Cold Feet re: Apartment Purchase

30 yrs: " I can see I've asked for multiple "proof of life" evidences of the position that long term it won't happen, and I've yet to see even an attempt at an answer."

I think no one has answered this request because a) you would have to put together some research - time consuming and b) this storm is absolutely incomparable to any other time. Not comparable to the 30's and not comparable to the 80's.

Though I have no idea if any new NY RE deal will pony up big returns in the long run - here is where I would be concerned. First, we have had one of the longest runs of prosperity in history. That era was clearly not sustainable and we are unlikely to see it again for a long while. And secondly the demographics are rather frightening. The largest segment of the population, baby boomers, are in a down mode -- downsizing, selling, retiring, hoarding. Younger demographics don't have the heft in their numbers to take up the slack and, as the cultural and racial profiles change, there will be conflicts. I am waiting for the young latinos to come together as a political force and basically say that there is no way they are going to continue to pay the social security benefits for some old geezer to play golf in florida while they are carrying a national debt load that would make Atlas weep. And finally, this bubble was crazy. If NY apts went up 300-500% or more in the last 10 years, who is to say that it won't take 15 - 20, or even 30 years to wring the excess out of the market. It has certainly happened at other times in our short history.

So maybe, just like most other times in financial history, a long term RE investment will pay off. Or...maybe this time it is different.

apt23 has just called that the next few years will be worse than "The Great Depression". mark it down... I certainly have.

"30yrs, so what if you'll make money in the long term?"

Because that's all that really matters?

"Although we have had a massive construction boom, it was never as large relative to the size of the population."

Of course, those cities never had anywhere near the price levels we had.

Point is, that was already priced in, meaning it won't necessarily help much in stemming declines.

Some words of wisdom from Keynes, 30yrs: "In the long run we are all dead."

In LT we are all dead. Is it me, or am I the only one that thinks the marginal utility of getting a Porsche at 30 is greater than getting it a 60?

Let's assume an "average" LT home buyer is 30 yrs old, so in 30 yrs you'll be "ahead" Whatever that means.... so you spend 7 years under water, 10 not thinking about it and 13 being up (as to compared to what, I don't know but it had be BETTER than renting, no?). Great JOB, you are 60yo, b/f being "financially" free from you "HOME."

Let assume you just miss 1/2 of the downturn which I am predicting, (I think $500psf nyc prime is not unrealistic). So for an above average 2000 sf apt, you're buying at $750psf versus $500psf, or $500K. wait 2 yrs, save $500K, plow $500K into a ho hum 4% yielding asset.... you have a $1.657K nest egg. FYI, 20H to 11H in 2 yrs went from $2.8MM to $1.5MM, or $4.307MM in 30 yrs....

BUT F I got to paint my wallz rainbow unicorns!

Oh and I think for all intents and purposes this is a very modern "version" of the GREAT DEPRESSION. Yeah we drive around lithium ion cars, and can fly 500mph, and eat brie instead of american, but U is at 17%, beginnings of the disintegration of "families", breaking up of communities, and a decade of production to be lost... yeh, GREAT DEPRESSION with 1000 cable channels.. this it it.

So 67...when do you think we will see some signs of incipient panic by sellers? So far it seems denial and wishful thinking reign, but I'm not sure how many buyers are dumb enough to help them keep the delusion going, but of course, if enough buyers did play along (buy at asked prices) the delusion would be...reality. How long can the market be stuck on a not too far down step, before it gaps down?

well, look at the past... this is why it took FOUR YEARS for the manhattan RE market to bottom after the 87 stock crash.

All along, you had folks saying "this is the bottom" and lots of rationalizations.

30yrs, you'll make a lot more if you buy closer to the bottom than the top. i can't see any rapid appreciation, and i see lots of room for depreciation. wouldn't try to time the bottom, but wouldn't ignore fundamental economic issues either.

if you're really dying to own your own place, well that's different. everyone has different risk/benefit analyses.

jim, it will be stuck until it is not. rents are declining, incomes are declining, demographics are troublesome, and credit is still tight. i've heard some reports of credit thawing at the $1-2mm range, but it's likely temporary. the gov't can't indefinitely prop, and the fundamentals aren't there for real estate. more money than ever is being shifted to the top, here and abroad, it isn't sustainable.

jimstreeteasy... my friend just got a call about a "dead" W'burg condo. They are buying the mortgage from a "large" institution. The vultures are planning on converting to rental. Like I said, the where the rentals go=> prices will follow. There are so many ppl brainwashed into putting a HUGE premium to owning that it won't be till the monthly maintenance fee = a comparable rental, that "panic" will set in.

