1 Bedroom Purchase

Anything is possible. Some people like to point out that small apartments, especially studios, dropped the most in the 1990 downturn. But the most recent boom took larger apartments to ever higher premiums. And the current economic downturn may linger longer than previous ones. Does it stand to reason that smaller apartments may benefit from greater economizing and downsizing? I read that some developers are splitting two bedrooms into studios and one bedrooms. Will the trend of the past twenty years reverse?

but we know that in 2 yrs these apts wont be selling for 600 , right?

Don't know anything.

PMG - is that true? I've read that studios/one bedrooms were much less volatile than larger apts.

it depends on where interest rates are and the value of the dollar. I think low 500s is the highest probable outcome.

A few weeks ago 30yrs reminded us of the time (mid-'90s, was it?) when you couldn't get financing on apartments <500 square feet. The mix of sizes the market wants has gone back and forth quite a bit over the years. I don't know how often builders make the optimal prediction.

Oops, "couldn't get financing on apartments smaller than 500 square feet. I don't know ..."

Angle-bracket strikes again.

village, I believe that smaller apartments have been less volatile in this downturn, but it wasn't the case in 1990. One of the reasons was that tax laws prior to 1986 had permitted aggressive depreciation allowance that generated a lot of investor interest in real estate. Developers in the 80s met that interest with a lot of studio and one bedroom units. In contrast to those times, in the recent boom, developers had a bias for larger units because they sold for higher prices psf.

PMG.....you are saying that low 500s is the highest that 1 bedrooms would rise in 1 or 2 yrs? But they are at the low 500s now......

smaller apartments are eligible for conforming loans. financing is much more available than for more expensive apartments, and credit availability is one of the major factors hindering more expensive units. smaller apartments are also more likely to be bought by first-time purchasers, who may have not been following the market for long, giving them less perspective on historical pricing in their market.

mhillqt- do not obsess - you got a good deal on an apartment you seem to really like, and will enjoy living in for years to come!

mhillqt -- why the premise that the market cannot go lower?

"is that possible?"

yes

"Anything is possible. Some people like to point out that small apartments, especially studios, dropped the most in the 1990 downturn. But the most recent boom took larger apartments to ever higher premiums. And the current economic downturn may linger longer than previous ones. Does it stand to reason that smaller apartments may benefit from greater economizing and downsizing? I read that some developers are splitting two bedrooms into studios and one bedrooms. Will the trend of the past twenty years reverse?"

"PMG - is that true? I've read that studios/one bedrooms were much less volatile than larger apts."

"village, I believe that smaller apartments have been less volatile in this downturn, but it wasn't the case in 1990. One of the reasons was that tax laws prior to 1986 had permitted aggressive depreciation allowance that generated a lot of investor interest in real estate. Developers in the 80s met that interest with a lot of studio and one bedroom units. In contrast to those times, in the recent boom, developers had a bias for larger units because they sold for higher prices psf."

This is part of the RE cycle, although a much longer cycle than the pricing cycle (which has historically been 10 years). Look at all the buildings on WEA where apartments got chopped up. Look at the Osborne. Try to find the original floorplan for the Alwyn Court.

in the last construction boom (80's) most apartment buildings had lots of studios and 1 br's. so the existed already, so for the neex5t boom, there was a shortage of larger units, so in the current boom you saw lots of large units. But correct me if I am wrong, it now looks like the largest units are having the most amount of trouble selling? So what will happen? Up till not we saw lots of people buying the apartment next door because it was cheaper than buyer a larger unit. Maybe that will change? Maybe it won't.

10 years from now will ties/lapels be wider or narrower?

ph41......yes it was a good deal in this market...but after waiting so many years......i couldnt pull the trigger since i felt that i owed it to myself to see this thru another 1 or 2 yrs to make up for all the lost time and trying to get a price closer to 2001 rather than 2005.......sad but true......

Mhillqt - Very sorry to hear that you are putting off your dream - you really are spending too much time on the SE boards, which I think has eroded your confidence in your own judgement. Seriously, if you do a search of Manhattan, doorman bldg, TRUE one bedroom with a $500K top price, how many do you come up with?

I know this is just my own opinion, but I seriously doubt we will see prices at 2001 levels in the next 3 years, if at all.

"I know this is just my own opinion, but I seriously doubt we will see prices at 2001 levels in the next 3 years, if at all."

yeah perhaps, but regardless, the prices are still going down.. so why not just be little more patient, when you've waited for so long already.

because 2001 was ancient times? or eight years ago. because the run-up wasn't induced by a credit bubble? because 2001 hadn't already seen large gains for a number of years? well, then, you must be right.

I still say, has anyone done a search for under $500K? TRUE one bedroom(NOT converted alcove studio)? Doorman building? Already renovated? Right - wait until the cows come home.

