Sideliners - how has your strategy changed?

Well...i agree...the bottom will not fall out of the nyc real estate market......it would have happened but the bailout prevented the market from tanking....so we are stuck with higher prices and 0% interest rates on our savings.....so the big guys win ...ie banks and the little guys lose..ie us....
I wish i purchased the apt on park ave in the east 30s last month...it was a steal...i dont think it will go down that low....and have resigned myself to praying i find a steal like that again...but it will prob take time...so im stilling looking and waiting.....and i could have been already sitting in my nice new apt...oh well.....fear mongers got to me......go with your gut.....

Mhillqt, whatever decision you made I'm sure was the right one. And I completely agree with your assessment of the banks vs. savings snafu. So do you have a particular method for looking? Or are you pulling back for now?

Take comfort, there will be another apartment.

As long as rent-buy equation is weighted in favor of rent, prices will fall. Patience.

prices are still falling. I actually feel much more comfortable waiting now than I did a couple months ago. the blow ups in down town brooklyn will hit williamsburg while simutaneously you will see big price chops in the new developments in manhattan that will take the whole market lower. its inevitable

So, would you characterize your strategies as wait-and-see? Or are you taking a break from the open-house market?

Lately I've been targeting several apartments in a single building and grilling everyone about the board and the building. And if prices do fall, well, the sooner the gap between my down payment and the price will close.

"rather than looking at specific apartments I am taking detailed notes on the buildings themselves. I've identified four or five buildings this way, and I am tracking their inventory closely."

I have always advised buyer not to go out and "narrowcast" - looking for a specific apartment .... because is may not exist: just because you can think up an apartment doesn't mean they ever built it. So I think you are on the right track. The only thing I would add is that you should also use this time to visit buildings that you DON'T think will meet your criteria, because they may either surprise you, or you may learn some things in looking in these buildings about your tastes, etc. This would very specifically include looking in buildings which are absolutely outside the geographic are you are targeting: there is not question that there are apartments and buildings which exist in some neighborhoods which don't exist in others. In addition, even though you may think you aren't willing to make a location trade-off in order to get more space or other factor, you may find yourself in some apartment in an area you never would have looked at going "OMFG!!! I can get THIS if I'm willing to live in the area?" This is especially true if the market falls and you find you can get VERY different things trading off location.

I dont even go to open houses right now

Thanks for the good advice, 30-years. My desired areas are pretty flexible, and I've already looked in a lot of neighborhoods. But I'm still open to suggestions!

I can't seem to give up the open houses. They're just too much fun.

mhillqt, i am really seeing tremendous movement in the smaller units. you are being a bit overwrought at this point in saying that it was the steal of a lifetime and you'll never see anything like it again. as 10023 says, patience. and next time, if you are going to beat yourself up so repeatedly for not having bought, buy.

evnyc, i agree with you depending on the neighborhood. it's extremely valuable to have your own personal database of properties where you're likely to succeed, the floorplans suit you, and you like the surrounding neighborhood.

some of the neighborhoods have more options, making it a bit more difficult because a building may have had very few sales in the last few years, and yet it might suit you perfectly. and i agree with 30yrs, i'm actually seeing some things in the UES that are making me wonder. and midtown east? hello, there, sailor.

"My hope is that the market will simply side-step for a year or two, allowing me to bulk up savings again."

That is a risky strategy. When inflation comes, your money is going to lose value. I know many people dispute that hyper inflation is coming, but then why would gold be $1,000?

I've been weirdly tempted by the UWS. I never thought I'd like it, but lately...I've been kinda swayed. We'll see where that goes.

AR, have you ever looked at 193 2nd Ave? I wasn't able to remember the address in a previous thread, and now I can't find the thread I mentioned it in. I had looked previously at #4, back when I was poking around just for fun, and it occurred to me that it has some of the qualities you have mentioned liking. I will say that when I visited #4, which looks onto 2nd ave, it was L-O-U-D with traffic noise, but I think the apartments overlooking 12th are much quieter and I suppose you can always install better windows. That's one building on my list.
http://www.streeteasy.com/nyc/building/193-2-avenue-manhattan

I am happy to be waiting. Sellers will not be selling that well this spring. New price cuts are coming in 3-6 months.

Rent on luxury apartment with great features and beautiful view = $4800.

Present (approx) purchase price of equivalent apartment = $1,800,000.

NYTimes Rent vs. Own calculator still tells me it's "30 years before it's better to own vs. rent."

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

Just sitting tight. If Manhattan is still crazy in a few years, we'll be looking elsewhere at possible retirement destinations.

evnyc, thanks for the tip. you might want to look in morningside heights if you're a downtown sort of gal, if it's convenient.

I meant sellers will not be selling that easily this fall...spring is just starting down here....

