Why Are Prices Stalled and not Falling

OTNYC,
Rents are not flat on high end properties. But for e.g on a chelsea 1br that could be rented for say
$2500 in 1999 is now maybe $3200 max. The price on that same property is up at least 3-fold though even after the selloff.

petrfitz, I'm still waiting to hear how you instantly "make" money by taking out a mortgage????

"NYC10022 says that I dont understand the markets. Hmmm he is a renter paying someone else $60K per year to live in a peive of crap little apt. I bought 22 units in 2001 where losers like nyc10022 are paying me over 50% of their take home pay to live in my crappy little boxes.

NYC10022 claims to know the markets and claims to be a great market timer. He also claims to "make" money by renting...."

petrfiz, it's alittle puzzling to me that you are making an argument that renters are fools in today's market. Evyeone knows that you are lucky to be a renter as opposed to being an landlord in the current market place?? I can't understand why there is even an argument about this. With no exception all my friend who bought wish they had waited like me.

jjun4733, don't assume that renters are the luckiest people alive. I know of several renters who have lost twice as much money as I have ( I own) since they put their money into the stock market. Let's see, who would I rather be: the homeowner who is down 15-20% or the renter whose investments are down 35-40%?

bjw where did i ever say that?

on that note please tell us how you ever plan to sell you POS W Burg condo?

jjun please explain your statement "Evyeone knows that you are lucky to be a renter as opposed to being an landlord in the current market place?"

here is some background I bought all my units in 2001. All my units are rented. All rents exceed my costs for all units. Please explain to me how my renters are more lucky than I am?

iamlooking - not sure i agree on that assessment. I have lived here since 97, rented for the first 7 and have owned since. In 97, I paid $500 for a room on the UES (85th off 2nd) in a 5-bed place. In 2000, I paid $1350 for a room. In 2002, I paid $1850 for a 1-bed in NoLita. In 2007, when I considered renting again, all comparable rooms were $2500 or higher.

So don't tell me rents have stayed flat over the past decade, or any sliver of time since - I am aware of the steep deterioration over the past 6 months, but prior to that, the run-up in rents, while not approaching sales prices, was significant.

I don't make money renting...but I don't lose money either. In other words, buying well is great; buying poorly sucks. What is your point. The math worked in the 1990s, buying was great...the math broke down after 2003, those purchases are underwater/breakeven and falling.

Here’s my two cents on the economic forces at work behind Manhattan real estate. Please keep in mind that my analysis focuses on Manhattan as an economic entity, with all the peculiarities that it entails. Two of the main private sector industries that contribute to demand for Manhattan real estate are the finance industry and the legal industry; with media, advertising and consulting rounding out the top five. Interestingly, these five industries tend to move in tandem. As we have seen in this recession , as deal flow suffers, finance suffers and law firms suffer, and as the general economy suffers, demand for advertising and consulting services suffer. For the years prior to the recession, the inordinate amount of securitization of everything from IPOs to CDOs led to an overheated finance and legal industry. During this recession, securitization has collapsed to nearly zero. All of a sudden, there was no need for so much investment banking manpower, nor was there enough filing work for corporate law associates. These industries laid off workers in droves, which has led to the spike in New York unemployment (still lower than the rest of the nation). The good news, is that deal flow will inevitably pick up, and has already shown some signs of doing so. For one, there is a good deal of companies that have been hoarding cash for years, and some that have just done so over the last year and a half. These companies will start doing deals once visibility is better, the capital market improves, and the new regulatory framework becomes complete. There is a tremendous amount of deals that have been shelved or sidelined during the last year and a half, due to the deterioration in the capital markets.
The most important thing to note about manhattan industries is just how liquid their labor force is. When deal volume evaporates it is very easy to lay off the excess labor force, and when deal volume picks up it will be equally easy to find a willing and able labor force to replace them. This is for multiple reasons: the number of qualified MBA’s always have and always will outnumber the amount of jobs available in Manhattan finance. The same applies to the number of newly minted attorneys. Add to this the intangible factors: Manhattan will always be an extremely sought after place to live, due to cultural, social, and economic factors. The point here is that in contrast to most economies, where the labor force is “sticky” and unemployment tends to be a lagging indicator (as the economy picks up, it takes a while before people are absorbed into the labor market) this is certainly not the case in Manhattan, which has the most fluid labor market in the world by any measure.
Additionally, Manhattan is an extremely diversified economy. Tourism accounts for a significant chunk of GDP, as to its museums and galleries, and restaurants, which are all auto correlated and exposed to performance in the aforementioned industries. However one vital industry in Manhattan is the counter cyclical education industry. Manhattan has two of the nation’s (and the worlds) largest research universities: Columbia University and New York University as well as a plethora of smaller universities (the New School, Yeshiva, etc.). In fact Columbia and NYU are the third and fourth largest real estate owners in Manhattan. NYU has a projected need for 6 million square feet in the next 20 years, and Columbia is planning an expansion that will double the size of its campus. Further to all the individual and institutional demand for Manhattan real estate, this powerful education sector shifts the entire demand curve upwards. Even small colleges have been known to singlehandedly support local economies (look at all the liberal arts colleges in Massachusetts for examples of this).

