now

may go higher.

i agree....thats what happened after 9/11......

a lot higher. and soon.

Yeah, real estate is flying higher. All of finance is fucked. Top marginal tax bracket will be over 50%. Unemployment over 10%. Buy, buy, buy!!!

a lot...and more...quickly

but i would only buy at a lowball offer!

you gotta to be in it to win it!

lol

lol is the word to describe real estate and us crazy manhanttanites who want to get a bargain!

With all my respect, sometimes I get the feeling that (some) RE brokers do not wish to accept that the market could go any worse or just remain down for a while. They have the same feeling of any marchand on his/her mercandise: how would they accept or sponsor a sensitive trend toward lower prices or slow market, all of which directly affects their pockets? They have to denied it or announce (no matter how disconnected from reality) that today is yet the right time to proceed...it's a normal survival unconscious approach to the situation...how do we separate accurate information from interested opinions?

You distinguish accurate information from self-interested opinion by looking at the facts, and evaluating whether the sources of those facts are reliable (or reliable enough).

The official local unemployment statistic is expected to hit 10% soon if it isn't there already. Lots of indicators suggest things are going to get worse around here. Read the business pages.

I don't think the 9/11 horror is particularly relevant to today's situation, for many obvious reasons, including the fact that this is an international recession (a depression in some areas) and not a local phenom in the context of a strong national economy.

Everybody wants to find the exact bottom of any market, but that can only be seen clearly in hindsight. Therefore no one can do market timing perfectly, it's delusional to think you can.

But given that so many indicators are still trending downward, I personally expect prices in Manhattan to erode further over the next six months at least.

{Manhattan real estate agent}

im not a realtor but can say that pricing is down about 10 to 15% and my lowball offers are being matched by sellers who lower prices to perhaps meet half way....i feel that there is 'negotiation' possible lower pricing now.......not sure if that will be available later in the year or next year.......perhaps pricing will be lower next year but then there will prob not be any negotiation room on pricing and there will be bidding wars...which im not seeing right now...

Mhillqt, your statements make absolutely no sense. That would lead me to believe you are, in fact, a realtor. You say "...perhaps pricing will be lower next year but then there will prob not be any negotiation room on pricing and there will be bidding wars...". Look, dimwit, if pricing is lower that indicates that supply is not being met by demand, otherwise, why lower your price? This joke that sellers will lower their price, say, 10% and then will emphatically declare: "but not a penny less!" and stand their ground is laughable. It's akin to that desperation move from you realtors that one sees from time to time in which they suddenly lower a listing price 25% and say that it is a limited time offer "and the price will go back up to $1000 psf next Monday. So buy NOW!".

thanks for your dimwit remarks ....only goes to show the rudeness of members on this board....im not a realtor....im a buyer who is looking in manhattan...this is my personal theory based on living here and looking at the real estate market over the years...

I stand my ground...i feel that if pricing goes lower...perhaps ...just perhaps.....we might find sellers who are less likely to negotiate and/or bidding wars where prices might actually go up.......again...its my opinion......

prices are not going up this year or next.

239 e 49th. i know this is a first floor apt, with some issues, but it to me is fairly typical of a desperate seller. and you don't need that many to move the market.

04/19/2008 Previously Listed in StreetEasy by Brown Harris Stevens at $900,000.
10/01/2008 Delisted temporarily by Brown Harris Stevens. Last priced at $825,000.
07/17/2009 Listed in StreetEasy by Prudential Elliman at $625,000.

there has been no stabilization. there are still 10000 properties (not counting the new development not listed) with only 900 or so going into contract monthly. i'm pretty certain that at least some (a fair number actually) of the other 9000 or so really need to sell, or are estates.

DOH! that's gonna leave a mark.

