What can I buy with 250k cash dp?

the easiest and quickest answer is go to a bank or mortgage broker and go through the pre approval process, takes 15 minutes and they will tell you what mortgage amount you can afford. Then figure you most likely will put 20-30% down depending on what you are buying.

thanks Mike. So 250K will be 20-30% so max apartment price between $850K - 1.25M? Pretty wide range.

I guess for $1.25M i can find decent place. But not 2BR.

i was hoping I can put down 10% and afford more space.

By putting 10% down, do you mean $250K, or less?

sure a condo will let you put down 10% but the banks probably will not lend to you at that especially with such a large mortgage.

As to location that is up to you. you can get a 2br for 1.25M all depends on what sf you want and where it has to be.

You make $270k and you think you can afford a $2.5mm home?

Liar loan, option ARM with monthly payments less than interest, credit cards for food/expense, and then use a HELOC to cover any shortfall.

I know someone who actually did that! I wonder how many others also did the same and are currently in the foreclosure process, living rent free, with no regrets.

zzz: the fact that you make a very, very good yearly salary and the fact that you have substantial savings --enough to put down a quarter of a million dollars as dp-- yet you still can't safely purchase a decent 2 bedroom, family-sized apt to befit a normal, non-excessive lifestyle, is a prime example of how ridiculous the disparity has grown between prices and income. Prices must-- and will-- come down.

That said, if you go forward, I would suggest the conservative approach in these volatile times which would mean under a million --you must have a conforming loan. Consider that you risk about 10% transactional costs when you sell and perhaps another 10% on principal (see comp threads) so it would be best to keep the price down to limit losses. Or rent until prices come down and build some upside into your purchase.

Currently, the govt is inviting you to screw the tax payer and will allow you to purchase in certain troubled buildings for 3.5% down and get a conforming loan. But be aware that each of those buildings has it's own set of problems and risks.

Here's a different take z

1/4 mil isn't much in the most coveted, expensive city in the U.S., or the world for that matter. That unique distinction WILL NOT CHANGE. Having said that, there are plenty of cities you can take your money and buy all cash and live mortgage free. Those options are out there. I'm not sure what the rule book says about the definition of affordability here in NY. You make decent money and if you rent and save more you might very well find your flashy 2 br with the 20' lobby fireplace and rooftop tiki bar. Out saving the pace of the expanding bubble was out of the question before, not anymore. Welcome back to normal. Take a chill pill, be patient. But if you insist on buying now I would keep it under jumbo, which puts you at $1M. There's 350 2 br condo's in Manhattan currently for sale for under 1M. That's a respectable 20+ down where you should be able to find a decent underwriter and super cheap rate.

I wouldn't get a mortgage more than 3x salary if I were you -- and make sure that $250k leaves you with plenty in other savings. Assuming it does, and assuming you use the whole $250k as a downpayment, that means you can get a $1 million place. Notwithstanding apt23's lament about affordability, you can get a sweet place in prime Brooklyn, and probably a decent place on the UES a bit east, for that sum of money. If you equate NYC with 25 square blocks of the UWS or prime UES, however, yes, it might be tough.

To reiterate spinny's point, you can afford $1M easily, $1.25M with a little stretching. The issue with $1.25M is that puts you in jumbo land. If the conforming loan is in the range of 4.5%, and the jumbo is 5.125% say, then the first $750K ($729K, actually) costs you 4.5%, and that last $250K actually costing you 7%. Now, 7% is really expensive money.

zzz, some good news for you:

http://money.cnn.com/2010/08/12/pf/taxes/bush_tax_cuts_almost_rich/index.htm

Many people I know have an aversion to things above $1M because of the mansion tax, which amounts to $10K at that price. However, if you think about it using 20% down, the mansion tax is the least of the issues. At a $900K purchase price with 20% down, you get a 4.5% loan for $720K, paying $32.4K interest annually. At a $999K purchase price with 20% down, you get a 5.125% loan for $800K, paying $41K interest annually. That last $80K costs you $8.6K in annual interest, or 10.75%!!!

What is the present value of 6% extra interest on $80K for 30 years? Something like $100K. Of course there's an early payment option on the loan, so it's probably actually of lesser value. But the point is that people sweat over $10K at a certain price boundary, when the real sweating should be over something much larger at a very nearby price boundary. Yet another example of mesmerization by monthlies?

Do others out there see a much stronger aversion to the mansion tax than to jumbo loans in people looking around the $1M price point?

>> Out saving the pace of the expanding bubble was out of the question before, not anymore.

Excellent point, spin. I don't think a lot of people have adjusted to this yet.

I appreciate the responses. So consensus seems to be stick to $1M house max to avoid mortgage above 750K.