The pace of the economy in Manhattan not a “new reality” but is a temporary aberration. And demand for Manhattan real estate is the most broad of any locale in the country. It encompasses not only local professionals, retirees, heirs, students and universities, but investors all around the globe. These factors account for why Manhattan real estate is the last to drop, but will likely be the first to pick up again.
My advice to all those considering whether or not to purchase. One reality we must come to terms with is that no one knows what the future holds, lifelong economists don’t, real estate professionals certainly don’t, and chatters here on street easy most definitely do not. My advice for what its worth is that if you find a compelling piece of Manhattan real estate, at a price you can afford, you should make the purchase. For one thing we can be almost sure of is outsize inflation in the coming years. This is virtually guaranteed by a fed that is historically opposed to inflation, but currently fears deflation more than anything else. Real estate, unlike cash, stocks and bonds, is an inflation hedge. Its nominal value will always maintain parity with the purchasing power of the currency in which it is denominated. So if you can secure the historically low interest rates that are available today, you should probably take the plunge. If you wait, expecting the market to drop much further, you might be saddled with a much higher 30 year rate, as well as much less valuable cash.

Rhino if you dont lose money renting can you explain how you get all the money back that you pay each month to your landlord?

anything else working?

Correct me if I am wrong, but I believe the idea is that if we can put a pillow under the economy to fall on (massive liquidity), we don't land as hard. Credit markets are more or less working again. If that credit starts filtering through the economy again, and I think arguably it is doing so, jobs slowly start coming back and we're left with an anemic economy and a huge debt hangover, but again, this doesn't necessarily mean enormous real estate price declines, at least not in NYC.

Boo has a good point: in large metropolitan areas, there's a premium for ownership. It often takes a very long horizon to make ownership financially sound. If you're just looking back to the late nineties, you might have a skewed perception of historical real estate values in the city because of the last bust.

Perfitz, are you that dumb? Explain to me how borrowing a million bucks to buy a two bed and paying interest to the bank, as well as maintenance, is any different than rent dollars. Stop wasting my time. Buying was great in 2000. Rents were high and prices were low relatively. This is not an argument to buy today or never to rent. Get your shit straight.

Paulrowe, I enjoyed your load of bullshit. There is a supply side and a demand side. Everything you said was true in the 1990s and prices were 10x annual rent or lower. Now they are 16-20x or higher. Try to get the joke.

petrfitz, it was a tongue-in-cheek question - I'd assume you'd understand. The point is, you can certainly save money by renting in many cases. It's not a losing scenario 100% of time, which is what you seem to make it out to be.

Paulrowe, the aberration is not current economic conditions, its financing conditions of 2002-2007...which govern borrowing power and financial industry incomes. Deleveraging, get it? Its permenant. Banks now require a down payment and income again, and they don't fudge appraisals...A reveral of the whole 2003-1H2008 leg. Stop humping Manhattan.

"jjun4733, don't assume that renters are the luckiest people alive. I know of several renters who have lost twice as much money as I have ( I own) since they put their money into the stock market. Let's see, who would I rather be: the homeowner who is down 15-20% or the renter whose investments are down 35-40%?"

wait what? if you put 20-30% down as downpayment and the market went down 20-30%, then you lost 100%. 100% to losign 30%- 45% in stocks (I have recovered alot with the recent stock market rally by the way) is quite different.

petrfitz, good for you that you happened to buy all your places at 2001.I would have loved to have bought then too, but I had -$50,000 in student loans to my name and nothing more. I'm saying most would have loved to have gotten rid of their real estate a while back to be renting right now as the rents continue to fall.. it almost feels like you guys been living in a differnt planet? It's like arguing the real estate bust never happened? why all the forced arguments?