Oh, and at least 700 sq. ft.

and with maintenance under $1,200?

http://www.streeteasy.com/nyc/sale/348559-coop-309-east-87th-street-yorkville-new-york

Aboutready - do you really think that that awful looking place in YORKVILLE is enough of a comp to the 35 Park apt.? To a place with Park Avenue address (even Park Avenue address in much maligned Murray Hill) which can add to resale price?
That's what you could come up with? You really proved my point.

you're an idiot. that's the first one i pulled up, and it meets your criteria. and it's LISTING price, not closing price.

Not nice to call people names because they don't agree with you. (guess you're teaching your child wonderful life lessons). Do the search a little further and see how many other apts. you can get - in decent areas - I did that exercise, you're just lazy.

if you seriously want to see what is happening in the market, fork over the $10 and do searches in the neighborhood you're interested in for recorded sales. tomorrow i'll take a look, but that's where you'll see what things are really going for. it hardly matters if something is listed for $550k if it goes for $450k, and that will really tell you what your chances are.

ph41, you spent an inordinate amount of time the other day trying valiantly (but ineffectively, which may explain quite a bit) to insult me. i feel no regret calling you an idiot. and nice to try to generalize an internet style to my mothering style, and my daughter. real classy.

I have forked over the $10, and do a lot of searches. I wasn't trying to insult you, just asking you why you feel so free to give purchase advice to others, when you will probably never purchase yourself. If you feel that was an ineffective attempt to insult you, I would say I must have really touched on your sore spot - actually, rather effectively.

Oh, and right, I'm the idiot in the 3,000 sf. apt., with wrap terraces, wbf, 9 ft. ceilings, full washer,dryer - purchased for what now seems like an incredibly low price.

NO one is WRONG in this market...there is so much indecisiveness AND uncertainty.....and ph..you are right....it is a great price that i got....very very good for this market and location...but who is to say that in 1 or 2 yrs that it might be 20% lower....i waited this long...my gut told me that for peace of mind i need to wait 1 or 2 more yrs to feel more confident about my purchase....i might get screwed in the end......who knows.....plus i might jump in and buy tomorrow.....as you can see....im very up and down with this stuff......

Purchased way back in 2000 and believe me, that price will NEVER come again.

Mhillqt - Do YOU really believe that it will be 20% lowerin 2 years? Do YOU want to keep living in the studio apartment which you seem to be so tired of? If you feel that you will live in the apartment for many years to come, and if you think that the economics work for your current budget, and if you have seen a lot of other things out there that didn't work, or that you didn't like - then try to make your own judgement rather than listening to all these strangers (including myself).
I will tell you that I almost didn't buy my apartment because I didn't LOVE the street (though it's actually very good - just not really charming) in Murray Hill - backed out of the deal at least twice. Now, I can't imagine living anywhere else (well I could, but it would be for at least 6 times what I would sell this place for).And everyone who visits feels the same

ph41: nobody cares. Many of us own and yet believe the market is due for another leg down.

ph...you backed out of the deal 2x and then they still accepted your offer?

also ph....i never thought that manhattan would fall 20% in the last 6 months...so its anybody's guess that it could happen again...this is the worst economic times since the great depression...foreigners arent buying...people are getting laid off.....wall street bonus' are a mere pittance of what they were.....its possible...but who knows..trust me....im up and down on this.....

Mhillqt - foreigners weren't buying coops anyway - and Wal] street bonus money wasn't buying 1 br apartments. and haven't you heard about Goldman Sachs and Citibank bonuses going up again?
and jerkstore -I think prices have already gone over the cliff - maybe gentle slide now - even if not quite so gentle, do you really think 2001 will come again?

and Mhillqt - the sellers were rightfully very, very annoyed,but the apartment had been on the market for some time, and I said all the right regretful things

So, have you told me yet why prices won't revert to 2000 levels, after a credit-fueled boom for the ages? and don't give me the coops are different speech. they were affected, albeit less, by the price inflation caused by mania as well (and a host of other factors that i'm sure you've read and ignored, or rationalized away). Just because you bought then and would like to keep your perceptions intact? Lots of people and businesses would like to do so.

Well, actually, since a smaller apartment in my building, no wbf, no terrace, no high ceilings just sold 3 months ago for about 3.5 times what I paid, I guess that has helped keep my perceptions intact. And the credit boom began well after 2000.

BUT, you can go on dreaming of your perfect apartment at 2000 levels - sometimes dreams (or fairytales) do come true

as i've said incessantly, i don't care. i may buy for our daughter, but really i'm looking ahead, so i'm not looking at manhattan. i don't need fairy tales.

prices started dropping this year. real estate cycles take years to play out. tell me why the comp matters in the slightest in the longer term, with mortgage delinquency issues expected to peak at the end of 2010, huge amounts of inventory not yet absorbed, risk appetites among individuals lowered, taxes increasing, incomes decreasing, inflow of residents decreasing, maintenances exceeding the means of many people who bought a couple of decades ago, aging baby boomers needing equity removal, appraisals coming in below offering, banks tightening credit for all things and most likely tightening further for real estate (coops increasingly, as well as condos, will have homeowners in arrears on maint. and cc), parents of young people increasingly unable to help, no move up buyers, tax credits for the lower units expiring, bottom-basement price level competition from new developments in the boroughs that will likely go through liquidation processes first, and just a damn reaction to price declines, that tends to feed on itself, the reverse of the upward mania.

i'm certain i've forgotten a few things.