Mhillqt, I guess you just don't get it! Right now the market is incredibly dislocated. You can find literally hundreds of examples of nearly identical units being offered at prices that are 20% apart or more. The sellers that are "holding their ground" with a price that is 15% or 20% more than their neighbor in the same unit 3 floors below are not gaining anything, they're just being delusional and stubborn. 407 PAS comes to mind. If the market continues to fall, as it has for the last year or so, that strategy will only become more stupid, not less. If the market is falling that simply increases the chances that a buyer will find the same thing that you're offering at a much lower price. So you can either adopt the steveF strategy and loudly declare that the market has stopped falling for good and will soon be going up, up, up. Go ahead, scream BUY NOW OR BE PRICED OUT FOREEEEVER!!! Then you can talk about sellers "holding their ground". But if you say that prices will continue going down, well... then sellers not negotiating is just nonsense. Lowering prices implies that you are negotiating.

Well, it's certainly true, Mhillqt, that if listing prices are too low, then bidding wars can erupt. This is one reason why setting the *perfect* listing price deserves less anxiety that it gets from some quarters.

Does anybody know of a bidding war on any Manhattan apartment since January? I would love to hear about it.

Many potential sellers who are market-testers and not serious are sitting out this market. For those in it, there are degrees of desperation to sell, however. That explains the variety of prices on near-identical units. Unless you're the seller's luckless agent, who cares about overpriced apartments? Let 'em rot.

By law the listing broker can't disclose how desperate the seller is, which is why low offers are always a good idea in a market like this, in my opinion. Just make sure you're working with an ethical seller's agent who will immediately take your offer to the seller as they are required to do by law.

{Manhattan real estate agent}

and then there is the issue of the seller accepting your low ball offer and the board rejecting it...but thats another story...

trampolico....just respect that i have a differant opinion than you without resorting to name calling, etc......

Mhillqt, I didn't call you any names in my most recent email (unless you count the mention of steveF as name calling :) and I'll try to keep it at that. Really, the point I'm making is mostly an abstract one: if the market continues going down (your hypothetical, not mine, although I second it) that means that sellers who had initially proposed a price of X have not received any offers near said X price and had therefore come to accept the fact that setting a price of X minus a certain percentage is the best strategy, meaning the one that ultimately would yield them the most money. Keep in mind that, for you to say that "the market" as a whole is trending down a majority of sellers have to be going through this thought process and taking action along those lines. In addition, as Fluter pointed out, many of the remaining sellers, the laggards so to speak, may also be amenable to lowballs. In that scenario, to presume that people who have already gone through the painful process of slashing the OLP by say 5, 10 or 15% are going to draw a line in the sand and not negotiate any further from that price is unsubstantiated and counter-intuitive. There's a more radical tactic which is to make a brutal cut, say 20-30%, and then, yes, maybe get offers above ask. But that tactic will never be the most common one.

See how civil? The point is... you don't have one, at least not one that I can see.

email?... I meant "post".

http://therealdeal.com/newyork/articles/prudential-douglas-elliman-internal-document-shows-decline-in-contract-signings

i would therefore wait. prices will probably fall and trying to catch the absolute bottom is futile. one fear you shouldn't have is prices rocketing upward. ain't gonna happen. NYC typically enters recessions later than the rest of the country and exits later as well. we've just caught up to the national unemployment rate and it probably goes higher:

http://www.nytimes.com/2009/07/17/nyregion/17unemploy.html?_r=1&scp=4&sq=unemployment&st=cse

the biggest price cuts have come at the very high end but i think the next wave is coming in the under 1 mil properties especially in outerboros.

Rancor aside, I am not sure why this time it should bottom in less than a year...or why this time it should form a V bottom? This is not like 9/11 because prices relative to rents in 2000 were pretty reasonable and interest rates were high. Right now we are still expensive and rates are already low. Sign a two year lease and don't even look at listings.

FYI, finance is a lagging industry. Companies in growth mode raise capital. We are far away from that part of the cycle. Banking hiring is down 70%. Let that roll through the rental market and then through the purchase market. If the one bed market dies, there is no upgrade demand.

"Sign a two year lease and don't even look at listings."

That may just be the best advice I've seen on this board.

Rhino 86.....if this apt could be HAD now for 500k vs the 599k ask....do you think this is a good deal OR do you think in 2 yrs this will be 400k?

