BUYERS...What Will Finally Get y-o-u off the FENCE?

price.

Lower prices.

If I'm going to spend half a million dollars on housing (or more), I need to know that I can fit my family into the space for the long term. Presently, that is not the case.

Duh. If the average price of a 3-bedroom apt S. of 96th is 100k, do you think that there would be any kind of inventory left? Or say, 200k, 300k, 400k, 500k, 600k, 700k? We are in price discovery mode right now.

evnyc...you can get that in North Carolina and practically every other state except California. Why don't you move there?

conviction that the price will not go down another 10- 15% from where it is now.

SteveF: You are so smart! Gee whiz, why didn't I think of moving a long time ago? Clearly I'm so stupid that such an idea never occurred to me.

Real answer: I like it here, and I can fit my family into a rental. So until property prices come down, no need to buy. OR TO MOVE.

evnyc:

I know of many new construction condos in prime Brooklyn neiborhoods that would fit your criteria! That is if you would be willing to live in Brooklyn...!

Fayek, Brooklyn is my market. Believe me, there is nothing that matches my criteria at my price point. I'm not buying an overpriced asset parked on a superfund site, aka the Gowanus.

evnyc

well, I am thinking downtown Brooklyn? Have you done your homework? From my knowledge as a real estate broker you can do pretty well in that area!

price, price, price...

Fayek, thanks for the offer, but I've been doing my homework for over a year now. And I'm one hell of a researcher. Downtown Brooklyn has several nice developments, but the spaces are absurdly tiny. They are not going to happen. And the larger ones are out of my price range. So until prices come down, I am on the sidelines.

price, price, price.
a unit with $4K rent costs $7 - 8 K per month to buy. it just does not make sense unless you assume it will grow at over 7% per year indefinitely (at which point, you BREAK EVEN with renting)

evnyc: Real answer: I like it here,

You and everybody else that's why prices are justifiably so high.

I second e_c.

So, Steve, why don't you move instead of complaining about other people's decisions?

Too many Steves: my comment is for steveF, of course.

People like it in a lot of places...London, Paris, Madrid, Tokyo, Sydney, San Francisco...but prices seem to be dropping in all of them...New York is no different, Mr F.

MJS

Now I get it. Prices dropped over the last year because people LIKED IT LESS IN NYC ALL OF A SUDDEN. Brilliant.

eric_cartman - you need to do a little more work - no one is PAYING 2x to own vs. rent. The cost where properties are trading, assuming no tax effects is anywhere from 1-1.5x.

Lower transactions cost - at the moment we loose a combined 8%-10% in taxes tolls and fees.

That may not matter so much in a rising market, but in falling or flat ones, the execution price needs to 25% lower for protection against further falls in price, and all transaction costs.

We are a bit split personality, looking at new development uptown and downtown. I think if better new developments like Visionaire and Rushmore would chop their listings 25%, then it would be worth having a conversation and not feel like I need to haggle too much.

I'll buy when i know i can cover the mortgage in full if i want to rent the place.

Just to illustrate why transacation const are a killer: say I bid on $1,000,000 unit and put down $250,000 and borrow $750,000.

Immediatly I am $80K after taxes tolls and brokers, or 32% of my down payment. My unit needs to rise to 11% before I break even (assuming parity with rents), and that could take 5+ years in this market.

however, if the market drops just another 10% (or 100k) my personal equity goes to from 250k - 80k - 100k = 70k, so now I have 28% left of my downpayment. That's why I need 25% cushion before i'll even consider buying.

BA_DA_BOOM

Perhaps if the developer is ready to cover your closing costs?

A job that pays me a gazillion dollars.

"no one is PAYING 2x to own vs. rent. The cost where properties are trading, assuming no tax effects is anywhere from 1-1.5x."

HA-HA-HA-HA-HA!

Show us some of these mystical properties, printer. That is, show us ONE property in Manhattan that you could rent out to an unrelated third party and at least break even from Day 1.