We are very close to this situation. Another year, cause "everyone" and their mother is thinking this bonus will TURN this ship around.... it's literally the "urban" myth of a 25yo I-Banker buying your distressed 3bdrm in 2 weeks ALL cash that every "secret" seller is dreaming of every nite.

This is what I call the "Oprah" effect. When she paid gobs of money in Santa Barbara, "EVERYONE" was rich, rich rich!!!! Till there was NO Oprah 2.0.

Let this bonus season pass.... capitulation or re-acceleration of decreasing prices in summer and fall of 2010.

"In LT we are all dead. Is it me, or am I the only one that thinks the marginal utility of getting a Porsche at 30 is greater than getting it a 60?"

Funny phrase to use, since when we're talking RE, it's exactly the opposite when we're talking about owning your home free and clear.

so anything we can do to own a "home" free and clear more quickly would be a net benefit, no? Oh like buying it for 30% cheaper when that is where we are headed from here?

"30yrs, you'll make a lot more if you buy closer to the bottom than the top."

Nice tautology. But everyone is assuming they will be able to call the bottom and the top. I'll repeat the Baruch Singer quote: “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” "

"it's literally the "urban" myth of a 25yo I-Banker buying your distressed 3bdrm in 2 weeks ALL cash that every "secret" seller is dreaming of every nite. "

A moron can dream, can't he? (steveF, can you hear me?)

But, to put it another way, historically, if owning long term, the gain from buying at ANY POINT (even the top) of a cycle vs any other point in that same cycle is FAR OUTWEIGHED by the gain of subsequent cycles, where each peak is a new peak, but each trough is closer to the prior cycle's peak that it's own new trough.

"so anything we can do to own a "home" free and clear more quickly would be a net benefit, no? Oh like buying it for 30% cheaper when that is where we are headed from here?"

So waiting 3 years to take out a 30 year mortgage gets you there faster? Is that the "new math"?

You guys are so tripping over yourselves that it's a "flat fact" the prices are going down another 30% that you are only willing to calculate THAT in as a fact, but nothing else. It's really quite pathetic in terms of mathematical modeling. Fine: give me 30 to 1 odds that we're going down another 30% from here and I'll put up $5,000, you put up $150,000. I mean, if it's such a flat fact, you should be willing to give me 100:1 odds. Or 1,000:1 odds. How about it? I'm sure we can find some legal escrow in LV for this bet.

" FAR OUTWEIGHED by the gain of subsequent cycles, where each peak is a new peak, but each trough is closer to the prior cycle's peak that it's own new trough"

AS COMPARED to WHAT? Diamonds , GOLD, being a B-List "star".... that's TRUE of EVERY ASSET at some point, no? Since we haven't written the last page of history we won't know for awhile... and even after history ends it takes statisticians 10 yrs to decide when it ended. Gotta go.

Well, here's an interesting twist that happened late this afternoon. After the broker told us that it looked a deal was very very close, the seller reached a contract with another buyer whose offer was "significantly higher" than ours. So who's the idiot here.

You re the moron for losing the 'deal'. Lobster I call bullshit on you. What a fucking set up. Corcoran or halstead?

Why is it that everyone assumes that a home should only be bought if it is an appreciating asset? w67 wants to buy a $130,000 Porsche at age 30, but do you perform the same lease vs. buy analysis and forego buying a depreciating asset in favor of leasing? What about the many markets in the "heartland" and "rust belts" where property values over decades have barely outpaced inflation? Does that mean no one ever should buy, because all you have is downside risk?

There is nothing but downside risk buying a $130,000 Porsche, or that flat screen t.v. that cost $10,000 five years ago. Does that make them irrational purchases, when the Porsche is sold five years from now at a 30% loss, and the t.v. is just thrown away? And, as 30yrs points out, all of this back and forth assumes a 100% certainty that the markets have a long way to go, and no near term prospects for recovery. And, the risk of market deterioration is always present. I know lots of people who wrote big checks in the early 1990s in order to sell apartments bought in the late 1980s.

I don't think anyone here disputes that, from a rent vs. buy perspective, the economics favors renting right now. Yet, the rental pool often leaves much to be desired, as does the prospect (and cost) of moving now, and maybe again in a few years, and being limited in making an apartment a home. Three years from now, real estate markets may be higher, lower or indifferent. So too may interest rate markets. And, if you hold on to your money, invest it in the stock market, there may be 20-30 percent less in three years as well. This is not the simple mathematic equation that many of you are making it out to be. If it is, it is more like calculus than arithmetic, and a lot of variables have been left out of this equation.