I guess in my head I would assume $1M would get me a decent house but I am not finding many - unless it is a 1 bedroom which is too small for my family. Unfortunately, my wife does not want to move to brooklyn so looks like renting is the only solution to stay in Manhattan. But for me to rent an equivalent nice place to what I want in a purchase, the monthly is close to $6K / month. Seems high vs. what I would pay for an interest-only mortgage for a $1.2-$1.3M house.

Rhino86 - No, I did not assume I can afford $2.5M home. I was hoping to look up to $1.3M but with only $250K, that leaves a mortgage over $1M which, according to the replies here, is not advised.

inonada- can you explain this 7% rate figure? Is that on a 30-yr fixed? Bankrate shows 7/1 jumbos for 4.125% in NY metro area.

I do not see why I would want 30-year fixed if I do not plan to stay past 7 years. Seems to be only in case I could not sell within 7 years but the amount of extra payment would likely be more than the lowered value of the home. Outside of a complete crash in which case I would be screwed anyway.

Ino: I have found that 30yr fixed requires 30% down even if you have excellent credit and mega savings. And is more like mid fives apr.

zz: plenty of people are doing the 7 yr. but your options will be severely limited as the time line expires. Consider that right now there are many people who are sitting on their apts hoping for bigger returns or because they have few other options. If their 7 yr time line had expired directly after lehman crash, they would have been adversely affected and perhaps forced to sell at a big loss.

You can't easily afford 1.2mm. You can easily afford 900k. And until you can buy a 6000 rental for 1mm yes you should rent.

And your income is lowish for a 6k rental.

Rhino - well I'm paying a little over 5k/mo now for a 2br and living pretty comfortably w/o cash flow issues

50 Franklin has a 6K rental on 18th floor. Their condos are selling for 1.4M on lower floors. Seems like it would be cheaper to rent that 6K/month apartment.

Eh it is what it is. 50x is a rule of thumb.

Let me iterate that it is absurd that your income/dp is not enough for a decent family apt. This disconnect between income and prices is the the so-called bubble and I expect that it will be eliminated in the long run. Take that into account when you are buying. As for the argument that NYC is the most coveted place on earth it sounds bs. In late 90s the economy was good, employment was down, taxes were lower, rates were low and NYC was coveted alright but prices were about half of today.

Wait, did someone forget that NYC is expensive? There is no disconnect here.

2br co-op < 1M?

Not enough for a decent family apartment? Where? In the 5 most expensive neighborhoods in NYC? licnyc, maybe you should of all people might realize that OP could buy a 3 bed/2 bath with two private terraces at the Foundry building in LIC for less than a million. Or a 4 BR freestanding house in prime Forest Hills. You really have to measure "affordability" by metro area, not by a city's most exclusive neighborhoods. It's like, cry me a river if you want to live in LA and can't afford Brentwood or Beverley Hills.

ZZZ:

There are at least several lenders in the markey that will lend 90% or better, incluing M&T Bank. The
best is SONYMA, State of New York Mortgage Association, which you might be aligible for if you are a 1st
time buyer (tho possibly not if price it too high. I dint know if it has a priceceiling). SONYMA loans are at below market interest rates, are require only 1-3% down from buyer. Most local banks are SONYMA
lenders.

You might also consider a 5/1 or 7/1 ARM, as today's ARM only cost a forefinger, being the 3's.

The foundry building in LIC? We said decent not dump. Give me a break. Median household income in Gramercy Park is 90K and average 147K. I would assume that a 270K salary should buy a decent 2br everywhere one likes.

You think that 270K salaries are easy to come buy. Well wait and see.

zz: no, they are asking $1,495K for the apt. But it just recently closed for just over a mil. So that is the comp. Others closed for slightly less.

18B:
12/03/2009
Previously Listed in StreetEasy, already in contract, by Prudential Elliman at $1,295,000.
07/30/2010
Previous Sale recorded for $1,099,710.
08/03/2010
Prudential Elliman Listing is no longer available.
08/12/2010
Listed by Prudential Elliman at $1,495,000.

zzz, I'm not talking about fixed vs. ARM, but rather the Freddie/Fannie subsidized rates vs. jumbo rates and what happens at the crossover.

Suppose you can get your 7/1 jumbo at 4.125%.  Suppose the conforming version of the same is at 3.625% (I'm just making this up for illustration).  If you borrow $729K, you can do so by paying $729K * 0.03625 = $26.4K interest.  If you want to borrow $730K, you must pay $730K * 0.04125 = $30.1K.  Borrowing that last $1K cost you an whopping $3.7K annually.  The effective interest rate on the marginal $1K is 370%.

As the amount you borrow goes higher and higher away from $729K, the effect is less pronounced.  I am just saying that there is strong incentive not to borrow more than $729K if you find yourself in that neighborhood.

"Ino: I have found that 30yr fixed requires 30% down even if you have excellent credit and mega savings. And is more like mid fives apr."

Good: I was getting kinda tired of paying the bill on other peoples' losses ;).