President, my take on inflation and the housing market:

It will push prices down. Why? For one, any increase in the price of staples like food and energy- which will inevitably be hard hit by inflation- will divert funds away from housing. In addition, a substantial increase in inflation would push up interest rates and therefore require larger monthly payments to uphold the price points we are seeing today.

I see any type of inflation as being pretty devastating to the housing market.

1) Wait and see
2) A 20-25% drop in RE value in 1 year is pretty unprecedented. Read the FDIC report on booms and busts.
http://www.fdic.gov/bank/analytical/fyi/2005/021005fyi.html
They define a bust as 15% down in 5 years vs a boom as 30% up in 3 years. The reason that the definitions are asymmetric is b/c busts are "sticky" and if you used the same definition of boom and bust, there were too few busts which met criteria.
3) FDIC report also describes inflation is really what erodes the value of a home overtime b/c of "stickiness". People will hold on to their home as inflation erodes the real value. If you are really afraid of hyperinflation, jump to gold.
4) YMMV. It depends on the time of your life. I'm happy with the flexibility renting affords. I may not be in NYC forever, maybe even not next year. If you want a true asset, you'd want a condo b/c of the flexibility to rent. The price to rent ratio is getting closer for coops but for condos it is still miles apart.

looking still but don't see a lot of good deals out there that makes us comfortable enough to plunge in. still see downside risk overweighting the upside.

Was smart not to buy a place back in March-May - stocks went up 50% since then. feel sorry for those who used their money as downpayment for a house/apartment then, as they could have increased their wealth by 50% if they didn't listened to all the real estate brokers (The President, wonderbra etc) out there shouting "buying is smarter than renting"

now that the dead cat bounce (buoyed by government stimulus) has reached it's 7-8th inning, I don't feel comfortable being in the stock market, but this also means if the stock market starts to go down again (and that;s a big IF, with all the money printed, I don't know where else you could park your money other than the stock market) I feel the optimism in the real estate market will dissipate with the falling market.. so am sitting on the sideline still. looking for that one sale that would make us comfortable parking our money as long-term investment...which is not many.

Recently have expanded our focus to Westchester.. heard it's a good neighborhood to raise children. (Any thoughts here anyone? has it gone down further than Manhattan?) I've started to stretch my horizon longer seeing the state of the economie - to 10 years rather than 5 years and that could mean buying a 3-4 bedroom house up in Westchester rather than buying a 2 bedroom here in the city..we'll see how things go...

during all previous cycles of high inflation, real estate has went UP in value.

I don't have a strong opinion on the direction of home prices. My question is for the market bears: What in your opinion are the biggest negatives on the horizon for NYC real estate. I'm looking for a 2BR near central park, but am interested to hear your opinions on the market generally.

Thanks,
The Good Life.

HI, just a international perspective. i wanted to buy in London, prices were down 30%, but still too high for my taste. Even at the worst of the crisis prices were double what they were when I left the city 5 years ago. Anyway, they are now almost back to their peak level and still going up. Same in France. Be careful not to miss the bottom here.

Good Life, my personal opinion is that prices will lurch along much as they have been for at least another year. I really have no idea what happens after that. Long-term I do think New York is a good investment. The question for me, since I would be living in this investment, is whether or not I can afford a large enough place to raise a family. So far, no such luck.

I could be totally wrong and Viran could be completely right, too. Since the gap between my down payment and housing prices is still too wide, I keep researching and hoping.

"Well...i agree...the bottom will not fall out of the nyc real estate market......it would have happened but the bailout prevented the market from tanking....so we are stuck with higher prices and 0% interest rates on our savings.....so the big guys win ...ie banks and the little guys lose..ie us....
I wish i purchased the apt on park ave in the east 30s last month...it was a steal...i dont think it will go down that low....and have resigned myself to praying i find a steal like that again...but it will prob take time...so im stilling looking and waiting.....and i could have been already sitting in my nice new apt...oh well.....fear mongers got to me......go with your gut....."

If you are a buyer and you find a deal, why in the world would you wait?
A month later, the unit gets sold and you're stuck with nada and potential higher prices.

I just can't believe there are so many morons on these boards.

"prices are still falling."

This is so wrong. Prices ARE not falling. Many of my clients (buyers) are now offering higher prices than 6 months ago. A few months ago, many people were putting in bids 20-35% below asking price. Those bids are now in the 15-20% below asking. The mentality of the buyers are starting to switch again.

Carol, try reading the news once in a while, would you? Prices are, in fact, still falling. You could argue not as hard, not as fast, but not at all is flat-out incorrect.

"I am happy to be waiting. Sellers will not be selling that well this spring. New price cuts are coming in 3-6 months. "

Mimi, didn't you say that 6 months ago? Where's the big cuts we're all expecting?