Fayek: Perhaps if the developer is ready to cover your closing costs?

Closing closts does not equal transaction costs. Need to bank the full 8-10% from the seller (that means my selling costs too), the developers closing costs is already dead money.

"I'll buy when i know i can cover the mortgage in full if i want to rent the place."

sledge, what about maintenance and taxes?

"Show us some of these mystical properties, printer. That is, show us ONE property in Manhattan that you could rent out to an unrelated third party and at least break even from Day 1."

stevejhx, he did say 1-1.5x; you're essentially asking for 1x or less. There is no arguing that getting that kind of deal is VERY difficult right now, but you can't just look at a haystack and declare that there isn't a single needle in it. There are and will continue to be distressed properties out there, don't you think?

And the dealbreaker for the real buyer.....!

location?

Priced right?

Square footage?

all of the above. right now i'm making money renting (vs owning). renting sucks, owning sucks more.

if i had a big chunk of land next to good transportation to the city and make it an RV camp, wonder how many people with normal jobs will take on it. you own your home, you don't lose mobility, ... lol, bet that's super hyper illegal around bubblilicious areas cause if done it would be a hit (ok, not with families with 3 kids, but why not with young couples?).

very much a la matthew "can i take my shirt off" mcconaughey. close to a nice beach where you can chill out after a hard day of work in the city.

price.

Admin:

Awesome fantasy...!

Once prices hit 2002/03 level I just might be ready.

no, bjw, I'm saying LESS THAN 2x. That is, show us some of these 1 - 1.5x rent properties. They don't exist.

"if i had a big chunk of land next to good transportation to the city and make it an RV camp, wonder how many people with normal jobs will take on it."

The post office is auctioning off their downtown processing center in Chicago. Minimum bid $300,000. It's all yours.

"The post office is auctioning off their downtown processing center in Chicago. Minimum bid $300,000. It's all yours.".. Chicago? a warehouse? Downtown? that doesn't fit any of the requirements, but thanks for the info.

i'm thinking about making it possible for young people to do the slaving 9-5 and coming back to a relaxing atmosphere where they can go to the beach on flip flops, with a cold beer or maybe surf a little. a place that begs you to hang out outdoors, very affordable and the city is still there to enjoy. long island is too far for a daily commute i'm afraid. are there beaches in the bronx or new jersey close by to do this?

Correct me if I'm wrong, but wouldn't break-even imply 1x?

bjw, so you do admit that the only well-priced properties in manhattan are distress properties? i.e, majority of the regular stuff for sale is way overpriced ..

No - 1x implies break even. There's a difference.

eric_cartman, definitely agree that the majority of listings out there are overpriced. I don't believe I've ever said otherwise, no? My point has been that no one ever needs to buy the "majority of regular stuff" though; most people are only looking for one property here, I think. It never hurts to look and I suspect there are some people who claim they would buy if the price were right but aren't looking at all, but that's just my impression from some of the discussions here.

"No - 1x implies break even. There's a difference."

Steve, that's what I'm saying. This is what you posted; if you're asking for break-even, you mean 1x, though it's clear printer said 1-1.5x. That's what was confusing:

""no one is PAYING 2x to own vs. rent. The cost where properties are trading, assuming no tax effects is anywhere from 1-1.5x."
HA-HA-HA-HA-HA!
Show us some of these mystical properties, printer. That is, show us ONE property in Manhattan that you could rent out to an unrelated third party and at least break even from Day 1."

bjw, I think steve is confusing himself again. There are plenty of 1-1.5x proprerties out there and many have been posted on this board. In fact, I think you and I pointed out one for steve to consider in Chelsea a couple weeks ago.

Looking for a price-to-rent ratio approaching 12.

"There are plenty of 1-1.5x proprerties out there and many have been posted on this board."

Post that one again, JuiceMan. If you think it's comparable to this:

http://www.nybits.com/apartmentlistings/1f154820682b290d6826df4b779960eb.html

Tell me why.