Get it straight people.. NYC purchases are not overpriced because of the high prices themselves ....Purchasing in NYC is overpriced relative to renting in NYC. Rents are what they are... Although its kind of interesting that rents are what they are... and what they are is equal to 2000 rents.

flamozzzz.... zzzzzbuyer

apt23, inonada reminded me, if you do the $243K paydown on the $1.1MM, you are within spitting distance of the $729K conforming.... oh and I'd wait.... nothing like an inverted yield curve to make bankers pay you to borrow...

http://streeteasy.com/nyc/sale/546340-coop-40-east-80th-street-upper-east-side-new-york?email=true

as an aside, the xtra $243K could come in handy in a bid for the above 50% down apt... IMHO... cash is king once again. Bye bye signature overleveraged lemmings...

another way to look at the xtra $243K is, if it allows me to bid $1.8MM on the above w/o any financings and it puts me ahead of the $2MM bid with $1MM financing, the $243K is an immediate 100% return... lots of ways to look at one's cash....

Prof W67,
Would you please splain the "$243K is an immediate 100% return" thing?
dank

I think he means its 100% return of the 100% he's sure would be lost on it if it were to be used for a downpayment in today's market. Or its 100% that would be made on it eventually if one were to invest it at the lows he anticipates.

Thanx, Rhino.
I kinda thought that's what he meant. I find this true for me: since I still haven't bought anything, I'm accumulating cash.

I wouldnt mind buying early before the bottom if I knew I was saving monthly vs rent but thats just not how the math works right now...unless of course you use bad math...and that's just not how I roll.

Me too, Rhino. I really want to buy a place, but, when ya look at the prices, market, economy, it makes sense to wait.

Yeah but what about the tax deduction?

tax deduction is not a primary issue for me. Besides, think they might phase it out.

Dwell/rhino. Sorry about lack of explanation on the 100% return, I was fudging the numbers a little. Apt23 was inquiring about chasing a lower mortgage rate with an addl $243k into the pool. To 'me if you are in the rarified mkt of 50% or 100% down coops in NYC, The addl $243k in cash can effectively let you negotiate an addl $243k off of the asking price. It's very similar to inonada's example of the $1k loan difference making your interest expense $3k/yr more expensive. Cash is king. Long live cash!

Yeah but what about the tax deduction?

thanks w67, I'm taking you shopping with me when I get ready to purchase NY RE. I have to take another look at it all. It is giving me a headache. I love cash. I don't want to pay down the debt. I like the idea of the bank sharing my risk. and though that ino example was very exciting, i am talking about my miami apt and conforming is way low -- in the $400's, so i'm not in spitting distance.

dwell> tax deduction is not a primary issue for me. Besides, think they might phase it out.

far be it from me to believe any politician but barney frank has written and spoken about how it is impossible to rescind the tax deduction on mortgage interest. Most americans have based their house purchase -- the biggest assest in most peoples lives -- on that deduction and to take it away would be the equivalent of telling a 65 year old they are rescinding 100% of social security. Can't be done if a pol wants to stay in office.

Thanx, Prof!
Yes, cash is king, but I worry about the USD being devalued like Weimar marks.

Apt 23,
I agree with you, but the gov is sooo cash hungry, who knows what they could pass, esply if they consider you to be "rich".
ie: no mtg deduction if income exceeds $200K or $250K

Ever watch House Hunters? Houses and townhouses in Atlanta (or wherever) that are like $175K or $200K? I'm thinkin Gov would keep the deduction for those homeowners, but maybe not for higher income folk.

Going off topic, but, I read this & wonder if I should invest my equity into this society. Also, perhaps as the population gets poorer, there'll be diminished demand for the mtg deduction. Just trying to read the tea leaves:

http://www.guardian.co.uk/world/2010/aug/15/jobless-millions-death-american-dream

"America appears to be a society splitting down the centre, shattering the middle class that long formed the cultural bedrock of the country and dividing it into a country of haves and have-nots. "A once unthinkable level of economic distress is in the process of becoming the new normal," warned Nobel-prize winning economist Paul Krugman in a recent New York Times column."

dwell: for the people who own homes now and based their ability to pay partially on mortgage deduction, the govt can't rescind that benefit -- it would be equivalent to rescinding contract law. Now, if they want to rescind mortgage deduction for future buyers, that is another matter. But I would think that if you buy a house now with the govt agreement in place, you would be protected. I think that was Barney Franks point. Just as SS benefits might be reduced for people born before year X but would not be reduced for people who are nearing retirement and based all their financial planning on a contractual agreement with the govt to receive SS.

Ino: While I have known about the costs of interest theoretically, your two examples above are very, very informative. Mind altering, actually. Thank you. SE, give this man a raise!

