle all that stock at the present prices.
BUT I do think in existing co-ops you might get something worthwhile if someone needs to get out quickly, or possibly in new construction if the builder needs to get rid of the last few units.

Maybe :)

If we get an amazing deal on an apartment we love this fall, yes. Otherwise, no.

no.

No.

Too much downside risk and no argument for an upside except "we must have already hit bottom". Don't forget we still haven't been hit with the 57-60% marginal tax rates that hit the income group needed to prop up these apartments. Not to mention the possible taxation of the gold-plated health plans of that same income group has.

A lot of things need to play out. Too many of them to the downside.

Yes, if you are either a "starter" buying a studio/1br for under 700k,or high-end family buying over 2mm.

Otherwise - no.

No. Unemployment is expected to go rise in NYC thru 2010. Will consider Fall 2010 and see where things are. But will still look for distressed bargains until then.

No

Really? If you're contemplating on this I have this sure thing, 110% guaranteed investment you might be interested in. You see, I'm from Nigeria and need to move some money out of the country. If you can pay a small transaction fee I will give you ....

Yes, wait No, no, Yes....nope, back to No.

who the heck knows

Investment or primary residence?

If primary residence, I would vote Yes, and I wish I had the money right now, baby, there are enough distressed sellers out there. If investment, I would vote No, and would plan on taking another hard look in January. The market is usually better for buyers in the winter months, and by then we'll know more about where the bottom of this market is. Maybe.

I also agree the 'hood matters hugely.

{Manhattan real estate agent. 917. 365. 0876}

No, though I'm keeping an eye out for yes.

???? That's the eternal question

If you find something that works for you at a price that works, go for it. If not, you won't miss the boat, nor will you be "priced out forever" if you wait another year. Nothing going up for a few years, maybe more.

Yes. 20% - 30% from 2007 highs .... is a huge mkt correction. financial sector has bottomed and will return. given 5 yr time horizon from invest, it will be a different envirnoment. So, pay urself and make the investment. this would be a 13 on the td sequential - technical indicator that smart investors use to make money when price moves to fast in 1 direction. this is a 13 buy signal. trader lingo

SO far only 7 yes out of 23 responses......interesting to see that most say NO....its the uncertainty more than anything else i think...

urbandigs.....you seem irritable these days...has something changed?

buster, clever but wrong. you need to look at where prices are compared to those over the last 10-15 years, and account for income trends and particularly changes in underwriting standards.

UD, don't doubt yourself so much. these things take time.

no

YES. (Actually just closed three weeks ago) and moved on Monday -- sick of boxes!

ali r.
{downtown broker}

no

No, maybe yes next month.

yes at a 2001-2 price on the UWS, No otherwise

NO WAY Jose..The Hamptons are crumbling ..Lotsa two homes folks are starting to squirm..Wait till Q3 2010

no

No

Anyone know where Uncle Steve stands?

No.

Should we log votes for the 2000 or so that signed contracts during this brutal summer season?

I mean, seen as how they are more likely to be getting ready to kiss 40 layers of paint and ass worn bathtubs goodbye than to be hanging around here doing bear group therapy with you all.

Gee UWSmynabe if the market is SO busy then why are you, a broker, sitting here? Don't you have contracts to get done for this wonderful real estate market we're currently in?

No. The real correction hasn't happened yet.

The broader economy is going to get beaten up again by commercial RE at it starts to crash. It's going to take years for the dust to settle.

Unemployment is going to go up some more and stay high for a long time. NYC real estate has more to fall.

it's roughly 1/3 yes, 2/3 no at this point.

When it's 80-90% no for a period of 18 mos or so, real estate may be ready for a sharp uptick...i'd guess that will occur in 2015 or 2020....

NO. I went looking at 10 listings today and a gew the other day. Sellers who bought in the last year or two still want only a slight discount from what they paid. I am savings cash and waiting. When rates go up, it will only bring prices down more.