For the uninitiated, CarolSt is a particularly nasty broker with little to add to discussions.
http://www.streeteasy.com/nyc/talk/discussion/12106-carolst-a-case-studytime-line-of-a-re-broker-going-thru-ses-spin-cycle-and-breaking

I personally recommend the "ignore" setting for her.

I understand that Wall Street bonuses have a major impact on NYC real estate prices. And I don't know how the bonus story will evolve. There's talk of limiting Wall Street pay. To figure out the direction of NYC real estate, does one need a crystal ball on Wall Steet pay?

The fed has positioned this country to erode debt over the course of the next few years. You can't ask for a better environment (Inflation & Low Rates). There is so much money sitting on that sidelines that when the time is right, it's going to feel like a tsunami.

Cash = Trash

TheGoodLife,

We're looking at record bonuses and salary increases in many of the Wall Street firms this year. If this has a positive effect on the NYC property market over the past 2 decades why would it be different this time around?

"Carol, try reading the news once in a while, would you? Prices are, in fact, still falling. You could argue not as hard, not as fast, but not at all is flat-out incorrect."

I'm not saying Carol is right, but anyone know the price per square foot average for Manhattan over the past 24 months? Have the trend continued to fall? I'm certain the rate of decline have slowed.

Do you guys really think that this recession is over? Fasten your seatbelts. The problems have not been fixed, only masked. After reviewing all that economic data that Riverside and Aboutready have posted here (thanks by the way), I can only believe that the world economy is in for another blow. So evnyc, be patient.

"After reviewing all that economic data that Riverside and Aboutready have posted here (thanks by the way), I can only believe that the world economy is in for another blow."

AboutReady found this rally in the equity market from the bottom. If she didn't see this bounce, what makes you think she knows what she is talking about?
She also sold her place in 2004 which was 3 years early. If she couldn't time the top back then why would ANYONE treat her rants like the yellow brick road.

Take your pick... Benanke or Aboutready?

"AboutReady found this rally in the equity market from the bottom"

Sorry meant to say 'FOUGHT'.

i'm starting to see apartments where if i adjust for inflation i get to or am close to a 2000 price. that's something i had not been seeing until recently, so i'd say yes prices are continuing to fall. i've seen some summer sales that are closing at firmer prices, but i'm seeing more that are closing for lower prices. and i think that the acceleration in the reduction of the prices for the resale smaller units, which are eligible for conforming loans, speaks volume about the strength of the market.

I think 6 months is extremely optimistic. It will be a gradual, multi-year slide to the bottom, with several up-ticks along the way down. That's what happens in NYC. Sellers are stubborn, and will eat their carrying costs as long as they can, even when supply is way beyond demand.

Prices won't come down to anything reasonable for a few years. The last crash in NYC didn't hit bottom until 8 years after it started.

"More people signed to buy new homes in Manhattan last month than in the previous August, but most of those homes sold for $1 million or less.

And it doesn't look as if the luxury market's coming back anytime soon.

In all, 654 buyers agreed on Manhattan homes worth $500,000 or less in June, July and August, compared with 388 in the summer of 2008, but only eight agreed on homes worth $10 million or more, compared with 39 the previous summer."

What this means is that based completely on the unit mix that is trading that average home prices will fall - perhaps call it the reverse 15-CPW effect -even if 1,000 studios traded for their 2007 prices if no expensive apartments are trading the average and mean numbers will fall - the unavailability of jumbo loans will continue this tread for the foreseeable future - the press will get these numbers, people will see them, and when they do everyone will become more bearish. These data will not be good for the psychology of the market.

We go lower from here and we don't go higher until investors become a significant portion of the buyers.

I'm nervous about the NYC unemployment rate which has skyrocketed lately.

10.3 8/31/2009
5.8 8/31/2008
4.5 8/31/2007
4.6 8/31/2006
4.7 8/31/2005
5.4 8/31/2004
6.6 8/31/2003
6.3 8/31/2002
5.1 8/31/2001
4.6 8/31/2000
5.2 8/31/1999
5.4 8/31/1998
6.6 8/31/1997
6.4 8/31/1996

Heh, no choice but patience, NYREnewbie!

Goodlife, your concerns are completely valid. Most sales are taking place at the low end of the market, where people who had previously been priced out of the market and were sitting on savings saw opportunity and a deal sweetened by tax benefits. Employment figures and questions about Wall st. comp make me extremely cautious about projecting future markets. So I watch my buildings and wait.

AR, will definitely pop up to Morningside Heights for a tour soon. Thanks!

I feel very good waiting. the financing which allowed such puchases in the past is gone and never to return. That coupled with the oversupply and reduced demand, is driving prices lower.