Rhino, the aberration is a combination of both a change in financing requirements and economic activity. However in Manhattan, (in stark contrast to other real estate markets) very few cooperative boards allowed for less than 20% financing in the best of years. (Many buildings demanded more down). This is a low level of leverage for even the most conservative of real estate investors, especially given the realities of the demand in this market.It is primarily the present economic conditions that are driving down demand, it is not the newly removed ability to finance 95% of a purchase that is driving down sales prices (because that was never possible).

Current financing requirements are not an aberration, they are return to normal. Current financial industry incomes are not an aberration, they are a return to pre-2004 normals. Study history.

I'm just sayin': it;s the buyer's market not the sellers. and buyers are mostly renters right now

"It does actually, until you provide any evidence to the contrary"

Already done - a good 10 threads worth. What else you got?

Most of the renters who are waiting now for the right reasons didn't have money in the 1990s when it made sense to buy. Most of the owners who are bragging bought in the 1990s but don't understand why it worked out so well...Therefore, they are deriding the renters for the wrong reasons.

"NYC10022 says that I dont understand the markets. Hmmm he is a renter paying someone else $60K per year to live in a peive of crap little apt. "

While my stupid landlord is paying $10k for!

Only a moron like perfitz doesn't get how much of a moron he really is.

Rhina says "Explain to me how borrowing a million bucks to buy a two bed and paying interest to the bank, as well as maintenance, is any different than rent dollars"

well for 1 - a mortgage is on a property that you have the possibility to gain value. In renting there is no possibility in gaining value.

2 - by owning and having a mortgage you get significant tax write offs and incentives that you do not get in renting. interest is tax deductible 100%. maintenance in most cases is 50-70% tax deductible. as well as a host of other incentives like tas free cap gains up $500K that you do not get renting.
3 - credit history - in this day and age of tough credit, a history of paying a mortgage on time and properly gets you access to better loans and better rates. Renting has zero effect here. So an owner has access to loans that renters dont and can borrow money at better rates. This a lone can mean $100's of thousands of dollars over time.

I cold go on and on. You are a renter in an ownership society. You get no protections, no advantages in renting.

Look at natural disasters lke Katrina. Who got massive govt aid? Renters or Owners? in that case you would be stuck in a formaldehyde soaked RV. I would be getting my multi million dollar beach home rebuilt better than it was......

> All my properties were just appraised again at over 250% of their original purchase price.

Including the bankrupt Lake Las Vegas place. riiiiight.

moron.

so jjun your statement ""Evyeone knows that you are lucky to be a renter as opposed to being an landlord in the current market place?" is only true if you are a landlord that bought in the last 2 years????

what percentage of landlords bought in the last 2 years? maybe 0.005%?

so your statement is wrong over 99.999% of the time.

Perfitz, you are actually right...except in 2004-2008 when a credit bubble made buying retarded. When the impact of same works its way out of the system again, it will be time to buy.

> don't mind Rhino OTNYC. He is the village idiot.

Did alpo just try and call someone else an idiot?

What funny about our village idiots, alpo, steveF, and perfitz, is that they're not in on the joke.

I love that I am the idiot...but I've gotten dozens of compliments. And not just from the local bear regulars. Meanwhile the loathsome foursome get whacked around like pinatas. Don't forget LICC.

"Let's see, who would I rather be: the homeowner who is down 15-20% or the renter whose investments are down 35-40%?"

Well, I don't care which dwarf you want to be, but the renter is way ahead

Anybody with an ounce of a brain will take 35-40% down over 20-30% (not 15-20% as claimed) x 10 or x 5 with leverage.

Anybody who put down 20% at the peak of the market lost 100% of their money.

But, alpo would have to take a math class to understand that.

nyc10022 we are still waiting for you to provide 1 actual point or peice of logic. All your posts are attacks and lies.

You still have told us how you make money renting?????

Also please explain how your landlord pays $10K for you? this is a complete lie.

"Already done - a good 10 threads worth. What else you got?"