No way. Rates are at all time low which inflates prices (low rates are just a transfer to the seller). having cash, one has to wait till rates are sky high and refi later on. locking in a principal as low as possible is the goal. it'll take a good 3-4 years but thanks to helicopter bernanke, deficits and unfunded entitlement/pensions, it'll happen.

admin is going to time the bottom AND sky high rates AND the subsequent opportunity to refi!!!

whenever mkt is 50% off peak, i will begin lowballing with cash for quick close and a sure bet for coop board approval, for a seller who needs to move quickly

board rejection...pisses me off

prefer new construction condo living and liquidity but worry that new condo supply overhang, tax abatement issues and equally weak euro ecomomies will keep condos depressed longer than prewar coops--so i think established A coops will be the proper sector--agreed re boards--arbitrary and unpredictable--and many boards couldn't pass the snifftest they apply to buyers they reject!

no...rent for one year.

Yes. Going to start looking for a place seriously in January: First time buyer looking for a primary residence that in 5-10 years will become my pied and will be kept forever, 1-1.5mm.

Continues to get more interesting......I think this really does represent the buyer mentality right now...WAIT!

Yes.
Bet against the majority.

"Continues to get more interesting......I think this really does represent the buyer mentality right now...WAIT!"

Beware of herd mentality. Buying a place is and will always be about your personal finance.

"board rejection...pisses me off" - UD, general comment or actual experience? Sorry to go off topic on this thread, but this is too interesting not to ask

actual

ouch. sorry to hear that. thanks

urbandigs,
Are you getting flamed because you're getting a tad less bearish?

Are you going to slightly discount the 'yes' from first time buyers as they might be more motivated by the govt incentive for newbies than a prudent evaluation of the marketplace?

whats wrong urbandigs? you are a valued member of this board.

Yes, if you're buying for the medium- to long-term.

"Are you getting flamed because you're getting a tad less bearish?"

no, that makes me happy. you seem to think I want things to be bad rather than be a voice of reason since this whole crisis started.

No.

Our luxury rental is still practically free when side-to-side with a comparable purchase.

no

urbandigs, your honesty is what makes your blog so invaluable. I'm just waiting for some of the permabears who've praised you to start turning on you (if it hasn't happened already).

bjw, permabears attact mainly dishonest, predictable and tedious broker's speech repetitions. Everybody values ud in this board.

they have. but they think the markets are wrong. I say, dont underestimate effect and duration of stimulus. this is a rigged environment, to stave off a depression. Even bernanke admitted it. of course you will see effect, but is this what you want to build growth off of? Ericho seems like a kool aid bartender to me, passing out drinks to whomever will listen after buying real estate a few months ago.

Thats fine. Ill enjoy the uptick too, but I fear consequences from all these so called free lunches.

Ericho forgets that I was bullish on MANHATTAN from 2005 all the way to mid 2007, publicly on UD.

http://www.urbandigs.com/2007/01/buyer_activity.html

http://www.urbandigs.com/2007/02/market_update_v.html

http://www.urbandigs.com/2007/02/nyc_housing_def.html

no
will start going to open houses and watching specific properties in about 12-18 months. right now, rent and save. this is a pretty scary uncertain time and too many things could go terribly wrong. or not. but no reason to tie ourselves down to a property right now.

No. Until GV is no longer different!

mimi, I wouldn't say everyone does, but reasonable people certainly do. I don't get the permabear comment - they tend to be virulently anti-broker, not for them!

urbandigs, agree on all fronts there - impossible to look at this uptick as something that wasn't selectively engineered. There will be consequences; it's just unclear how they'll manifest themselves.