And post a few more of them. They don't exist.

"What are the defining factors that will get you in the game of buying that CONDO, COOP, TOWNHOUSE....?"

When median asking prices break the 1000 per sq ft average.

truthskr10:

Are you talking in Manhattan?

I just realized how high the interest rates have gotten! 4.7%ish was the norm for 30-yr in Manhattan in the spring, but it is 5.5%ish now. The price advantage could disappear when you consider this change... Of course, the prices could come down significantly enough to more than make up for the rising interest rates--or, the Feds could lower them again... Oh, how complicated!

Most buyers don't buy low. They prefer to buy high and rising. The are afraid of missing the boat. Counter-intuitive but true. Go figure!

Fayek
yes of course....sorry for the vagueness.
Outside of manhattan....11 times rent roll max.

I can find things I love, and I can find in my price range -- the minute I see something I love in my price range, I'll plunk down cash.

admittedly, one factor is also stock values. As long as I feel like there is upside, less reason to move a bunch of capital back into RE at these prices (while renting is still significantly cheaper).

I'm still much more willing to bet on stocks than RE....

Trinityparent, perfectly put.

Though if things go the way they are looking to go in the Hamptons, I may buy there instead and secure a long term lease in manhattan.

A healthy relationship between what I am paying rent vs what I can buy after putting 25% down. It seems crazy to give up all that cash AND have higher monthlies than I am paying in rent for similar space. Even the tax benefit doesn't close the gap...

So Juicy, bring up that apt. that you said was 1x in Chelsea, let's compare it the similarly priced apartment in a new building that I posted.

And - if 12x isn't the proper rent-to-price ratio as you say, WHAT IS IT?

"So Juicy, bring up that apt. that you said was 1x in Chelsea"

First of all where did I say it was 1x? There are four posts above where you have ignored 1-1.5x which is what printer, bjw, and I said. Secondly, I won't play your tired game. Just search for the thread. Every couple weeks you make the same argument and people post a bunch of apartments to show you are wrong and then you spit the dummy, switch the story, post 3000 entries and claim victory.

There are at least 3,421 threads on streeteasy that cover this topic. Not going to ruin another thread because of your insecurities.

When the following is available for $250k or less:

a traditional one-bedroom in Brownstone Brooklyn (ie NOT new construction), with roughly 700 sf, decent windows, on a quiet, safe block in an established neighborhood, (maybe a "B" block rather than an "A" block), pets allowed, common charges $600/mo or less, with reasonable subway access.

I don't want or need granite countertops or meile appliances.

I need a decent location from which it is possible to humanely commute, solid (ie old) construction, something-less-than-hideously ugly architecture, and sane financials on the building in a basically middle-class neighborhood.

Not Fourth Avenue. Not on the wrong side of the BQE in Red Hook. Not in a recently ghetto-ized area like Crown Heights.

Right now places like what I describe are being offered occasionally in the $350k range. When it comes down by a third, I'll buy.

And it will.

Guys, please don't start that argument with steve again. There are NO winners whenever that starts.

So, lets just get to reality. I'll tell you what I'm looking at...

I've never really stopped watching rental and buy prices for things I'm considering. And, while I've seing the 25-30% price declines, I'm also seeing some fantastic deals on rentals (something I looked at at $4500 - previous lease - is now at $3200) and I still like the idea of exposure to stocks over re.

I didn't think you could, JuiceMan, but I will:

JuiceMan: steve, you should really consider buying. If you like Chelsea, there are lots of nice, new 2/2's for under a million bucks. With 20% down and a decent tax benefit (self employment makes this even more attractive) you could end up ahead on your $5000/mo rental cost day one. What are you waiting for steve?

bjw2103: JuiceMan's right. Here you go, Steve, way cheaper than your current place: http://www.streeteasy.com/nyc/sale/394265-coop-234-west-21st-street-chelsea-new-york

JuiceMan: steve, bjw's choice is perfect, and much less expensive to buy than to rent. You really should reconsider your stance, or you could always just take another rent increase like you did this past year.

bjw2103: "JuiceMan, don't worry, I'm sure he can find it for rent on nybits for $1200."