Mhillqt - wait at least another 2 years for prices here to settle. But then interest rates are likely to be higher as inflation takes hold, so plan on another 2 years for prices to readjust to rates, then another 2 years of serious shopping and competing with multiple bids. Hope that nothing happens to shake things up in the meantime, otherwise return to square one to ensure lowest possible price. Finally settle on a place you're not happy with and count all the money you made. Take 2 or 3 vacations a year to escape the dark hole you bought.

Or...

Take advantage of great inventory now, find a realistic seller, lock-in at a great rate and a payment you can easily live with and sit back and watch the hand wringer parade here on SE.

meant to post the appt...Rhino 86.....if this apt could be HAD now for 500k vs the 599k ask....do you think this is a good deal OR do you think in 2 yrs this will be 400k?
http://www.streeteasy.com/nyc/sale/367389-coop-35-park-avenue-murray-hill-new-york

Mhillqt - I know the question was not addressed to me, but I thought I'd offer a perspective.

1) it appears that no apartment has gone to contract in this building since the Lehman meltdown/market break last fall. 8B - 9/25/08 contract date in SE - may be an exception, depending on how timely the broker was in updating the listing once the contract was signed, but even if it was signed a few days post-Lehman the price does not reflect today's reality
2) every current listing except for the one that came on last week has undergone at least one price reduction
3) several more units have been listed and pulled in 2009 to date

Your hypothetical $500k price is a nice start on accounting for broader market movement in a building where there are no recent transactions, but I guess my question would be, how comfortable are you being the guinea pig in starting to reprice this building?

Going to the next part of the question, my guess is that it does not get to $400k in 2 years. I make the apartment a bit under 800sf; let's call it 780. Maintenance about $1.20 psf/mo, which is good. Good location. I'd be surprised if the value got as low at $500 psf ($400k). I would not be surprised to see it below your hypothetical $500k. You might well get it by bidding $500k today, and I see some more air to come out of the housing bubble before we're done.

Thanks Fluter for your answer to my question. Sometimes the analasis you refer to, based on news and newspapers, involve reading opinions that are more focused toward the RE broker's need of reactivating/push up the market, than to reaaaaaallly picture what is exactly going on on that market. I think is quite normal and understandable: RE brokerage firms daily spend money in adds,while buyers only eventually buy thoae newspapers. I have been following from time to time some opinions written in prestigious press on RE subjects and most times I have the feeling whether they have hidden agenda or manage unaccurate info. What do you guys think?

thanks sidelinesitter.....were thoughtful and professional response which makes a lot of sense..... i tend to agree with you...i dont think this property will go for 400k in 2 years....its a nice park avenue building with decent maintenance....and this particular apt has a prewar feel which is nice......i think the apt is 750sq ft based on the listing same line on a higher floor.....btw...are you a broker?

Spinnaker1: Please identify yourself as a broker.

Mhillqt - I can try to predict the future if you like, and provide support for my prediction. Alternatively, you can go by history and see that corrections in real estate take at least three years to play out. Or you can listen to a broke-whore like Spinnaker. One thing is for certain, it doesn't help you to buy in a period of low rates.

"btw...are you a broker?" - Umm, maybe not. For your reading enjoyment, a selection of my musings on brokers:

"There is little limit to my capacity to think bad thoughts about real estate brokers..."
http://www.streeteasy.com/nyc/talk/discussion/11074-250-east-87th-street

"anon3 beat me to the punch on this one. No way is ivan real, because even a broker could not possibly be as uninformed as he is trying to make himself appear (and I say that while acknowledging that my capacity to believe that brokers are uninformed is substantial). Here is why I think that everyone who is attacking ivan has fallen for a spoof post on the type of silliness that clueless brokers actually post on SE"
http://www.streeteasy.com/nyc/talk/discussion/9700-foriegn-buyers-are-back

There are more on other threads, but I think you get the flavor

Rhino86, I think I recall from other threads that spinnaker1 is a recent buyer. If that's wrong, I'm sure spinnaker1 will correct me. Being a recent buyer would make the "rah-rah, buy now" speech the words of a rationalizer, not a broke-whore. Still not to be relied on, to be sure, but the "you're a broker" slur is too great an insult to be used casually.