As for the poll here, my vote is a solid "depends."

the selective engineering actually makes me more bearish. the longer it takes to unwind this thing (excluding financial meltdown, which was necessary to avoid) the greater i fear the long-term implications. as i see no long-term upside in prices, i see no downside to being prudent and seeing what effects the massive infusions of cash via government debt will have. if interest rates rise prices ought to fall further, and eventually underwriting standards should achieve some reasonable equilibrium. there will be tremendous issues in CRE and the condo market here, as well as national CRE, bank solvency, and other credit defaults.

aboutready, you see no upside in prices even on the long-term? I agree, the selective engineering makes me a bit queasy sometimes, but it's mostly due to the unknown. CRE and interest rates are the two concrete issues (off the top of my head anyway) that I see as nearly "sure things." How long is your long-term here? 5 years? 10? 20? More?

No.

As bjw suggests above, it depends on what your definition of 'long-term' is. If you buy now (or soon), you're buying for a place to live, not necessarily expecting any appreciation in the next 3-5 years. And woe to you if you need to sell in that time.

If you think prices will continue to fall or at best/worst stay flat for at least three years (as I do), there's no need to overpay for a place now.

That's my general perspective. Of course I agree, too, that if you find the right deal with significant downside risk built into your buy price (or you're getting a good deal and you KNOW you won't move in 15 years) then buying now could make sense.

bjw, as i've said before, we're about 16 (mandatory, might change but law firms have been sticking to their dates) years from retirement. i have zero interest in a thirty-year loan. my drop-dead decision date is 2012, with a 15-year mortgage, and i may or may not buy under that scenario. if we were 30, 35 or even 40 i might think differently, but even then i see only downside, with possible mini upsides along the way, for the next few years. if rents weren't also declining, i'd see more upside to buy and hold for the primary residence. i'm not certain where and when the profit in real terms will be realized long-term, but i'm still paying about a third less than i would after taxes for comparable space.

having said all that, i've always understood why people wish to own. and i do see some options that are far less risky, in my estimation, than previously, although right now i wouldn't recommend trading mobility for housing without a large cash reserve, the economic situation seems too uncertain. it's funny, i used to be hugely impatient, and very eager to buy again. once i forced myself to adjust to thinking of my rental as a home, and the entire situation as a part of our financial planning, a sort of zen-like patience has descended. i also want to have the cash, freedom and flexibility to enjoy other life experiences, so many people i know are stretched by their housing obligations.

aboutready, seems like a well-thought out plan and one that you've made peace with. Sorry was unclear, but was asking what you meant by long-term in a more general way (though your personalized take is quite interesting and relevant as well!). I'm just a bit surprised you only see downside, even for a 30-year old buying now. That's a very long-term scenario for flat pricing - I don't have nearly enough confidence to predict things that far out, though that shouldn't stop one from trying. As a side note, why are you avoiding the 30-year mortgage? Though it's not quite comparable, my parents (both well past retirement) are considering buying a place in the area and always prefer the 30-year route - would you be against passing on the asset (and remaining debt, of course) to your children should you (knock on wood) not be around for the duration of the loan?

And apologies for the slightly morbid post, but I think it's an important topic.

actually, bjw, if we do buy in nyc it will be as part of our estate planning for our daughter, but it will still be a 15-year mortgage. we will also need to purchase (or rent) a retirement home in a different location, and while we hope to be able to do so not using any equity from a NYC purchase or the house upstate, we also hope to be able to gift the apartment to our daughter over time.

we will be buying at a price significantly below what we can afford, we won't get much of a tax benefit, i'd just as soon get the 15-year mortgage although i won't benefit as much from any inflation that way. when we retire it is paid for. if the mortgage lives longer than we do our daughter will be doing fine, financially at least.

and it's not that i don't see any eventual upside for a 30-year-old purchasing, it's just that the risks of ownership seem high now compared to the benefits given the financial and employment uncertainty and the cost of renting. also, few 30 year olds are ready and able to purchase the home that will be able to grow with them over the next 15-20 years. if you can buy an apartment large enough for any possible eventual family size, are certain that the educational options will be sufficient and you will be able to afford them, and are very securely employed and/or have a large cash cushion, that's one scenario. then there are all the others (will be able to live comfortably, more or less, for at least 7 years which is my minimum risk acceptance, for example), some more, some less risky (and some of this assumes an increasing family size, obviously, but not the employment issues). the risks are always there, but they seem more so now, not intending to say they should paralyze those considering purchasing, just that they're real and worth a thought or two.