JuiceMan: Yes, that 400 sqft 2/2 is always available on nybits.com

http://www.streeteasy.com/nyc/talk/discussion/13034-the-7-train-line-is-rated-the-best-in-nyc-another-plus-for-long-island-city

Still stand by your comments, Juicy?

And again, you conveniently ignore the 12x question.

Wrong on every account, as always.

And here's the answer to your other question:

Sales in Chelsea
We found no listings for no more than $1,000,000.00 with monthly payments of no more than $4,500.00 with at least 2 bedrooms with at least 2 bathrooms

Admin: what you’re thinking of is Far Rockaway. Beautiful beach, best surfing in NYC, A Train to Manhattan in about an hour, but economically depressed. Plenty of large vacant parcels right on the water. I’ve had the same fantasy as you…

An apology from Lawrence yun. A personal one.

"Admin: what you’re thinking of is Far Rockaway. Beautiful beach, best surfing in NYC, A Train to Manhattan in about an hour, but economically depressed. Plenty of large vacant parcels right on the water. I’ve had the same fantasy as you…"

The fantasy is great... the reality is a big problem. They can build as much nice as they want - and averne is decent - but there are like entire cities of projects on the peninsula. Buildings and buildings and buildings for miles. They thought it was a great idea in the 60s to move all the poor people out there.

In the late 80s, I was routinely told that the A was the most dangerous subway... and the projects are still there. And its like a red hook, they simply make up too much of the land mass to not be a major factor on the entire place.

contrast this to coney, where the projects are all on one side.... (the other side being the trump middle class stuff, then brighton). I think that has a much better shot.

steve - ridiculous argument, as always. no one is saying that it makes financial sense to pay the ridiculous $950k asking price for a generic 1bd new build that you can rent for $3k/month.

but the 2/2 generic post-war on the UES in move-in condition that rents for $4k/month and costs $850k with 1700/month of maintenance is an entirely different story.

When is the bottom?
I'm a buyer and I'm not going 12X, 8X, whatever...I want to own my primary residence. I don't consider it an asset, more a liability that I desire. The same money carefully invested in the market today will bare a much better yeild that the RE purchase that I am eyeing...can't live in an investment portfolio. So what am I waiting for? History show, for the most part that RE does not do a V tpye bounce back when it comes to demand and price. Patience, so far, has been the prudent choice. I am wishing for greater capitulation. Maybe another 20% drop from today's closings. You can argue this point with me but, how do you argue with wishful thinking. The Macro story tells me I have time...not unlimited but, time. I can't imagine what it would take to make the RE market take off and run away; massive employment, wage increase, local economic expansion? For capitulation to occur to a greater degree I believe the recipe would be 3-6 more monthe and a bottom retest in the equities market. I'm not holding my breath just, hope I don't get caught holding the bag.

printer, that argument is EXACTLY what JuiceMan said. Read the thread, look at the links. To Juicy, those two apartment are IDENTICAL.

Agrees nyc10022. Been mugged on A train more than any other in he 80's. Oh and I've mugged more people on the A train than the others lines in the 80's, so your observations are correct. ; )

Why is anyone engaging stevejhx on his ridiculously wrong analysis of the rent ratio. The last time he raised this, I picked about 4 random buildings based on whatever was on the streeteasy homepage featured listings, and each time he was wrong. steve has been proven wrong so many times but he keeps repeating his same garbage over and over . . .

"Sales in Chelsea
We found no listings for no more than $1,000,000.00 with monthly payments of no more than $4,500.00 with at least 2 bedrooms with at least 2 bathrooms"

That's weird, because the very apartment I linked to comes out to less than that, and a totally different one comes out when I do the search myself. I wouldn't put much stock in that search functionality.