Appreciate the responses here but seems like these boards always tend to lean toward waiting to buy. I mean at what point do the really bearish folks get involved? 500 psf? 600psf? I just don't know if I see Manhattan falling to those levels. FiDi is closing deals at 800 psf. But to live there I'd need 600. Just doesnt seem like supply in other neighborhoods is such that prices fall that much. I mean if any apartment in decently located UES / UWS fell to 800-900psf, there would be hundreds on this board alone running to buy. So your only way to play is to take the risk at 1000-1100 psf and worst case have enough cash flow to withstand the dip to 800-900.

Looks like I need to research the outlying areas of Chelsea and east of second ave UES or Riverside UWS. There are a few coops at the 800-900 psf level that only need 20-25% down but not sure I would be desirable to a board since I dont have 7 figure assets in the bank. In my early 30s which also may not help.

NYC real estate buying really sucks.

apt23, thanks for the kind words.

You're beginning to get it z.

1. It's not fair.
B. There is healthy buying now even with the sucky inventory.
3. People are waiting to ambush the fresh fall meat (see B)
C. In the remote chance we see further declines they will be met with more buyers, their numbers directly proportional with the % of decline, minimizing same.
V. You picked a shitty town to become a first time buyer. Keep saving. Your apt won't likely inflate away from you.

zzz, if you are looking at co-ops you are good with most boards around the $1 mm range. (I'm assuming $200K down, borrowing $800K at 5%, paying about $4,000 a month in mortgage payments and around $1500 month in maintenance -- so annual housing costs of $63K of a $250K income.)

So you're probably looking at a four-room apartment (LR,Kit, 2 BRs) with possibly just one bath.

You can push it harder, depending on the builing and your broker's skill with a co-op package, to around $1.1mm or $1.15mm, but I wouldn't go all the way to $1.2mm. That doesn't feel conservative enough to me.

ali r.
DG Neary Realty

bubble? what bubble?
http://streeteasy.com/nyc/sale/546041-condo-1619-third-avenue-yorkville-new-york
2/2003 sale for $484K, 8/12/10 listing for $1.2MM, yes that is a bubble..... hey apt23, when this hits $500K again, your $243K in cash and $250K loan will get you 3bdrm pied in 3rd, yes it's a little far north but... maybe a little better than a 100bp swing in your mortgage in miami, no?

Lots of ways to look at cash.....

Even if you dont expect prices to fall much..still failing to see whats attractive about manhattan apartments when you can rent much more cheaply.

Rhino: this apartment rents for 4300/mo

http://streeteasy.com/nyc/rental/665025-rental-215-east-59th-street-lenox-hill-new-york

Can I not buy a better place for $1.1-$1.2M ??

that cost apartment would cost me $4-5K / mo I think. Seems rentals are good in that I dont take the market risk (nor participate in upside, if any) but the quality apartment is less.

I will look for more rentals but seems equivalent quality would cost me $6K

Maybe I am wrong and thus why I asked for some help here and appreciate everyone's input

The sales history on 1619 Third Ave is weird. There are two separate transactions for different amounts recorded on the same day in 2003 (same seller, different buyers -- husband and wife, maybe?). I think the likely 2003 price is the two numbers added together, but it's hard to tell.

Then again, there are a ton of transactions around $350/square foot in this building around that time. Maybe I'm jaded by the past seven years of NYC pricing but that price seems low even for early 2003. Was this some sort of income-restricted (Mitchell-Lama?) condo conversion?

I'd be really interested to see examples where you can buy a unit for cheaper than the equivalent rental right now. Looking at most condos, folks trying to rent their apartments out all seem to be doing so at a significant loss if they bought anytime recently.

zzz, there are basically three populations on SE:

there are those who are more or less bullish, and this includes most of the brokers on this site, and most people who've bought in the last year. (I'm actually in both camps). According to that population, what you can buy will be better than what you can rent, so if you stay employed and can "hole up" in your apartment for a few years if the economy stays bad, you should probably buy.

there are those who are more or less bearish, who feel that the macro situation is so lousy there "should" be another 20-30% decline in the NYC real estate market. Most of these bears thought this drop would have happened by now .. but are still convinced it's coming. To them, you shouldn't buy because you're running a strong risk of having your 20% DP wiped out in the next couple of years.

Hopefully the back-and-forth between those two camps provides some illumination to the third camp, which is those who are thinking about buying, and come on as you did to see the point/counterpoint, and maybe ask one or two technical questions along the way.