You call bullshit on me for what- for trying to buy an apartment?

Sorry Lobster!
That was my experience when the market was on the upswing: no time to think. It saved me from deals that wouldn't have turned out so well. In the end, when I saw "the" place I knew it's value instantly and was ready to act without hesitation or regrets.
Ignore west67 and the perma bears. 30-years' math skills are much better.

I didn't lose my virginity in the Midwest. I am spking of NYC re.

I prefer temp-bear or appropriate-bear. But mostly, I lik being correct on large leveraged financial decisions when a bubbl pops. But call me crazy but not Shirley.

Congrats maly on perfecting your broker-speak!!! How many years did it take to learn that language, but more importantly how long did it take to lose your soul to make money by selling shit you know can ruin a person's financial future?

Let me guess you never said no to a buyer in 2000 to 2007. Have you ever said, in your situation you should rent? Mal = bad in lots of languages.

Oh like maly said if you hesitate or you woudve regretted it then you shouldn't have bought. You hesitated so you lost, sage advice from q borker.

Thanks maly. It was a big disappointment. I really liked the apartment, but I can't afford to match the other offer. We'll just wait a little longer. Thanks again.

ok lobster: tell us which property you just lost.

lobster - the one thing I will caution you is from "learning" from this experince - it's what got a lot of people in trouble during this boom cycle. They "learned" that unless they dive headlong into deals without thing about them - whether is be on the financial end or if the place is really someplace they can see themselves living long term. So they learned that if they didn't jump in headfirst without looking they would "lose" and "be priced out forever". be very wary of the emotional aspect of "(doing X) on the rebound" - this comes from marriage to a person or a piece of RE. If it's going out and splurging on a pair of Jimmy hoo's, it's one thing, but if we're talking (well, at least I AM) about deals making sense AS LONG AS YOU ARE MAKING A LONG TERM COMMITMENT, make sure that you remain in that head. Don't go buying the next sweet young thing that comes along lifting her skirt (or showing his pecks and six pack abs). make sure you are really in love before making that commitment.

Way down in deepest darkest Africa, there lived a monkey and his best friend elephant. They did nearly everything together. One day Elephant was walking through the jungle to friend monkey's house when he fell into a pool of quicksand."Oh no! " thinks Elephant. "If I don't get out of here soon I'll drown!!" "Help me! Help me! I've fallen into a pool of quicksand and I can't get out!", he trumpets. Monkey hears his friend Elephant calling and swings through the trees to see what is going on. He gets to the pool of quicksand and sees his friend Elephant nearly totally under the quicksand. "Don't worry friend Elephant I'll get you out!" So Monkey thinks for a minute and then races through the jungle back to his house to get his Porsche 997 out of the jungle. Monkey screams back to the quicksand in his Porsche 997, ties a rope to the tow bar and tosses the other end to Elephant. "Here, friend Elephant! Hold onto the rope and I'll pull you out." "Brrmm. Brrmm" Monkey revs up the engine and finally pulls his friend Elephant out of the quicksand. "Oh thank you. Thank you friend Monkey. You've saved my life. I'm indebted to you for ever!!" "That's O.K. friend Elephant. What are friends for?"

For a few weeks, everything was going along just fine. Elephant was happily wandering through the jungle. Monkey was happily swinging through the trees. One day Monkey was swinging through the trees as usual until his hand missed the vine and he fell into the same pool of quicksand. "Oh no! I've fallen into a pool of quicksand and I can't get out! Help me. Help me! If I don't get out I'll drown!" Because of Elephant's huge ears, he hears the call for help straight away and starts crashing through the jungle to find his friend Monkey. Elephant finally finds his friend Monkey and says: "Don't worry friend Monkey. I'll save you!!" Elephant stops to think how he can get his friend Monkey out of the quicksand. He thinks, "Well I'm too big to get into his Porsche 997 so I'll have to think of something else!"

All of a sudden he comes up with this great idea! "I know what I'll do!" While Elephant was standing on the side of the quicksand pool he created this huge hard on. He grunts and groans until it is as big as he can get it. "Here friend Monkey, grab hold of this and I'll pull you out of the quicksand!" So Monkey grabs hold of Elephant's penis. Elephant backs up and backs up until Monkey is clear of the quicksand. "Oh thank you, thank you, friend Elephant!! You saved my life! I'm indebted to you forever!" "That's O.K.friend Monkey. What are friends for?"