"Guys, please don't start that argument with steve again."

Hall monitor, is that you?

as far as mortgage rate movement vs price movement, from what i understand the fed doesn't really have that much control over mortgage rates, bond traders do. they were the ones responsible for the spike at the end of may, they were basically punishing obama.

"What Will Finally Get y-o-u off the FENCE?" - $500 sq/ft

> Hall monitor, is that you?

Seriously, putz, look up what that means!

"Agrees nyc10022. Been mugged on A train more than any other in he 80's. Oh and I've mugged more people on the A train than the others lines in the 80's, so your observations are correct. ; ) "

I preferred to mug on the "safer" trains. I could take most of the guys on the L train... p*ssies.

"steve - ridiculous argument, as always. no one is saying that it makes financial sense to pay the ridiculous $950k asking price for a generic 1bd new build that you can rent for $3k/month."

Oh my god, BREAKTHROUGH!

because there were folks saying things like this before.... "when you add in appreciation"

Have we officially ended that era? Still haven't seen an admittance of wrong.

"Still stand by your comments, Juicy?"

Yes, absolutely. That Chelsea unit for $850k is much less expensive to buy than for you to rent your Chelsea unit for $5000/mo. Can you believe steve pays $5000/mo to rent in Chelsea?

“Wrong on every account, as always.”

Hysterical! steve says he right but doesn't bother to read the thread! He ran away from the discussion. Poor steve, wrong again.

http://www.streeteasy.com/nyc/talk/discussion/13034-the-7-train-line-is-rated-the-best-in-nyc-another-plus-for-long-island-city

"Guys, please don't start that argument with steve again. There are NO winners whenever that starts."

Just tell your BFF steve to stop making silly comments that have consistently been proven wrong and you won't have to read it anymore.

When this chart

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?

says something like "Buying is better than renting after 5 years" instead of what it says now: "Buying is better than renting after 30 years."

lower prices

"I preferred to mug on the "safer" trains. I could take most of the guys on the L train... p*ssies."

LOL.

BFF... LMAO. Why don't you guys just agree that people have different perspectives... I mean burkas don't do it for me, but for some men, a little pink burka # and off to the races!

I'd much prefer you guys argue about the following theory, much more relevant to us as a species:
A) universe continually expands, and our little blue marble becomes so lonely and distant until at some point our sun explodes and we hold marshmellows to the sky or;
B) Universe expands then starts to contract, at which point at some distant point in our descendants lives they all have their arms out trying to stop the impending collision with other planets...

At which point Rent/Buy ratio will mean very little..... yeh... I'm really not that fun at cocktail parties....

Otto... nice nice...

"steve - ridiculous argument, as always. no one is saying that it makes financial sense to pay the ridiculous $950k asking price for a generic 1bd new build that you can rent for $3k/month."

Oh my god, BREAKTHROUGH!

DITTO!

"I preferred to mug on the "safer" trains. I could take most of the guys on the L train... p*ssies."

Wait, you're a wannabe thug too? This is the same guy who thinks McCarren Park is "dangerous"? Hysterical.

"Why don't you guys just agree that people have different perspectives"

I totally agree w67th, I have the right perspective and steve has the wrong one. Totally different.

500 sq/ft.......................that would encourge my but off the fence, as long as that fence was no where near Williamsbug. they would have to pay me to visit the WB. My apologies to all those who made the horendous mistake of moving there. Prehaps if we changed the name of WB to Purgatory, Queens that might improve the chances of the WB. At least with Purgatory there is a light at the end of the tunnel.

bjw2103... boy you really know your on-line anonymous enemies.....

JM, : )

Falco... you're gonna get some shit for that : )

w67th, keep your "enemies" closer, right? Godfather is a model for living, after all (sort of). You've been keeping very close tabs on your deveined cocktail friend, no?

Not as much as my deveined friend has on me... LMAO....