Good luck!
ali r.
DG Neary Realty

I think the issue here is the risk you assign to your investment $$$ into a down payment, given that it is a highly leverered equity investment. I am not sure why you chose $1.1mm vs a $4300 rental. The only way buying make sense is if you assume zero risk and put down 25%, forgetting about transaction cost and forgetting about risk adjusted opportunity cost. Or you can be very simple minded and assume under 15-16x rent is a reasonable buy. You can't buy a $4300 rental for $820k. Neither can I buy my $5500 rental for $1mm.

i firmly believe that no one who is buying now actually believes that they are running a risk of losing any money. they may say they are but my bet is that they have rationalized away any possibility of a loss much less the magnitude of that potential loss.

here is a poster concerned about the difference in rent between $4,300 and $6,000 yet talking about buying a place in the $1 million + range. i don't think this person or others is willing to consider that a mere 15% loss of which 10% is transaction costs is $150,000. That same amount of money pays the difference in rent for seven years.

and that assumes no significant new macro economic bad news.

Ali -- contrary to what you say, most of the vocal bears don't rely on the macro situation at all. It's the bulls who portray the bear thesis as "armageddon" and then claim that since the world hasn't ended, prices won't drop.

The basic bear argument follows Shiller. It is almost purely micro: current prices are the result of a bubble and bubbles don't last forever. Market prices reflect supply and demand, and over time the supply and demand curves converge at marginal cost. In NYC, cost is the lower of the cost of renovating/building or converting a rental (i.e., selling a condo that is currently rented). The argument is basically that so long as prices are above cost -- so long as investors can make more money by selling than by holding to rent -- investors have a tremendous incentive to create more supply -- by converting rentals and offices to owner-occupied. More supply brings prices down.

In the medium run, rental value and sale value will converge, regardless of how the economy as a whole is doing. Since rents seem to be in line with costs (new rentals are still being built, landlords are making profits), convergence is more likely to be by prices dropping than rents rising. If the recession continues or worsens, or if the finance industry is forced to cut back, price declines are likely to happen faster; if inflation makes rents rise, convergence might happen with less (nominal) price decline, but basically the bear case is that -- independent of the state of the economy -- prices are going to drop, probably quite a bit.

Z: As you are pricing your relative costs in renting or buying, you should assume -- unless you have a crystal ball that tells you that the usual rules of markets have been repealed -- that prices will tend to drop until **investors** are indifferent between holding indefinitely to rent and selling, using standard financial calculations. The adjustment is likely to be long and slow, but if you need to consider resale value, you should assume that the most likely resale value is the value to a rental investor (or, in the case of a coop, a rental investor for a comparable unit -- there are enough units that can go either way that price gaps between comparable units are unlikely to be stable or long standing).

Bubbles can last a long time. But when you buy at the tail end of one, you would be extremely foolish to ignore the strong likelihood that eventually it will deflate.

Note that when investors are indifferent, owner-occupants will always find buying cheaper than renting. First, they get the mortgage deduction tax subsidy, which investors don't. Second, many owner-occupants underestimate the cost of their downpayment, since they usually compare it to much safer alternative investments.

" $150,000. That same amount of money pays the difference in rent for seven years."

Is that with or without paying a broker fee upfront? If without, the monthly rent is $1786.

Jim_Hones, with your standard 15%, what would it be?

finance guy, thanks for the clarification on the bear thesis -- it's tough for me to make, because it's not my case.

I just have two points: one is I'm not sure I believe that rents are currently in line with costs. I'm not expert enough to know, but I think the new rentals being built are on lots where the foundations went into the ground right before the tax subsidies changed -- I'm not sure anyone is building ground-up rentals on unsubsidized foundations now.

But secondly, you say "if the recession continues or worsens" -- I know it hasn't officially been called yet, but the recession is *over.*

1Q GDP growth was 3.7%. 2Q GDP growth was 2.4%. We may be in the middle of a jobless recovery, a recovery that's under expectations .. but we're still in recovery.

Whether that's going to trickle down/through to real estate, no one can say.

ali

oh jeeez... a borker calling this recession over? flmaoz.

japan just came out w/ Q2 numbers at .10% GDP. or .40% annualized, as to your above US GDP was "hacked" from 3.5% to 2.4% (as actual export # came in way way way below estimates), we have a few more revisions to that GDP # to go.... and we just cut off the tenuous life line for 1,000,000 99weekers.... there is about an add'l 400,000 month additions to that number to go for the foreseeable future till we hit 10,000,000..... tell me how this all plays out?

i love when people say that rents (prices) need to be in line with costs. demand? oh, who cares.

dnfcc

At what point were rents in line? I bought a place in (I think) early '04. With 10% down, my mort & maint were about 15-20% less than comparable rentals in that building. So, I guess I was lucky. But is there a documented time that is considered to be "right" to buy (compared to renting). For the record, I sold that place, rented for a while and bought another.

That seems off. What were the numbers?

ali, always wonder, did you sell your house on long island? when if so?

Hm, obviously I was wrong about bears not arguing from macro. I should have said, The strongest bear arguments don't require any macro pessimism.