I still find it wild the idea that its "tough and cool" to buy. I love how "hand wringers" spared themselves a decline of 30% and counting. However, I do appreciate that the credit bubble created an usually long period of time over which renting made a lot more sense, defying all conventional wisdom. NY is unique. Most people need to upgrade one or more times. That opens the potential for pain much more so than it would be in the burbs, simply being stuck in a house that nonetheless fits your whole family.

Streetasy Admin: you should force brokers to register and make a note by their comments in the discussions.

I'm not alone out there on some deserted island Rhino. There's a 1000 of us suckers a month making a huge mistake in your bitter mind.

Aren't there a 1000 people selling, too? You called me a hand wringer. I think you bought too early into the decline. What is the problem here?

Actually for all the flurry of buying, inventory barely budged...So we are apparently deadlocked. Maybe this will be the shortest downcycle in Manhattan history. Good luck with that!

What exactly am I bitter about by the way? Why does bear have to be bitter? You assholes like to associate bear with 'hang wringing' and 'bitterness' because you WANT to buy, and you have decided to ignore the math. You need to cheapen the bear argument to prop your decision. Its really sad. Enjoy your place because you took a big risk and you may be stuck in it for a while.

Mhillqt- I would not pay more than 12x rent for an apartment...I'd prefer to pay 10x. Frankly, I don't think buying one beds should be as casual as it had become in the upcycle, unless you have a lifestyle that doesn't involve children and marriage.

getting back to the apt at 35 park....who feels that 500k would be a good price for this apt in todays market......and who feels it will be at 400k in 2 yrs....remember its now listed at 599k.

I think we will see 12x rent or less in the next two years. This looks like a $3000 rental at best. So yes, I'd expect it to be headed below $400k.

Unless you are buying into a market that's bound to rise in the medium-term or plan to live in a spot for the long-term, you should not be buying into interest rates. So you pay historically low interest rates on a property at current market values (approx 25% off peak from 9-months ago), and over the next 2-years values drop an additional 20% per Mhillqt's example. What could go wrong?

Inputs: $500K purchase in 2009, 20% down, 5% I/O ARM for 5yrs, value drops to $400K by 2011 (complete loss of equity), $1k/month in maintenance costs.

Based on simple math, assuming average home appreciation of 4%, that property would need approx. 6-yrs from its 2011 value to get back to purchase price; another 4-yrs to recover closing costs. Problem is you have a looming ARM reset date in 2014 and no-one wants to buy your property for a penny over $450K (probably less based on prevailing interest rates). Nevermind that during those first 5-yrs you have paid $100K in mortgage payments and a conservative $60K in carrying costs. Put another way, you are down $260K owe the bank $400K and are trying to sell into a market that has been bouncing along the bottom for a few years.

Personally, I'd rather save now and buy later into a high rate environment where my nut is a more significant portion of a value that promises more upside than downside.

i think this property will sell at 575k in todays market.....so getting it at 500k in todays market with a desperate seller is approximately 2011 pricing.....although if rhino's argument about 12x rent is correct...yes...could go to 400k.....

so...your current thinking is: it might go down a little or it might go down a lot?

my current thinking is that since its in a nice building on park avenue in murray hill is that it might go for 450 if the market heads down but probably unlikely.....and potentially getting it at 500k in todays market might be a great price.

With due respect, $500k is not a good price relative to what you could rent one like it for. Cheap money has clouded everyones perspective. Neither can you be confident a one-bed will suit you for long enough to mitigate your risk. Neither will your monthly payment serve you well relative to renting. Why buy a one bed when rents are falling... Why why why. Park Avenue has zero to do with this.

but rent is throwing money away....if i spend 3k per month renting a 1 bed for 2 yrs = 72k.....if i got this apt now at cheaper interest rates for 500k and it goes down to 400k....i lost nothing after the tax deductibility is applied to mortgage and mtce....