THE MORAL OF THE STORY?

If you own a Classic 7 on West End Avnue, you don't need a Porsche 997!!

CC. Great idea. Lobster tell me the unit. What a fucking set up.

I got one too 30 yrs. Monkey buys NYC re in 12/2007. In 2009 loses job, loses wife, loses home then commits suicide.

Moral of the story- don't buy into a NYC re bubble.

Columbiacounty, I am not a broker. I am a librarian. My husband found this website and I started reading the posts to try to educate myself about real estate, After living in NYC for 17 years, I am still surprised at how cynical some people can be. I have learned alot by reading the various SE threads, but I have learned that if you are a sensitive person such as msyelf then perhaps it's best not to participate in the discussions and just read what others write. I'm sorry that you and 67th street think that I am trying to fool you. I'm not.

AS COMPARED to WHAT? Renting, which is the only thing which matters, unless you want to live in teh house of satrock certificates you've build on West 67th and RSB.

Diamonds , GOLD, being a B-List "star".... that's TRUE of EVERY ASSET at some point, no?"
You mean like stock in Trolley car companies? (urban legend or not)

"Since we haven't written the last page of history we won't know for awhile... and even after history ends it takes statisticians 10 yrs to decide when it ended. Gotta go."

you are right - your assumptions that things will occur which have NEVER occurred historically should be taken with much more weight than my assumptions based on things which have happened OVER AND OVER AND OVER again historically. How silly of me.

hey..do you have kids?

Flmao. Librarians live in Queens nit NYC!!!! One other thing, does a NYS budget crisis mean anything to YOU lobster?

"Let me guess you never said no to a buyer in 2000 to 2007. Have you ever said, in your situation you should rent? Mal = bad in lots of languages."

a) I advised not pulling the trigger on more deals than pulling the trigger during that time period. Unfortunately, the insane market made an ass out of me for doing it (but under the same circumstances, I'd probably end up making mostly the same suggestions over again.
b)But if you really want to get on someone's case for such a thing, How about the number of "buy" recommendations on NASDAQ stocks during the period it fell from 4500 to 1200? I seem to remember hearing that during that period (?November 1999 thru September 2002?) that out of something like 5,000 recommendations by various investment houses, something like 4,950 were "buy" and something like 50 were "sell".

I think we all know the Monkey bought the 997.

lobster - that stinks. hope you find what you're looking for.

lobster, sorry to hear. will still keep an eye out for condos that seem reasonably priced.

30yrs, the nasdaq? just because there were greater fools...

and you intentionally ignored the second part of my last post. don't think i didn't notice. see you tomorrow night?

so...if you lost it...what is the problem with posting it?

I am not a broker, 30-years is a broker. He makes more sense than you, which is why I agreed with him. You completely missed the part of my post where someone can be justified to buy today as opposed to 3 years from now EVEN IF PRICES GO DOWN another 30% ( which let's face it is only one scenario, not a certainty.)
Let's say I could buy an apartment today for a million, and I have $300,000 to put down. Today I can get 5% on a 30 year fixed. In 3 years, I'll have $330,000, the same apartment only costs $700,000 but interest rates are 7.5%. I spent $110,000 in rent in these 3 years. How much am I saving, now that rates are 50% higher? Come on trust fund baby, work those neurons.

lobster, 30yrs' advice is spot on. I would advise against posting what property it is just yet - you never know what'll happen before it closes. I don't know what possesses people to throw a fit and shout "broker" at anyone who even suggests that buying might be a good idea for someone, but it's really a disservice to anything that's otherwise intelligent that you may be posting. Paranoia is a bitch.

that's pretty easy...if you buy today and need to sell in three years---

saved $110 K in rent
lost $30 K in interest
lost $300 K in principal

you're down $220 K or $6,100 a month during the term.

With math that easy only my nut sacks need in involved in the calculations.

Serioulsy, maly do you think librarian on what $50k salary should be buying a $1.2mm coop? What if her husbad is caught banging the mail room boy next year? Or heaven forbid they get a Divorce (ya know 50% of ALL marriages end in divorce). So should a librarian be buying in NYC re right NOW maly?

maly, bad math. rates may be 50% higher but your mortgage costs certainly won't be.

the math is far more complex than that. as is the investment/ownership decision. we've been so brainwashed to skew thoughts toward ownership that very few people view the risks. there are risks, and they matter. to say they aren't quantifiable is possibly correct, but neither is the utility of "owning" your own space. many renters make renovations.