Assuming current interest rates and rents, I'd be a buyer at $500-$700 per square foot. At $700, I'd be a buyer only if I really had a desire to own (which I don't at the moment). At $500, I'd probably do it regardless from an investment point of view.

Did we ever uncover the identity of the shrimp cocktail?

It's an alias for somebody else on this board but, the writing style is not familiar.

By the way if any of you remember the little war we had with the fake (agent) posters who claimed greatness in the RE market...just one note...
They all vanished as mysteriously as they appeared. Had any hung around I would admit a mistake.

So many comments and I have yet to find one serious buyer, and no I don't mean the commentors who want real estate for free!

a real buyer, who for ex amount per square foot would be ready to make a real deal....!

that's the problem...no one has any real idea of what value is. as noted in one of the earlier posts, give us all a reason to believe that prices will remain stable and then if you find a place you like you can buy it confident that you understand what it will cost. stability.

Columbiacounty:

There are those people who have to make a move example marriage or starting out on your own and do need to get off the fence because they simply need a home to live in!

Those are the buyers of tommorow....!

I am interested to hear from people who are really interested to purchase as opposed to investors looking for a freebee...!

Only in NYC (at least in this country) would someone describe 500psf as "want[ing] real estate for free!"

hey fayek: was trying to treat you with respect but you are obviously just another broker pimp. people can rent if they "need a home." you and your blood sucking partners in crime just don't get it, do you? you don't care who gets screwed as long as you get yours.

Novel math, JuiceMan, even after they lowered the asking price $100,000:

Down Payment $165,000
Mortgage Amount $660,000
Mortgage Payment $4,172
Total Monthly Payment $5,022

Somehow, $5,022 < $4,500

For a bigger, newer apartment in a better building.

Wow! You're deluded!

So what IS that rent-to-buy ratio, JuiceMan?

And that doesn't even include the 15% transaction charges!

Price. Price. Price. The prices have been ridiculous for so long that I almost forgot to look but now I realize I've just been waiting for the right time to buy. Make it look like I'm getting a good deal and I'm IN.... I have cash & am ready to scoop up a good deal.

Fayek, I am a pretty real buyer, but am in no rush. I will buy when one of two things happen:

1) I can get a 2000+ SF (real SF, not advertised SF) apt with outdoor space within a 10-15 minute walk from Central Park, in a good school district, with reasonable maintenance for $1.5MM or less (factoring in renovation costs if it's a wreck).

2) 1-2 years passes. This will enable me to save more $$ for a downpayment, and thus pay a bit more for the same criteria. Also, the passage of time will make me a bit more comfortable that I am less likely to be buying too early.

"Somehow, $5,022 < $4,500"

Do you want to ignore the tax benefit steve? Do you want to use your actual rent instead of $4,500.

Regardless of what you do, this is example is certainly within 1-1.5x, which you said could not be done.

Ring up another one bartender.

I'm looking at today's prices, JuiceMan, and rent to an unrelated third party. There is NO WAY you can rent that piece of ... that you think is "equivalent" for anywhere near $5,022. NO WAY.

Do I want to ignore the "tax benefit"? You get to deduct the "tax benefit" when renting to an unrelated third party, so it's there. Do you want to ignore the opportunity cost and the transaction costs?

The truth is apartments equivalent to that $4,500 asking price (the last one actually rented for $3,800) are going for around $1 million to $1.2 million:

http://www.streeteasy.com/nyc/building/125-west-21-street-new_york

Making them cost twice as much as a rental. You pick an unequal apartment that has already had its price lowered by $100,000, ignore any costs that you don't like and say, "Voila, see?!"

You're in la-la land again, Juicy, just like you were when you said Manhattan prices wouldn't fall more than 10%, and that prices have actually RISEN.

OMG.

steve, the example you just gave on the bottom of the prior page does not support what you say:

The truth is apartments equivalent to that $4,500 asking price (the last one actually rented for $3,800) are going for around $1 million to $1.2 million:
http://www.streeteasy.com/nyc/building/125-west-21-street-new_york