Basically, you've given up on the idea of buying even though you don't really love where you are - and what is this about buying for your daughter? What, in 15 years?

You really should be an academic as you definitely love to endlessly, and fruitlessly, and pointlessly enter into long, and in the end meaningless analyses since you're not going to take any actions in the near future based on your conclusions. You just rationalize your inaction.

why does everyone have to argue so much on this board? I dont understand why people cant just have differant opinions...some feel the market will go up...some feel it will go down......and others like me are CONFUSED...cant we just leave it at that? ph......i actually didnt even back out.....my sellers didnt meet my lowball several weeks ago and i walked away... then they came back to me this week and i decided against it for a variety of reasons......in your case...you did back out and you were very fortunate because you bought at the right time and your apt has appreciated......

sorry mhillqt, on many levels you're right. but ph41 seems to be personally offended that i choose to live in Peter Cooper Village.

ph41, let it go. i'm 46, my husband is 16 years away from mandatory retirement (and his area of the law means he can retire and practice anywhere), we have bought a few times, i'll buy again when, if and where it makes sense. and since i've done quite well i'm comfortable with my decisions, and i can tell you that now i don't think is the time to buy in manhattan, with a few exceptions (based on life circumstances, estate sales, etc.). I saw a deal today where someone sold an apartment that they bought for $1.1m a few years ago for $4.7m. i thought holy shit, and then i pulled up the deal and the seller had bought it in a bankruptcy proceeding. dreams do happen for some, i'm not looking for that.

i'm lucky, i can buy an apartment for our daughter (who's 12, btw) when and if i feel like it. and it won't happen a moment before i think it's financially wise.

Mhillqt - I thought I saw you post that you were going to do it - everybody was congratulating you, and telling you to take the posting down so nobody else would snatch the apartment away before it went to contract.
I don't really care that my apartment has appreciated because I have no intention of selling it - in your case I would assume that you are buying to live in it. The whole idea of guaranteed real estate appreciation is what helped lead to the real estate problem in the first place.

ph41, they were telling him (me included) to take the thread down in the event he wished to go forward. nobody was discouraging him, if he still was interested. particularly as someone decided to start playing guessing games, it made sense to advise him to remove the thread until he had chosen.

aboutready I totally agree with you, nobody was discouraging him (or her) but, in fact, everybody was very encouraging. I just feel that with all these posts about "down,down,down" people like Mhillqt, who was actually ready to buy,and happy with the prospective purchase, having done a lot of homework in the area, get totally freaked out, and wind up freezing into immobility

And I happen to believe that 5 years from now, Mhillqt will go "woulda, couolda, shoulda".

ph41, you're right. but mhillqt feels strongly that any potential loss is not really viable (sorry, mhillqt, do i have that right? you don't feel in a position to risk a loss?)

so, coming from that premise, with someone who has described his personal situation over the years, i feel a conservative approach would be best for that person, but i also thought that the low-ball offer that was accepted was interesting. mhillqt found it interesting, and i'd guess a bit disturbing as well. like the discussion in falco's thread earlier today, the mentality involved in offers and acceptances is interesting. if someone says yes, does that mean you've offered too much or put something on the market for too little? it's tough to tell.

i think that toward the bottom of a market, absent another bubble which in the short term i can't guarantee won't happen, you can usually tell where prices have landed. there may still be, for the usual reasons of death, divorce, illness, etc., some really good deals, but the price range will have firmed considerably. right now the range is all over the place, within like units, which to me suggests that price corrections are still occurring.

of course you realize that my you're right isn't to the woulda coulda line. there's still a number of years between now and five years from now. kind of like we're only nine years from 2000.

ph....everyone was congratulating me ...but people didnt read the thread carefully...i was saying....NOT SURE WHAT IM GOING TO DO.......so everyone jumped to the conclusion that it was a DONE deal...which made me uncomfortable...also.....its not about appreciation...its about keeping my monthly payments low.....an apt for 500k.....is more expensive than an apt for 400k.....even if it goes up to 800k.......capice? :).....like i said...i might wait or jump in again...who knows.......ph......thanks for the vote of confidence on the woulda coulda shoulda statement....easy to say when you bought at the right time and your apt appreciated in value.....but i get your drift.....hopefully my cycle of not buying will break at 'the right time"

mhillqt, at least people aren't accusing you of being a real estate agent any longer.

take your time.

lol....thats TRUE!!!!!!!!!!!!!!!!!