30yrs you're definitely no better than the bears when you try to spread fear about renting. of course there are risks to renting, but they are far less than the risks to buying. if my landlord goes tits up (which will happen), the worst thing is i find a similar lease. i don't have to worry about selling. i'm pretty certain i didn't miss out on any appreciation in the last 5 years.

and i'm in no way a perma-bear. 5 years does not a perma-bear make. but it's silly to just label. what, i ask myself, will bring me to the bull perspective? i confess right now i can't see it, but i don't know whether that reflects poorly on my analytical abilities.

One other thing there was a time in 1989 when I actually knew librarians living in NYC, then ya know what happened yep the bubble and now id say 1/5 of all residents in NYC is somehow tied to this bubble.

Maybe we'll get some cool tranny culture to move back to NYC, what'd think 30yrs. Wouldn't that be so cool.

Oh one last thing 30 yrs. Did ya think you thoughts might be a little just a smidgen tainted by having a re broker across from your desk every day? And finally, I'm prettty much retired on my prescient NYC re commercial/residential purchases in 1990's when it made sense, I can work or not work (up to me), do you work for enjoyment or would your lifestyle be altered in you stopped working? Social scurity chks gets you only so far in NYC.

Funny story, I worked at a super mkt in NYC in 1980's. I always felt bad when I caught an older person sneaking cans of sardines in their purse. Those things are like $5 a pop even back then, the 'good' ole days are coming BACK!!!!

As I said earlier (and most reasonable people pointed out) it's not a good idea to buy if your time horizon is 3 years. The transaction costs alone would most likely hurt you even in a post-recession market. I personally don't believe another 30% is very likely across the market. It might happen in the parts of the market that bubbled the most, but for what Lobster is looking for, it is pretty unlikely.

67th street, not that it's your business, but my husband is a partner in a law firm and is the primary wage earner in our family whch is how we can afford to live in NYC. Thanks bjw2103 for your post.

you pulling my chain. r u mocking aboutready?

Wow. Grow up w67. I don't know, and don't care or assume one way or the other, whether lobster is male or female, or where his or her financial resources come from, or the stability or inclinations of his or her spouse. And, to your great math skills, no one suggested in the equation that the apartment would be sold in year 3. Run those numbers out to year 6, 10 or 20 and see how your analysis stands up. And, put in some discount to account for your apparent 100% belief that prices are going in only one direction. It is not hard to run a bunch of numbers that assume the market will tank over the next three years to say that from a purely financial perspective precisely at the end of year three that you will be worse off if you buy today rather than sign an apparently three year fixed price lease today. I too am quite confident if I assume the market will be down 30% in three years, that the market will be down 30% in three years.

30yrs.... any monkey can buy a 997... this MONKEY bought a 997 Turbo with all the bells and whistles... come in closely, I got a funny story to tell ya...

I had some issues with the title initially and somehow ended up with the original owner's credit application. The $135k porsche turbo was bought by a contractor in Las Vegas in 2007, 2 yrs later the car ended up in auction with 9K miles and found it's way to a dealer in southern cali. I got a 3 yr porsche extended warranty, a business lease thru Porshce (all in $1300/month), for $81.5K... now that's change I can believe in! My after tax cost is $650/month for a car of my dreams... so YES I am emotional, but NOT stupid EMOTIONAL.

A RE contractor... gotta be plenty of those guys in Las Vegas... i wonder if his wife is a stripper? Funny, but I've met several "ppl" in Las Vegas where hi.... my girlfriend/wife... is a stripper is standard fare... almost like hi... I'm a banker is in NYC.

just re-read only lobsters comments. would have to agree with you. this is bullshit.

Lobster--

Do NOT post the property info. Nothing's over til the fat lady sings, and it sounds like she's only just warming up.

A lot can happen during the contract phase--until there's ink on paper either party can walk and the deal can tank. It does sound like you got yanked around here--likely the seller was using your bid to fuel a higher offer from another buyer. It's also possible the seller is playing a game of chicken and using the threat of a higher bid in hopes you cave and up your own offer.

I'd wait and see how this plays out. Remember, when buying RE a willingness to walk is the strongest position.

not too sporting.... put whatever TERMINAL VALUE ya wants.... when the tea leaves say prob down 99.99% up .0001% next year...

very sweet and sensitive till you called her a broker...then....kaboom.

Thanks Squid. I have no intention of posting any specific information on which apartments I like or don't like. I'm not very optimistic about this apartment, but I will check the building's listings to see if anything else goes on the market.