CC: The bubble argument is that prices can't stay above costs indefinitely **regardless of how strong demand is.** I assume that's where we are now: demand is strong and supply is slowly catching up. In the medium run, supply will catch up with demand and prices will drop until investors cannot make money converting rentals to owner-occupied. (See Stuytown)

But the bubble story is asymmetrical. Demand matters enormously if it is weak. If jobs disappear or individual buyers or banks get too pessimistic about the City's future, demand falls. If demand falls enough, prices will drop below costs, owners will convert to rentals instead of from them, and only demand, not costs, will matter in determining how far down prices go. That would be a good picture of most of the NYC housing market during most of the period from, say, 1930-1980.

Bubble-based micro models suggest something like 2000 prices (plus inflation), assuming that the recession is basically just a blip in a generally successful macro story. 2000 prices make sense given a healthy NYC economy, continuing high levels of inequality and upper income success, low crime, etc.

People who think that the era of gazillion dollar finance bonuses is over, that BigLaw is done for, that professional jobs are not coming back, or that the government is so incompetent/malicious that the end of capitalism is nigh, should be predicting far greater price drops than my bubble story predicts.

Serious macro pessimists -- Mish or The What or Julialg -- should be looking at 1973 or 1933 or Detroit.

to zzz buyer:

I'm a real estate agent that has come across an amazing investment opportunity that is right in your price range of $1.2 Million if you get in before September. For a 2 bedroom 2 bath (1166 sq ft) luxury condo right on East 14th and 3rd Avenue - 123 Third. Unit 3A would be perfect for you. It's going for $1.285M and you can expect the value to increase a good amount by next year. I just got a contract in for one of the units with a client - 11B. I've had my eyes on this property for awhile and was excited to see a tucked away Sales Office on East 9th. I was able to visit with the Sales Director alone and got a preview of this awesome new development. I was really impressed by the quality of the units, as well as the building. The floors are beautiful, real solid wood floors that you can stain any color, not some engineered wood. All the fixtures are of the highest quality. This really pushes the envelope in luxury living in this area.

The interior finishes are of equivalent quality of a $1700/square foot place and is selling at $1100/square foot right now before the official launch in September. At this point, the developer just wants to break even so he's releasing the unit pre-sales at this incredible deal. Just last week, the developer raised the prices $10K across the board. It will continue to do so until the final release of units in Spring 2011. If you get in now, especially before the official launch and marketing to the brokerage community in September, it is predicted to earn about a 25% return fairly quickly!

This location is a no-brainer - you are right smack in the middle of 4 of the most desired neighborhoods downtown: Gramercy, East Village, Greenwich Village and Union Square. The value will keep going up, as more luxury properties go up. With 2 Cooper now in leasing, they are renting 1 bedrooms for 575 square feet at $4200/month. I was telling my client he could probably rent his 650 sq ft 1 nedroom unit at 123 Third for about $4000/month. You will always be able to rent any unit in this building, if you choose to do so.

Another good investment is actually in Williamsburg - Northside Piers and The Edge, all luxury waterfront properties with killer views of Manhattan. Or any condo in Prime Williamsburg area really, lower common charges, more space and only 1 stop over from Manhattan. There is so much retail and residential development that has picked up since the economic slump, this would be the perfect time to get into this neighborhood now, at the beginning of it's real rise. If you choose to rent, it would rent out in a heart beat. The demand for Williamsburg rentals is incredibly high right now and not enough rental opportunities.

I'm happy to answer any questions or concerns regarding these opportunities. If you're up for taking a chance, I think you could win really big with the investment opportunities I mentioned above.

All the best,
Phillia Kim Downs
pkimdowns@gmail.com
240.603.7376

W67? Where are you?

This is gonna be fun... Where's my popcorn?

This is all to funny. This started off as a simple question of affordablility. now we have some broker talking about investing on spec in this market or maybe i am not understanding. 123 third the way described sounds as if it is not even in official sales showings. then they move on to williamsberg and talking about the edge where they are chopping prices left and right and saying it is a great investment?

when i first started reading a few months these boards they were so much more informative. It seems now every valid posting question is hijacked and turned back into why you should not buy, if you do buy you will lose 20%, just rent, etc.

While i do appreciate people giving advice, nothing seems constructive at all anymore. It is just people writing the same thing all the time.

but while i never really agree with the bears, Philia, what you are suggesting is nuts, the guy has a family and is looking for a place to live not an investment.

I think W67 really gets to the heart of the matter:
2/2003: sale for $484K
8/12/10: listing for $1.2MM
Asking prices are still too bubbly.
Check to see what the apt sold for prior to the bubble. When you see numbers like those above, you know we're still in the bubble. Purchasing at bubble prices is a bad move.

Note: W67's example is for Ruppert Yorkville Towers & the 2003 price was probly an insider price for conversion when they opted out of Mitchell Lama. Nonetheless, IMO, the $1.2MM ask confirms it's a bubbly price.