Keep lying - or post a single piece of evidence. Saying you have doesn't mean you did. Your credibility is pretty much nil right now.

nyc10022, petrofrizz is not a moron.

well renters are not only down their stock market loses. You have to add in ALL the money you have paid in rent. you have to count that as a complete loss that you have no possibility of getting back.

the owners who bought in the last 2 years, and didnt sell lost nothing. They have the possibility of making their money back and history proves that in the long run they will make money, as well as, receive very nice tax incentives.

The renter in the long run loses all their money, has no possibility of making it back, and receives no tax incentives.

Buying is best most times...2004-2008 was not most times. Open your paper. Try to understand that something unusual happened in over that time period....The flip slide is what we are living through now. Downcycles in real estate don't last one year. NY has another two down years to go, with strong arguments for serious downside. Most times it would not have made sense to rent for 10 years...from 2002 to 2012, it probably will have.

Rhino 1 - how do you not lose money renting????

2 - do you think that the owners who bought in the last major downcycle (90's) and still own are bummed about their investment? do you think someone who bought an $100K brownstone in brooklyn that could now sell it for $1.8 is bumming? what about the guy who has rented for the past 15-18 years? do you think he is happy that he didnt invest in the last major down cycle?

re: the rent vs buy argument. I have made money both ways. I have bought and sold three times in manhattan and made very significant profits -- much better than the best returns in the market. In 2005, I sold my apt., put the money in the mkt and the returns paid for my rent -- i lived free for a couple of years. That is no longer true as dependable, safe returns are down and my rent is high so I must either buy or move to a more efficient rent base. So it is all about timing. But net, I did much better buying than renting.

as for prez: Let's see, who would I rather be: the homeowner who is down 15-20% or the renter whose investments are down 35-40%?"

You are assuming two points. One that the homeowner will not be down more than 20% which only history will bear out unless the owner gets out now. Two, that renter investments are down 35-40%. Unlike ownership, the market is more flexible. Most investors have stops or just get out --certainly if they are down by 20%. Plus, since most dollar cost average down, they can get in lower and make up the losses. Most of my trader friends are either whole or nearly whole by now. You can't be that flexible with apt. ownership.

Renting is only a total loss in a world where loans are interest free, mainenance doesn't exist and prices always rise. I made money by renting the last two years...by not buying.

Perfitz I will buy when I think the downcycle is played out.

hmm most homeowners - those that didnt buy in the last 2 years i.e. 99% of owners are down 15-20% from peak but many are still up 1000's X from their original purchase price.........

People have failed to mention the specter of inflation, which currently looms large. Inflation does not bode well for renting, nor for waiting to buy.

"many are still up 1000's X from their original purchase price........."

no, not a moron ...

We are not talking about 99%....We are talking about now. 2004-2008 was a one in a hundred credit bubble. GET THE FUCKING JOKE.

Paul, inflation spikes interest rates and kills interest rates.

""Evyeone knows that you are lucky to be a renter as opposed to being an landlord in the current market place?" is only true if you are a landlord that bought in the last 2 years????
what percentage of landlords bought in the last 2 years? maybe 0.005%?
so your statement is wrong over 99.999% of the time."

what??! that was a silly one. no,I said CURRENTLY. stay focused, I'm not talking about any other timeframe. it was a simple statement. I'm talking about today. it is pointless to talk about the past as situtaion changes according to which peiord you talk about. Most landlords in NYC is losing money on their investments right now, negative cash flow - they are subsidizing for me to stay at their place so to speak, which I appreciate. cuz I'm paying rents to actually live in the place, should rightfully pay to get a service, but I am just saying that I'm thankful to the landlord for subsidizing my lodging costs as I know it would cost more if I had owned that place as opposed to renting. .. it's just simple to me, the balance of the benefit is coming to me so I'm the lucky on. When the water starts flowing to your side again, I'll tell you, that you are the lucky one. it changes. hopefully I'll be one too then.

petrfitz, it's weird, you remind me so much of my old broker, she only had one track mind..to win a sell. nothing else.

Rhino please explain how you made money renting? Lets say you pay $3K per month in rent. How did you make that $3K in month back? Please explain. You havent answered the question.

Rhino also saying you will buy when the down cycle is played out is purely market timing. What happens if at the botom of the down cycle interest rates are 3 points higher than today? How does getting $50-100K lower in purchase price equate to paying 3 points higher over 30 years? Which is greater the $100K you saved or the additional money you pay on the higher mortgage rate??? I know the answer. Do you?

jjun you said exactly "being an landlord in the current market" 99% of landlords in the current market did not buy their property in the last 2 years.