Lobster: don't take the neg. comments to heart. People obviously feel strongly about their points of view on SE - heck, bull or bear, they've wagered hundreds of thousands of $ on being right or wrong. Only you can know all the specifics of your situation. Probably just as well you lost out, didn't sound like the property of your dreams.

W67, your math, reading, analytical and comprehension skills are very poor. The only inflation here is your incessant and infernal bragging. I usually don't mind egomaniacs that much, but you seem to have a need to put others down, so it makes you a rather unpleasant jerk.

670 verbal 640 math. Yep that's me an egomaniac on an anonymous re board. And let me guess you would be the Chase signature loan officer!

I'm doing a great service on SE, I am taking my years of education, experiences in NYC re and excellent analytical skills and saying the greatest NYC re bubble popped one year ago, and we are NOwhere near bottom. What's your angle maly, hmmmmmmm RE is an emotional decision so e everyone should just buy buy buy? I'd agree with you if I could pay for NYC re with my emotions!!!!!!

"the seller reached a contract with another buyer whose offer was "significantly higher" than ours. So who's the idiot here."

@ lobster - Thank your lucky stars. You might have just won a lottery by escaping the financial landmine of overpaying for a rapidly depreciating asset. If the deal with the second buyer falls through and the seller comes back to you, laugh in the seller's face and offer less.

@ 30 years and others who suggest only monthly mortgage payment matters, not the asset price - I don't get it. Isn't "buy low" much better than "buy high", for the same asset? When "monthly payment" is the same, isn't it much better to pay LESS for an asset at higher interest rates, then to pay MORE for the same asset at lower interest rates?

You can refinance a lower priced asset bought at higher interest rates when the rates come down. But if you bought at higher price with low rates, you're priced in forever. And if you overpaid when interest rates were low, and then the rates shoot up, you're screwed. Kind of like buying a bond at the top of the market then seeing it tank when interest rates rise...

And yes there is no inflation here. The opposite of inflation is deflation. Let me put it in a way you, maly can understand. It's when lobster buys a $1.2mm coop today and in one year the same line unit 5 floors above starts at a listing of $900k. Is that mathical, languigical and analytigical enough for you maly, or should I throw in some emotions into it to make it REAL.

Nothing gets realer than a foreclosure notice. Ya should ask all the millions in foreclosure proceedings if w67 makes sense?

"a business lease thru Porshce (all in $1300/month), for $81.5K... now that's change I can believe in! My after tax cost is $650/month for a car of my dreams."

Add "tax cheat" to w67th's profile...common, but most people don't brag about it though.

lobster- I'm a little late to this thread. There's a lot of brilliance on this board but for every comment you post, you're most likely going to be ignored or attacked.

I don't know if you know for sure that there is another buyer with a higher offer, but there is a good chance that there is not. When we were initially trying to buy an apartment earlier in the year, the sponsor told us that someone else was interested who had much more money, however he was being nice and giving us first dibs. What a crock of shit. My boss also is trying to buy a FSBO and was told there was a higher bid. Turns out that it wasn't really true either.

We're in contract now, but I am no longer worried about the purchase, just on edge until we actually close for one reason or another. WE plan on staying in nyc forever if possible, and this place is large enough for us to stay for quite some time. If we were banking on making a profit in 5 yrs I would be a lot more worried. I have some friends who just bought and got a 5/1 ARM, and the plan to refinance or sell in 5 years. I do not think that is a good idea at all but they didn't ask my advice.

Right now we live in a dumpy prewar walkup surrounded by college students. It sucks, and it will be awesome to have our own place and be able to take charge. We'll have the W/D and the D/W and the lordy lordy, the ability to control our own heat!

Still I am a worrier, so I made sure that I read every document for myself, and didn't just trust the brokers or lawyer. I asked a lot of questions to the annoyance of many, had an inspection done, and have been in constant contact with the brokers, lawyer, and mortgage people. All of that has required considerable effort but it has been worth it for the peace of mind its provided.

And yes, we're also taking advantage of the lemming tax credit and the low interest rates.

Anyways, good luck and maybe the seller will come crawling back. if you have the time and the money you should be able to find something with 95% of what you're looking for. We probably looked at nearly 40 apts over 4 months but that was because this is our first purchase and we didn't really know what we were looking for.

Well, at least you are consistent. Brag, insult, brag some more, insult more. All the while proving that my initial assessment was entirely too generous. Try reading this thread again, make a valid point and we can discuss that. Good luck.

aboutready
"5 years does not a perma-bear make."

Is that English? Or abovereadybonics? Or toilet talk?