For anything above $1 million, no, at least not before the middle of 2010. Reading SE now for over a year and a half, I'm struck by how little knowledge most of the optimists who post here actually have of the history of Manhattan's residential real estate sector since the late 70s, when I first moved here. All the historical evidence suggests that this recession has at least another year-- and probably longer-- to play itself out in the residential RE economy.

With all these "NO's" will there be a pentup demand in 2010/2011 which will cause bidding wars etc...now its easy to buy...no competition....seems like 2010/2011 will be more competitive and ugly

urbandigs, aboutready...if prices don't go down what's your opinion on rentals, will they continue to slide or will they start rising. thanks

"admin is going to time the bottom AND sky high rates AND the subsequent opportunity to refi!!!"

lol UWSmynabe, i'm gonna try at least, all variables are rather slow moving so why not? higher rates in the medium term are a certainty. those that say "you cannot time the market" weren't even able to tell there was a housing bubble. while i was buying puts on homebuilders and mtg lenders.

so yes, i do think i have more chances to time it right than many others. i'm pissed off with the housing bubble by the way, so that anger gives me the incentive to put energy into it. other people put energy into saving on small things. for us housing is the biggest ticket item, so it pays to get it right.

btw, did you know that americans spend more time deciding which car to buy (and when) than which house to buy (and when/whether)? i'm just hte opposite.

haven't read through all of this, but interested to do so...

For us, NO. I presume your question assumes that those who answer NO are in a position to buy and are choosing not to. Our "No" has nothing to do w/ the market; we can't afford a substantial space now and have no idea where we'll be in the next 2, 3, or 5 years.

There, an answer that you weren't looking for...welcome to research ;)

congrats uwsmom! many people thought they were able to afford anything during the bubble to their peril. you are a smart cookie.

admin
"btw, did you know that americans spend more time deciding which car to buy (and when) than which house to buy (and when/whether)? i'm just hte opposite

I thought most americans homes and cars were the same thing (trailer homes) ;)

"for us housing is the biggest ticket item, so it pays to get it right. "

Hear ,Hear!
I think many will follow suit.
And one thing to consider,as interest rates rise, prices of home may continue to decline.
Let's see some quick math, on a 1 million dollar home, every extra point in interest is $833 per month. That's 300K over 30 years of mortgage. But let's say you offer 100K less for the home. I'd rather pay 100K less and deduct from my taxes the extra 1% of interest.

right, besides, you compete with much less buyers for nice homes when rates are high (which you can change, the principal you cannot). so we basically plan to skip the starter home and just buy a definite one. average "moving up the RE ladder" is 3 times for the typical american family. saving on high transaction costs is not a bad thing either. it pays for several years of renting per se.

for us the stakes are high, the better we play it, the more we can save for retirement (don't believe ss+medic are reliable for the young) and the more i can save for my kids education. what's not to like?

anyway, i'm kind of an inverted baby boomer. they think about their home price going down as "there it goes my retirement". i think about lower home prices as possible as "here comes my retirement". not cause i plan to use the house for it, but cause spending the least on housing allows me to save more $ for the rainy day.

Well I bought so that would be a yes. We were prepared to wait it out but a couple of things pushed us to buy now:

Hated renting. Landlord would not consider reduction so we were facing moving again (having just moved back to NY last year). Our 3 yr old didn't do great with the move so the thought of more moves was daunting.

We put a large amount down and have substantial liquid reserves that will see us through any unforeseen problems with employment.

Cash flow is important as our goal was to comfortably handle all living expenses on one salary so low interest rates played a role.

We found an apartment that fit like a glove with a uniqueness to satisfy our desire for a space that inspires. There simply wasn't great inventory in our price range and anything we liked seem to go quickly. Its cheerful, bright and a place that we can see ourselves raising our daughter.