Alanhart - can you tell me what a Brooklyn brownstone sold for in 1995 and what that same property would sell for now?

"well renters are not only down their stock market loses. You have to add in ALL the money you have paid in rent. you have to count that as a complete loss that you have no possibility of getting back."

Yup, and we're STILL light years ahead of you and the other morons who took a leveraged 20-30% drop! (and can't forget 50% in las vegas).

And did you add in your taxes and maintenance costs and interest costs?
(of course you didn't, because you have trouble with the math).

All the costs my landlord paid for me!

Thanks to sucker landlords like you, us renters have gotten a multi-year free ride!

jjun says "Most landlords in NYC is losing money on their investments right now, negative cash flow - they are subsidizing for me to stay at their place so to speak, which I appreciate."

please explain - if most landlords in the city have owned their properties for several years - which is the case 99% of the time, then how can you say "Most landlords in NYC is losing money on their investments right now, negative cash flow - they are subsidizing for me to stay at their place so to speak, which I appreciate."?

Please explain you make no sense.

"Rhino please explain how you made money renting? Lets say you pay $3K per month in rent. How did you make that $3K in month back? Please explain. You havent answered the question."

Perfitz, you have trouble with English. Nobody "made" money renting for $3k. They just saved money by not buying, which would have cost $30k.

Remember, a penny saved is a penny earned!

And a penny lost in RE is actually a dime leveraged...

Perfitz, explain how a landlord "made" money here.

I spend $5k on rent. The landlord spends $10k on carrying costs, taxes, interest, etc.... and his equity goes down $500k.

How did he "make" money again?

nyc10022 you are just a moron who believes things that are not true. Landlords like people like you. We take over 50% of your take home pay each year, you pay well over 100% of all our costs, and you also pay for our vacations, boats, massages etc

please continue to believe that you make money renting. please continue to believe that your landlord subsidizes your rental unit. We landlords love the way you think. please give us 50% of your take home pay for the rest of your life. Call us losers, believe that you are winning just send us 50% of your take home pay each month for the rest of your life

"Most landlords in NYC is losing money on their investments right now, negative cash flow - they are subsidizing for me to stay at their place so to speak, which I appreciate."

That is complete nonses. Many of the major landlords in NYC, such as Avalon Bay, are making money. The truth is that YOU are the ones who is subsidizing your landlord.

http://www.tradingmarkets.com/.site/news/TOP%20STORY/2298702/

paulrowe: it is not the newly removed ability to finance 95% of a purchase that is driving down sales prices (because that was never possible).

in the halcyon days of 2007, there were articles in the NYTimes about young buck stockbrokers and hedgies that were driving the high end of the market up by buying 4 million plus apartments with 10% down. They were bragging about how smart they were to leverage to the hilt. Those days are over. Many banks are currently requiring 30% down. So I can't see how that hasn't affected the downward spiral in the market. Those young turks are sidelined -probably for a short time-- but they will still have to pony up more money so the high end will be affected which will trickle down.

"Alanhart - can you tell me what a Brooklyn brownstone sold for in 1995 and what that same property would sell for now?"

1000's X less, 1000's X more. Right?

President please dont correct them. let them think that renting is smart. dont blow it for us landlords

okay, perfitz.. one thing I have learned to do is distinguish the smart ones from the just simply selfish ones (who only cares for their own agenda) and learn to filter out noise.

You are my 2nd ignore person. I realize everything you say is just noise, not useful at all and waste of time. bye.

"nyc10022 you are just a moron who believes things that are not true. Landlords like people like you. We take over 50% of your take home pay each year, you pay well over 100% of all our costs, and you also pay for our vacations, boats, massages etc

please continue to believe that you make money renting. please continue to believe that your landlord subsidizes your rental unit. We landlords love the way you think. please give us 50% of your take home pay for the rest of your life. Call us losers, believe that you are winning just send us 50% of your take home pay each month for the rest of your life"

Wow, perfitz, what a fantastic logical response you came up with. You don't understand the math that shows you are losing your shirt, so you come up with 3rd grade insults!

You got two different financial scenarios, and you've got no intelligent response!

Sorry, dude, us renters are LOVING that you are paying the bills for us. Even funnier that you don't get the math!

You are a moron, dude. It is SO scary that you don't even realize how bad your decisions are.