So not ONLY are we now 100% sure prices are coming down by at least 30%, but we are ALSO 100% sure that after interest rates go up (which they surely will) that they will come down a significant amount so the loan can be refi'ed and save a ton of money? It's great you guys can just make up any scenario you need to suit your scenario regardless of an historical precedent or rational model.

And you guys think when John Maynard Keynes said "in the long run we're all dead he was neither joking now talking about a period greater than 30 years? If so you're bigger morons than you appear to be from the drivel in this thread.

And w67 it's too bad you can neither afford insurance nor parking for your Porsche. Perhaps if you were better at investing your money it wouldn't be rusting out on the street (or is it in some garage out in the Midwest somewhere? Perhaps still in LV/CA because you couldn't afford to ship it here?))

"@ 30 years and others who suggest only monthly mortgage payment matters, not the asset price - I don't get it. Isn't "buy low" much better than "buy high", for the same asset? When "monthly payment" is the same, isn't it much better to pay LESS for an asset at higher interest rates, then to pay MORE for the same asset at lower interest rates?"

I might bother responding if you indicated you actually read and understood what i was posting, rather than just knee-jerk denying based on some point which has ZERO to do with what I was saying. So I'll ignore you from now on too... it's a deal.

"30yrs you're definitely no better than the bears when you try to spread fear about renting. of course there are risks to renting, but they are far less than the risks to buying. if my landlord goes tits up (which will happen), the worst thing is i find a similar lease."

Wow, you must be truly fortunate to be immune from the entire market rising. Is there something I can take for that?

fear mongering is the only word for spreading a rumor that rents will be rising appreciably in the near term. i can think of no other phrase for it. i'm not 300% sure of anything. but i think if you were to be honest you wouldn't come up with a scenario for sustainable rising rents OR purchase prices in the medium term. it is very unlikely that rates will rise appreciably before the mid-term elections. fear of regulation and impending rate hikes may tank the stock market, or may not.

so, again, where's the fire? inventory is still elevated but generally crappy at the prices, still way out of line with rental costs which are declining, job losses in this area are still at less than half than predicted, hiring is anemic, there are a number of developments on life support, severance is running out for the early lay-offs, so WHERE IS THE FUCKING FIRE?

do you guys/gals really feel nyc apts can fall another 20 to 40%? Im not feeling it but then again....its just my gut and im no expert

30 yrs I don't know how you got the impression that I was calling for the Great Depression in the next few years because that certainly was not my intention or belief. I actually believe that economy is beginning to right itself for right now.

My Point: This last year produced a One-Off Economic Seismic Event. All previous risk/benefit constructs should be off the table and no one can rely on past history to determine the benefits of long term ownership. For the first time ever, our economy seems to be reforming with a benign socialist bent. That does not seem to scream huge upside for investors. Read Dodd's regulation requests -- there will be repercussions to our little "petit crash" for decades. The govt wants "skin in the game".

The fact that I think the economy is going to be fine in the next few years does not alter my thinking that NY RE has another leg down. Lefrak is lobbying congress to give out green cards with apt purchases. William Mack is lobbying congress to change investment rules for foreigners to buy commercial real estate. He says that commercial RE cannot re-equitize the 700 BILLION that is coming due. That implies that the people at the top-- the people in control of the inventory-- believe US supply cannot be absorbed by the groups that sustained RE in the past. ie. the US population and investment funds.

The rest of the country has come to terms with RE costs vs. income. NYC has not for many reasons elaborated here. Plus even if the economy is fine in the near term, I would not rule out a major backlash in the coming years against the changes that are being instituted now.

I'm not sure what the future holds for the U.S. - that's why I'm keeping our options open. There are so many challenges ahead - how to get out of the Iraq/Afgha. situation, HC reform, demographic realities, the rise of gov't corruption. Too complex & big to govern.

I'll throw a question out for everyone - what is keeping you in the U.S.?

Modern: I am a liberal. Because I knew Obama would win (along with my vote), I made sure I took advantage of the current capital gains taxes before they changed under the new administration. I sold all my property. The tax burden was very small. But it was legal and I would have been a fool not to take advantage of it. So cast my lot with W67 -- he has every right to play the tax laws to his legal advantage just as every person of wealth does in this country. Until hedge fundies stop declaring their huge profits as capital gains rather than taxable income, no one has fair advantage. All the more reason to help the disadvantaged who cannot compete on a level playing field with the wealthy.

apt23,

What you did was entirely legal and ethical. What w67th is doing is illegal. There is a difference.