I also wonder what Asia is doing in NYC real estate, Japan in particular. I've read reports that Japanese investors are very bearish on the US economic outlook, having lived through a housing collapse of their own, and I wonder whether they will be buying NYC property anytime soon. I don't know, however, what segment of the market they were most active in.

take the predictions of SE posters with a grain of salt, especially those who predict gloom and doom. NONE of them predicted the surge in sales we experienced last summer.

but we all predicted the price decline which is what counts. and still counting.

President - I predicted more sales - sure I don't post everyday like others but.... I even noted that in Vegas the monthly sales numbers are up for 20 months (ish) in a row - each month more and more units sold - right now Vegas closings are near all time highs - BUT each month prices go lower - more sales does not mean higher prices.

Agree. The reason for the uptick in sales all over this country was lower prices, not the stock market going up.

jazzman, i read that the north vegas rehab facility may have to close due to lack of money. seems like bad timing to me.

alpie, i also said that i wouldn't be at all surprised by an increase in sales. these things don't run smoothly.

Flmao. Ericho and carolst, you guys should have babies so that my kids have a better shot at harvard.

Really, et tu ericho cash= trash? Riddle me this batman, if so?, then how come so many people want to get rid of their home/boats/planes and associated debts and turn them into => you guessed it CASH?

w67thstreet, is it possible for you to post without cursing?

For you carnie. Flamingo laughing my arse off.

"my kids have a better shot at harvard. "

With your SAT score, and the fact that your kids have your genes...no chance brotha.

"We're looking at record bonuses and salary increases in many of the Wall Street firms this year. "

more make believe. is "many" a number greater than one? give us a break.

I always picture W67th as a sailor, complete with eye patch and a parrot on his shoulder. Arrrh, matey! Sailors cuss!

It seems to me that we are looking terribly Japanese in the long term. But then again, we're sort of in uncharted territory here. Even the Japanese example isn't 100% analogous.

"Agree. The reason for the uptick in sales all over this country was lower prices, not the stock market going up."

I think one can make the argument (Noah at UD certainly has) that the uptick in the stock market increased buyer confidence, which in turn got more sideline buyers to finally pull the trigger, especially here in NYC where finance rules the day.

w67's kids going to Harvrd? yeah, sure. Unless you mean Harvard Extnesion, not a chance pal.

evnyc, i bet you celebrated talk like a sailor day. i just know w67th did.

alpie, and now it's declining again. not linear, bumps and grinds. and what do you think might happen if the market collapses again? which could VERY well happen. jesus, the babies on wall street (traders) cry buckets at any indication that the gov't and the fed might pull their life support. see here, you assholes, i'll show you what i can do to your economy. just dare to reduce the stimulus. but money based on nothing isn't infinite.

only so many people with the savings and income to buy under these conditions. the people i truly feel sorry for? the younger people who are committing to insufficient space just to get into the market.

I had no idea such a thing existed! September 19th. Drat. Well, there's always next year.

w67thstreet
about 8 hours ago
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Flmao. Ericho and carolst, you guys should have babies so that my kids have a better shot at harvard.

classic doggie.

Never is happy enough doing well on his own. Never can be quietly successful Always has to brag; always bring other people down: Grave dancing on other people's misfortunes. Cheating his tenants. Getting into fights. If his current possessions and accomplishments aren't enough to impress, then he reminds you he grew up making beaded jewelry with his mother starting at the age of 8 and then in the same breath tells you he's now married to a doctor.

evnyc makes no sense-sounds like a realtor/seller. The younger people are really effed--they are bailing out boomers in all sorts of ways: buying overpriced houses, supporting social sec/medicare that it will be bankrupt before they are eligible, buying an overpriced stock market, carrying an enormous country debt.

"We're looking at record bonuses and salary increases in many of the Wall Street firms this year. If this has a positive effect on the NYC property market over the past 2 decades why would it be different this time around?"

It depends on the record: if the bonuses are distributed to 10% of the number of people they were in the past, these people aren't going to go out and buy 10 apartments each.

"I think one can make the argument (Noah at UD certainly has) that the uptick in the stock market increased buyer confidence, which in turn got more sideline buyers to finally pull the trigger, especially here in NYC where finance rules the day."

i agree with this, but what isn't clear about how many sideline sitters there are who got, or are going to get, enough confidence to finally pull the trigger, and if there are another set BEHIND them after they buy, or are they a one shot deal, so to speak.

IMHO. One load shooter.

Wow, pitchfork, you really picked the right handle. Not a realtor by any stretch, just one of those effed younger people bailing out your generation.

"sounds like a realtor/seller"

Can't stop laughing...you have to buy something before you can sell it, n'est-ce pas? Oh, right, unless you're a naked short-seller. Too sophistimacated for me. Just looking to wedge a foot in the door, as any regular on this board knows.

record year for the street ? some people will get paid, but ist the same people that have been getting paid all along. If bulls are counting on the street to bail them out, they are in for a rude awakening.