> President please dont correct them. let them think that renting is smart. dont blow it for us
> landlords

Yes, if nobody tells the moron landlords that they're losing money, they'll never figure it out! They apparently don't know math.

Don't tell them, or they'll stop subsidizing us!

well you could have bought that brownstone for $100K which means a $20K downpayment and another 50-70K in mortgage payments minus write offs etc - so lets call the owners current cash outlay $80K. If they sell that property for $2 million which is the going price down from $2.2-$2.5. that is about a 2375% profit.....

but I do appreciate all the other argument in SE by the way (mostly). for someone looking to buy my first place, it is a great site to resort to. Just need to filter out stubborn useless voices.

Perfitz, there is an apartment I'm looking at that will cost about $20k per month to carry.
Can you please buy it, and then I'll rent it to me for $8k?

If you do that, I'll promise not to tell you you're not getting screwed!

its nice to have tenants like jjun and nyc that dont understand math. Yes we landlords are sure losing our shirts! pretty much every property in NYC is rented for a loss! please keep "subsidizing" us... please... you are so smart with financial thingama stuff. thank god us owners have smart renters like you to save us......

"do you think someone who bought an $100K brownstone in brooklyn that could now sell it for $1.8 is bumming?"

Is the idiot who bought in Vegas and Manhattan (or at least claimed so) at the absolute peak of the market really trying to use the "somebody bought a brownstone for $100k argument"?

Moron doesn't even get the key there.... you're supposed to buy at the bottom, not the top!

Dude can't even tell up from down.

Perfitz, are you really this stupid? This is not about cash flow charactistics of things bought in the past...Its about thinks bought after 2004. Those investments sucked. Cap rates under 5% suck.

Cap rates under mortgage rates, suck.

Not a moron ... a Soho-Nobu-submo.

"its nice to have tenants like jjun and nyc that dont understand math."'

- idiot who thinks $5k is more than $10k.

Yes, moron, tell others who doesn't get math!

You can't even tell up from down!

I love it!

> pretty much every property in NYC is rented for a loss! please keep "subsidizing" us...

Not all, just the ones bought 2004 and after...

Thank god for morons like perfitz!

Perfitz has a new career.... he washes the windows on celine dion's helicopter.

I covered three years of rent by not buying last summer. Stop ignoring maintenance, after tax interest cost, opportunity cost and transaction costs. The choice is not to buy today or never buy. Its to buy today or buy later. Market timing isn't perfect, but rent/buy math done right is sensible. You are an idiot. Keep talking.

rhino thanks for your rent this month. 50% of your take home pay sure saved my ass....

What works for one person may not work for others. It makes sense for some people to own (given their financial situation), but not for others. Not sure why you guys are arguing. I fully acknowledge that real estate market may not be a great investment these days. But it is true that landlords do make money off of renters. But if you are looking to buy a property for living, keep in mind that Manhattan market just started breaking down. If you are not in a great Financial situation (aka, ton of savings in your bank account) and/or if your job is not that stable, I would recommend against committing to anything that you might regret in the future.

Absolutely.... anyone who waited from 2007/8 until now, figuring 20 or 30% down, just saved themselves a 100% or more loss.

and also "made" money renting!

> petrfitz, I'm still waiting to hear how you instantly "make" money by taking out a mortgage????

One word:

Volume.

> and also "made" money renting!

No, I didn't make money renting.... I just let YOU pay my bills and eat my losses.

Thank you!

Perfitz, I have some more losses I'd like you to eat. Ready for those, too?

> But it is true that landlords do make money off of renters.

Those that bought at pre-bubble prices, sure they do.

Those that bought in the last few are paying renters' bills for them.

but nyc10022, if he makes that kind of profit when he sells, then you are subsidizing him by helping him defray his monthly costs. You do not get to share in the profits so he wins.

of course, this assumes that the market goes up. like investing in the market, timing is everything.

what petrfitz said in his earlier thread is true, owners get tax deductions and credit lines. and it is true that the rich get richer. credit is everything. i think you should be more open to his line of thinking.

i made well over 150% profits in every apt I sold (roughly 18% per year -- better than the market on the whole) that said, i am renting now until the prices come down .

Perfitz, seriously... will you take me up on your offer?

"Perfitz, there is an apartment I'm looking at that will cost about $20k per month to carry.
Can you please buy it, and then I'll rent it to me for $8k?