Can a bull explain to me why Manhattan was relatively affordable in the late 1990s against a pretty strong economic backdrop...and as such, why I need to be a macro bear to be a bear on the price of ownership relative to the price of renting? Thanks in advance.

@MikeW - I was just throwing out a couple opportunities that my associates and I are excited about, that's all. I was not aware of his situation (family, etc). So I can understand your point of view and that this is something he is not be interested in. I apologize if I offended anyone. Was just sharing info, that's all. Reading this board, I'm pretty impressed at how knowledgeable and savvy everyone is in regards to real estate.

I heart you, finance guy. Well reasoned.

w. 67th, record corporate profits of $1.37 T in 1Q 2010. I bet you a steak you buy within two years.

Not admin, we sold the Long Island beach house in 2008 in order to buy on the UWS summer 2009. Kept the Midtown condo as an investment property -- eventually it might be my office or a way to house our elderly parents if they need to be in Manhattan.

ali r.

I just have two wishes, for 1) world peace and 2) NYC real estate to become affordable so i can continue living here once i start a family.

Also, please show me one real state broker who is not excited about a potential opportunity they are working on and do not want to share it with the general public (as a follow up to the above post). I spoke with a BofA mortgage person regarding williamsburg condos, and on their list its 4 out of 5 risk area.

But to get back to the original question, with that much dp funds, I, as some people in their previous posts, would agree that you dont want to put the entire amount for a dp. i would argue to leave a good portion of it for a rainy day and if you do decide to buy, make sure to keep the place for at least 8+ years as it seems you will not be able to resell with profit/or break even. Just be careful my friend. If you put down $200k/20% (per banks requirements), you can afford 1mm mortgage, or roughly 4.2k-5k/month i would think +++ taxes and maintenance. so it doesnt end just with a mortgage.

google has a good tool to use to figure out your mortgage https://www.google.com/comparisonads/mortgages?s=1&schema=mortgage&q=google%20mortgage%20rates#ti=2

I decided to wait on my condo purchases because of so many mixed news and just does not seem like the right time to buy, at least in the NYC area. prices are just too inflated.

Thanks MilkyWay. I am still a bit torn and so far really have not found anything to my liking for what I can afford and so I may end up continuing to rent once my lease is up. Or at a minimum do a month to month for a little while longer. I am trying to not get bit by the fear bug that one could easily get by reading some of these posts. I mean, no one is going to ring a bell for me when it will be good to buy. Housing is cheaper than it was in 2007 but still well above 2003 levels. But absent a depression, I do not see why people will sell at prices too much lower in nice areas, If they were not forced to in March 2009, then it would like a nuclear bomb for someone to have to sell here. And I think I would not be in good shape in that case in any event but I do not think I can live always planning for worst case scenario which is always a possibility.

That said, I do not plan to stretch to get a house as I like to have positive cash flow to be able to afford other things and, as you say, my dp money is not all my savings. I will still have a decent amount left over even though it is always odd to see your bank account have 200K less!

pkim: I appreciate this listing but I do not want to be rushed into buying because price will rise $10K. Plus it sounds like the apartment will not be ready for some time.

Here is an example

http://streeteasy.com/nyc/sale/500883-condo-2-bleecker-st-noho-new-york

this is not my style but still a lot of space. The owner drop price by 300K! Just like that. And only 3-4 month ago.

So now it is prices at 1200 psf. At what level is this a "bargain"? $1.5M? I am pretty sure at $1.9M someone would buy it and to me that still does not feel cheap.

Then this one:

http://www.goldcoastcapitalresources.com/clinton.html

1688 square feet for only $1M (592 psf) and yet no one wants it because on 46th and 10th ave.

zzzbuyer, you are a financial retard.

you would choose $2.3MM zoned in a pedophile only district
http://streeteasy.com/nyc/sale/500883-condo-2-bleecker-st-noho-new-york

versus $2.5MM on 5th avenue?
http://streeteasy.com/nyc/sale/546330-coop-1035-fifth-avenue-upper-east-side-new-york

WTF r you smoking?
1) The RATIO of value in NYC is immutable. CPW/5th Ave (on the meat of Central Park not above 90th in CPW and 96th on 5th) > Bowery.
2) 3-2009, nyc re didn't capitulate = > NO BUBBLE?
3) Hey if i wait till it hits $1.5MM, then everyone else will buy it before me? Whose team r u on, you fking just negotiated against yourself!????
4) Do you look at a 30yo porsche junker asking $15K, and think a 1997 Porsche Boxster in need of $10K in repairs asking $20K as a "Bargain!"?

F'k I wouldn't let you manage my $50K cash drawer much less my kid's Lego trust fund. You have NO business buying in NYC. Got one kid, gonna have another? Private School? Public School, Scarsdale?.... now go make me some copies.