And finally it comp'd out very well and I was satisfied that we were buying at a substantial discount.

Everyone and every situation is unique and I sometimes find the conviction of those saying no at any cost to be a little over the top. There are deals in every market and in the end I didn't have the stomach to wait until everyone agrees on a "correct" time to buy. Manhattan has always been unique relative to the rest of the country and so I'm not so sure we are going to follow the decline and recovery pattern of other places. With that said, troubled areas remain (non prime areas, new condos and high $ properties). If you are in the market for any of these, or if you're considering a property that hasn't been substantially reduced, or your timeline is questionable, or you're extending yourself to make it work, I would vote no as well. Otherwise be open to the possibility that there may be deal out there that fits you perfectly now.

100% agree spinnaker, it's not a 1 size fits all type of situation. needs and wants of every household are different.

We are almost exactly in the position of bring able to buy -- our buyers' bank appraiser comes today. If all goes well, we plan to rent for a year and stake out 4 or 5 buildings we like. If the right apartment comes up any time between now and then, I think we'll pounce. Only difference: we're planning to move to Williamsburg. You say it's degentrifying, and we say, great, other people will be scared away and prices will come down more! We loved the Village in the 70's -- there were junkies in the street and they never bothered us.

that's smart trinity, why paying a premium for gentrification when you don't care for it?

spinnaker1, you phrased that as well as anyone. I took the easy way out by saying "depends" but if I were eloquent, I would have said exactly what you wrote. In the end, you know your personal situation better than anyone, and that people try to give advice/pass judgment on others' decisions here makes me shake my head in disbelief every time.

trinity, any buildings in particular you like in Williamsburg? I don't know if it's degentrifying, but the hype certainly needs to die down (and has, to a fair degree) so we can live a bit more normally.

I'm not sure higher interest rates necessarily will lower prices further. That depends on when and how quickly they rise, for how long, what else is going on. But prices go up from here? Anything is possible, but more likely they'll slide a little more. I can't see a quick turnaround, but longest-term, I'm not one who sees NYC sinking into a spiral of decay. There's value here.

There isn't one solution for everybody. Overall, if you can afford to buy right now I'd vote yes.

There is a surplus of inventory, low interest rates, and negotiable sellers. This looks like a great time to buy if you can afford to buy right now.

GrahamG...you might be right......buyers still can negotiate now and there are less bidding wars...with all the hype of the home sale increase in june and bottom being hit nationally.......this may be the best time to buy...who knows.

That is the biggest advantage as a buyer.
Surplus of inventory and NEGOTIABLE SELLERS. From 2003 to most of 2008, you'll get the chair thrown at you if you make an offer that is more than 10% below the asking price. These days, any numbers thrown at the seller are considered.

infamous...very true......most brokers these days just tell me......put in any offer...even a low one....might not be the case in 6 months.

GrahamG = broker?

InFamous, aren't you looking in Williamsburg, new construction? You have nothing to worry about, in terms of timing, if that's the case.

Mhillqt, you really don't think the condo inventory that is available but not on the market and will be available this year and next won't create a glut of inventory? even if you're looking for a coop you have to be aware that an inventory glut is an inventory glut, and will affect all sectors of the market. as will bankruptcies (both individual and developer llcs), horror stories (oh how the media loves those), etc. and i guess NYC is immune to unemployment, death, illness and divorce.

The only new construction I like in Williamsburg is 80 Metropolitan. The riverfront towers are too Miami - glitzoid lobbies facing the river, ie you need to arrive in a cab or walk an extra 2 blocks all the way around the building. Others are shabbily built -- little details like where the floor didn't reach the wall.

trinityparent - "little details" that's hilarious, although a bit sadly so.

trinity, yikes! Which building(s) did you see that in?

Can't remember - they all look the same.

"InFamous, aren't you looking in Williamsburg, new construction? You have nothing to worry about, in terms of timing, if that's the case."

Yes, my wife and i are still searching in Williamsburg, but lately we've opened up our search to LIC.