Mortgage interest after tax is thrown away money rent. Do you honestly think rent is thrown away? Maintenance is also thrown away. Your math is completely wrong. How do you figure 100% of your rent payment is a buffer against a decrease in price? Run the math and learn something. Apply all transaction costs on both sides. You are so far off. Go to Housemath.com and play around there. You really need to school yourself up a bit before taking on a mortgage and committing $500k.

are you kidding around? if you buy for 500 and sell for 400---you lose 100 + approx 40K in closing costs or 140 K. lets assume 100% of the mtce is tax deductibel at 50% so that's another 12 K out the door. so...renting costs you $72 K and buying costs you $152 K.

Columbia, why are you giving him such an unrealistic look at the maintenance?

Mhillhouse, please change your screenname to PopularMisconceptions...The reality is you can probably break even renting if it went up by $50k, never mind down by $100k.

Can i ask if this argument is focused just on the short term..ie 3 to 5 yrs? If so, i plan on purchasing this apt as a long term home.....Lets say 30 yrs.Assume that this property goes to 400k in 2 yrs and then real estate stabilizes and increases 4% per year for the next 30 yrs...should account for ups and downs of the market in the next 30 yrs.....Also, lets assume we compare the 500k price with a 60% downpayment and a 200k mtge at 5% vs 400k price in 2 yrs with a 60% downpayment and a 160k mtge at 7%.......Also, lets assume rents go up 4% per year for the next 30 yrs......and mtce goes up 4% per year....
OVER 30 YRS......this is what happens....if we were to sell the apt in 30 YRs....
$500k Price $400k Price
$300k Down 5% Interest $240k Down 7% Interest
Gain on Apt in 30 Yrs $512,627 $612,627
Lifetime Payments incudes principle in 30 Yrs -$386,511 -$383,000
Loss of Interest on downpayment in 30Yrs -$317,798 -$254,238
Mtce less 35% tax deduction in 30 Yrs -$403,340 -$403,340
Net LOSS Ownership in 30 Yrs -$595,022 -$427,952
Rental Loss in 30 Yrs -$2,019,058 -$2,019,058

Sorry didnt come out in chart format......there are 2 columns......$500k Price vs $400k Price......

PLUS where did you get $40k figure for closing a 1 bed coop?

Nothing is going to stop this market from going down from another year or two, perhaps by a lot. 4% appreciation from this entry point is far from guaranteed. I am sorry that no circumstances you can foresee have you moving out of a one bed in the next thirty years. You are clearly a novice, don't throw around numbers. You already proved you don't know what you are talking about by saying rent is money thrown away.

Don't try to prove your bad argument with a ridiculous hypothetical.

You can stretch your horizon all you want, but with employment weak, interest rates low, inventory high and rents falling...there is no reason to buy...especially a one bed. Bank hiring is down 70%. There are no buyers for one beds.

Millhouse, his $40k incorporates a brokers fee on the back end and two closings. Seriously, dude, you need to educate yourself.

Rhino....you are such an arrogant person......RENT = BIG LOSS.....while over time...real estate = Less Loss.......you throw away 2 million in 30 yrs of renting at 3k per month vs loss of .5 million on real estate.......this would be a 1 bedroom pied de terre in manhattan.....its hypothetical that i would keep it for 30 yrs while having a home in florida,e tc....

Also, COlumbia....if you spend $72k on rent in 2yrs wait tilll 400k price ......its basically minimal short term loss but over time.....continuing to rent puts you in the whole.....even if closing costs were $40k....not sure where that high number comes from??? thats an investment into saving $1.5 million in rent income...NO BRAINER..

rhino....remember i RENT now....so its ONE Closing...Pay attention and stop telling people that you know more then they do.....you are one angry dude.

Shit for brains, the choice isn't between buying now and buying never. Its between buying now and buying next year or the year after. If you want to shut your fucking brain off and buy, do it.

I don't know how if real estate triples in ten years and then goes down 30% its a no brainer. You are a fucking buffoon.