Im pretty sure gold coast cap resources is kaish taub, same owner/developer as 2 bleecker (aka 316 bowery)
Suggested reading before any dealings...
http://streeteasy.com/nyc/talk/discussion/20339-sale-at-2-bleecker-street-2
http://streeteasy.com/nyc/talk/discussion/9279-316-bowery

I totally hear you about ringing the bell and notifying you about the right time to purchase. I was in the same situation about 1-2 months ago. I actually checked out Edge in Williamsburg and started the pre-qualification rolling. Although I loved their units and the Manhattan views (they are simply amazing at night), i (along with my gf) decided to postpone with the application process for various reasons I read about online. There will be a good number of layoffs in the public sector of NYC this year and/or next year, there are something like 4500 empty condos in the city, there will possibly be even more layoffs in the private sector (like last week some major ibanks in nyc had lay offs), and on a macro level, dow jones chart looks similar to the 1929 crash and in the long run, seems like the economy may not be fundamentally sustainable at these levels + the talks of deflation. so all these signs pointed to "wait", at least in my opinion. just too much uncertainty. and forgive me if something i mentioned is not accurate, these are just the facts i remembered of the top of my head...

also, this is my personal opinion, and i think may be a bank requirement, but your mortgage may not exceed 50% of your income. so i personally would not buy a place for which a monthly mortgage payment will exceed 50% of my income. but this is just my opinion...

> last week some major ibanks in nyc had lay offs

do you know which ones? i've seen a couple of neighbors at home during the week instead of at work, and wonder whether those layoffs already started

pkimdowns states "The interior finishes are of equivalent quality of a $1700/square foot place and is selling at $1100/square foot right now before the official launch in September."

That is the financial equivalent of a Madoff sales pitch. Hey, I know other investors wanna come in on this deal at $1,700 per share, but since we belong to the same Beach Club and "I like you kid," I'll let you in at $1,100/share.

Oh Lordy, a two week course "professional" telling zzzbuyer how to sink his hard earned $250K..... but then again he just negotiated against himself... -shrug- It's a tossup (making juggling hand gestures) btwn which ninny starts the bubble again... my money's on them having hot sex at an open house, zzzbuyer opening a re shop, pkimdowns being his #1 ho.

@notadmin, i saw barclays in the news papers, also one or two other major once. i think it might've been rbs or credit suisse? i cant remember.

Uh -- that one at 1035 Fifth lacks a proper dining room. w67, what kind of animal are you?

just one post regarding wall street jobs http://landcolttrading.typepad.com/blog/2010/08/wall-street-jobs-fall-to-lowest-levels-since-1993.html?goback=.gde_2483397_member_27357012

w67: i said the bowery place was not my style. I used it as an example, it just happened to be on the front page of streeteasy. The point was they dropped it down $300K to 1200 psf. I asked what price you thought it was cheap. You just prematurely went into a rant for some reason. You dont need to tell me 5th ave > Bowery.

thanks milky, one of my neighbors was from merrill now BAC

".... now go make me some copies." Youch!! teeheehee. You want fries wit dat, boss?

zzz: I think part of the point W67 is making is that your approach to buying RE is, well, off kilter & kinda wrong. IMO, you're not viewing it correctly. There was a BIG RE bubble & it is slowly, slowly deflating. You seem to look at bubble prices & if they drop, you wonder if it's a 'good deal' & whether to 'buy now or be priced out forever'. Just because prices are down from the bubble height does not necessarily mean it's a "good deal".

IMO, I think you should read RE investment books & learn about RE cycles. The cycle we are currently in is that of a deflating bubble. I'd hate to see you get hurt by an unwise purchase.

dwell - thanks for the calmer explanation. I am not worried about being priced out forever at all. I purposely did not buy a place in 2006 for this reason even though I came close and ended up selling the contract. I checked last night and that condo which sold for 1330 psf in 2006, is now trading at $1130 psf. So even though I had to pay $5K in legal expenses to get out, I save about $130K (at least). That is real money.

But as you say, just because prices have fallen from bubble height does not necessarily mean it is a good deal. Yet the point of that post was to determine what is considered a good deal. Is there a certain price per foot? If there is a magic number, then I doubt it goes there since that is a target everyone will be looking for. But I still am interested in what people think is reasonable. The other measure is buy vs. rent. This is where I have some issue as I have not found it necessarily cheaper to rent the same quality apartment than what it would cost me in mortgage + tax + cc's. The only thing that makes renting cheaper is if I assume RE falls 1-2% a year for a very long time.

you seem to be looking for a concrete answer to a question that is only answered based on people's opinions. the price for real estate is determined by what someone will pay for it at a point in time. that decision is based on many factors that are not quantifiable.

up until 2008, there seemed to be consensus that future prices would at worst be up a little but under no circumstances be down. presumably most of the people who are currently buying believe that this is true again. i personally disagree with them but that doesn't make me any more likely to be correct than they are.