If you do that, I'll promise not to tell you you're not getting screwed!"

i am willing to take those losses and pay your bills for the rest of your life. please send your rent check on time or i will ruin your credit history. oh yeah because you are such a great tenant over these last 5 years i am putting in a brand new $80 electric oven in your studio.

then raising your rent 10% next year

I am still struggling to understand how buying cash flow positive property at a good cap rate in the 1990s makes renting in 2004-2008 stupid. I guess it goes to show that people can make money in spite of themselves... And poke fun at me for not buying in Manhattan when I was in college in Boston.

"i am willing to take those losses and pay your bills for the rest of your life."

I think that pretty much clears that one up.

Perfitz goal is to lose money! Success, finally!

"Those that bought at pre-bubble prices, sure they do. Those that bought in the last few are paying renters' bills for them."

That's right. So it really depends on time your buy/your financial situation/risk appetite etc. Like I said what works for one may not work for others.

If it were a choice between renting today or buying at 1999 prices in 2009, I would choose to buy no doubt. Cap rates currently suck and prices are falling, alas.

renting today is stupid because all you guys have been market timing for years. you missed your chance and you will miss the next chance. thank you for your rent.

"but nyc10022, if he makes that kind of profit when he sells, then you are subsidizing him by helping him defray his monthly costs. You do not get to share in the profits so he wins.

of course, this assumes that the market goes up. like investing in the market, timing is everything."

Yes, and now thats its down 20-30%, its official. He lost.
He took the risk of paying my bills for me, and what he got out of it was.... more money lost.

He bet wrong.

Thats the point.

He paid for the "investment", and the investment lost him money.

Thats what you call a, well, lousy investment.

"you missed your chance and you will miss the next chance."

Yes, we missed our chance to buy at the peak of the market!

Moron, in case you hadn't noticed, prices are still falling...

Nothing was missed, the bargains become bigger (as do your losses).

i bet in 2001. you have paid rent since then......

how am i losing money. please explain.

"That's right. So it really depends on time your buy/your financial situation/risk appetite etc. Like I said what works for one may not work for others."

Yes, but what didn't work financially for 100% of perfitz and others was buying in 2007.

This isn't a "personal circumstances" conversation. If you bought right before things went down 20%, you took a serious loss. Its pretty simple.

also by renting you never bet. you never played the game. you are a wannabe armchair quarterback.

petrfitz: It is amazing that you continue to argue against nothing. Again and again people have posted that buying TODAY is a poor choice. Noone has argued (in fact, many have pointed out your good fortune) to buy in 2001. But when confronted with the overwhelming evidence to the truth that buying from 2004 - the present was/is a poor decision, you resort to "thanks for your rent this month." Most landlords bought before this period. Wonderful for them. This is a website about buying or renting RIGHT NOW. Please answer the question of if it is wise to buy a unit today and then become a landlord of that same unit?

Perfitz, unless you were lying, you bragged about buying in Manhattan and Las Vegas in 2007.

You are losing money because those, well, tanked.

Do you need us to explain housing prices to you? Do I need to give you a class in reading graphs?

Its great that you had money in 2001. I did not. Congrats.

That's why I mentioned that timing is a factor in your purchase process. Did you miss that?

"Please answer the question of if it is wise to buy a unit today and then become a landlord of that same unit? "

Keep in mind that perfitz told people to do so, and claimed he was doing so in early 2007.

So, he answered the question at an even clearer time.

So, yes, he is that dumb.

nyc10022...you always have good advice so my question is....should i rent for two more years (in a different apt.) and by then the prices will have come down...

> also by renting you never bet. you never played the game. you are a wannabe armchair quarterback.

Perfitz now sounds like the bum who bragged about losing all his money in vegas.

Sorry, I'm happy to have mine!

Well said, Parkside. Its kind of sad when you have to remind people we are debating decisions for the present, not the past.

Yes, and now thats its down 20-30%, its official. He lost.
He took the risk of paying my bills for me, and what he got out of it was.... more money lost.

He bet wrong.

That is assuming that he bought in the last 18 months. If he bought 10 - 15 years ago and is up over 200%, he is way ahead. The market would have to go way, way down to wipe out that kind of profit. In the meantime, renters are defraying his costs until he pays it all off in another 15 - 20 years.

I don't think you should buy now, but if the market goes down more, you should consider it. There is money to be made owning vs. renting.

Its also very tough and cool when Perfitz pretends to be everyone's landlord.