I clearly know more then you do, because you sound like an imbecile and a few hours ago you were asking my advice. Prices have doubled since 2000 and rents are the same. If you want to make an argument about how that is attractive or sensible then make it. If you want to make the 30 year argument, you can use it to justify a purchase at any time...so why start a thread to ask the question, you dope.

doesnt matter.....even if you buy in 2 yrs.....you are wasting 76k in rent vs 100k loss in price.....to me that is minimal considering that you then have to pay additional interest rates on mtge in 2 yrs....basically its a WASH...I wont even stoop to your level of name calling......and leave it at that......

and the reason i started this thread was because i was too lazy to perform the calculation that i posted above.....in doing so, i feel more informed.....im not a realtor and dont work in banking, etc......so real estate/finance isnt my main focus in life.......this forced me to REALLY look at it...and dont need your advice anymore....nor after seeing what you posted...would ever want it.

You speak as if maintenance and mortgage interest don't exist. You are a dope. Even after taxes and before any principal payment you are 'throwing money away' as an owner, unless you buy well. Seriously shut the fuck up.

Good go home to Florida.

i included mtce and taxes in my calculation above....take care...lets end this.....i dont come here to fight with people.....maybe you enjoy this but i dont....

just to chime in on one point.... lots of posts say negative things about RE brokers and some of that is understandable. however, i would note that a RE broker has one overriding/overwhelming incentive: make a transaction happen at as hi a price as possible, since they get paid NOTHING unless a sale occurs, in which case they get a % of the purchase price (as far as I know, thats the std bus model tho i would guess somewhere there are different ones)

there are 2 ways to make a sale happen when the buyers and seller are not in agreement on price/terms: 1) convince the buyer to pay more or compromise on terms and/or 2) convince the seller to lower their price and/or relax their terms

my bet is brokers aggressively try to do both, because if either party refuses to come to final terms, the broker gets a GOOSE EGG.

a broker may be working in your interest or not, but my guess is you'll rarely hear your broker advising you to walk away from a buyer or seller unless advising otherwise would impugn the brokers credibility because the offer is simply ridiculous (low ball offer or hi asking price)

you'll also never hear a broker argue anything other than that RE is always and everywhere a good investment ("It's always a great time to buy!") - clearly a falsehood and perhaps one reason they get a bad rap

Brokers often bring extensive knowledge of the local market, the transaction process, negotiating skills etc. but want to drive transaction volumes above all else

I have no problem using a good and reputable broker, but am under no illusion: my broker is NOT my friend nor will he/she negotiate on my behalf like I would: He/she desperately wants the transaction to close as soon as possible and may tell me things or push me to make offers that are not in my best long run interest

That said, many brokers are concerned with their reputations and are decent people.

millqt, if you are asking for advice on whether now is an appropriate time for you to buy from anonymous and well known negative, jaded streeteasy posters, then the answer is NO, you are not ready to buy now.

If you were, you would know what your financial situation is, financial affordability and comfort level and be able to make a rational decision on your home purchase.

Turning to advice from anonymous posters on streeteasy is a good indicator that you are not a sound decision maker. The market is what it is, regardless of what any streeteasy poster has to say. If you are a serious buyer, go to open houses, find an apartment/condo/co-op that you really like and make an offer as to what you think the market value of it is.

What is so bad about testing your premise against a bear crowd? Its actually very sound.

What is your position, people should buy when they want and pay market, no analysis needed?

Go gentle on our boy Rhino86. The black Monday crash of 87 has left deep scars. Think of the trauma he suffered when losing 25% value on his Disney portfolio at the tender age of 1 and you begin to understand the deep seated bitterness. As if that wasn't enough, his guarantor has clearly put his foot down and denied him a chance to finally move out of the maids room. All he has left is to block out the summer sun and spend his days on his single bed hunched over his MacBook (Pro) pretending its all for the best.

king....i disagree.....i was just trying to get others perspective since many here are in the same boat as me...this has nothing to do with my financials....and everything to do with peoples opinions on where the market is heading and when to buy. But given the response...i think i will stay away from streeteasy advice ..

Spinnaker, the funny thing is that if you resort to a 30 year analysis you can make anything work. Why do analysis at all? If you are going to call renting throwing money away, but not recognize after tax mortgage interest and maintenance as throwing away... Why even ask, as such a person is clearly not interested in or capable of analyzing the decision they are making?