It is not legal to deduct 100% of the cost of a car for business use, only the portion used for business. I suspect w67th uses it 10% or less for business and the rest for personal use. I doubt he is going to Home Depot to get new sinks for a building he owns in a Porsche.

Can he get away with it? Sure, unless he is audited, where he will lose, but the IRS only audits a few percent of tax returns.

BTW, I have been accelerating income, like you, for several years, thinking we were at lifetime lows in tax rates. We will never see rates this low again.

I've read enough Tax Court decisions to err on the side of extreme prudence in tax returns. Agree with lifetime lows in tax rates (another reason to defer U.S. citizenship).

Lobster, I believe you, first of all. 20 years in journalism imparted a decent bullshit meter.

"Buyer's remorse" is extremely common and has been the subject of scholarly research. You'd be an unusual person if you didn't feel it, and you get kudos for being so self-aware. It's completely normal and natural with such a big commitment.

It's a little like stage fright too. You never get over it, but the difference between experienced people and, say, amateurs is that the stage fright goes away far more quickly for the experienced performer. People also learn strategies for handling these less than pleasant emotions--everything from meditation and good luck charms and visualization to prescription and/or street drugs.

I am not recommending the drugs.

For buyer's remorse management, get out a big sheet of paper and start writing down salient facts: pros and cons about buying in general, about this apartment in particular, long-term financial outcomes under various scenarios of buy v. rent, whatever motivated you in the first place.

What are worse-case scenarios? How likely are they, really? How do you know?

WRITING IT DOWN is important. Don't skip this step.

What you're feeling is not ultimately about numbers. It's about a sense of security in your life, about basic survival, about self-hood and early attachment to care providers. It's actually very deep stuff and it deserves respect and your loving attention.

Very best of luck to you, and I hope you find an even better apartment--which I think is actually quite likely!

{Manhattan real estate agent.}

ugh... are you for real Fluter? This is a joke, right?

Wow, 30yrs, no need to get defensive. I didn't mean to single you out. I just really disagree with the argument that looks at monthly payment instead of the asset price.

"tell me how terrible it was that she bought now instead of 3 years from now?"

In the proposed scenario, she overpaid by $300,000 and lost additional $50,000 by paying mortgage vs. rent for 3 years (since monthly rents would be $1,500 lower than buying similar apartment). She also lost the flexibility of moving if needed (since she's underwater and can't sell), plus no future refinancing & lowering her monthly expenses is possible since she locked in high price @ low rates. It's a disaster, no?

Recently our doggie w67th has been relatively well behaved, but he's back to grave dancing with his promotion of suicide and destruction of families, and even managed to throw in a bit of Porsche bragging, words ending in 'z', gratuitous sexual references, and while in the past he admitted to cheating one of his landlords, apparently he's now admitted to some tax cheating:

- BUT F I got to paint my wallz rainbow unicorns!

- beginnings of the disintegration of "families", breaking up of communities

- But call me crazy but not Shirley.

- I got one too 30 yrs. Monkey buys NYC re in 12/2007. In 2009 loses job, loses wife, loses home then commits suicide.

- My after tax cost is $650/month for a car of my dreams... so YES I am emotional, but NOT stupid EMOTIONAL.

- A RE contractor... gotta be plenty of those guys in Las Vegas... i wonder if his wife is a stripper? Funny, but I've met several "ppl" in Las Vegas where hi.... my girlfriend/wife... is a stripper is standard fare... almost like hi... I'm a banker is in NYC.

My favorite though is where doggie tries to brag and here's what he thinks is impressive:
"670 verbal 640 math."

Seriously, 640 in Math on your SATs in the late 80s/early 90s scoring regime?
That poor scoring you can't blame on being foreign born.

The 670 in Verbal is not so bad. Unfortunatelyz downhillz sinze thenz.

"Here a question, if Jenna Jameson buys vaginal cream cause she's got a yeastie? is it work related or personal use, and let's say for argument sake she got it 30% from husband and 70% from doing movies? Should we have a forensic vaginacologist to determine the source of yeast? I'd love to be in that IRS audit.

30yrs.. I've got 4 words for you. "CAT FOOD""

"Donald made billions, Macklowes made billions, Kushners made billions and my dad (let's call him daddy monkey) is 10x richer than I and hasn't had to work in 15 yrs (me just 7yrs). "

Yes, lets call your father daddy monkey, and you, doggie.

So again with the bragging. Smarter than everyone.

So we've covered the Porsche today, lets move on to the yacht. And don't forget to give your wife the doctor her due.

Tell us again how you were a TA in business school.

Lobster,

I'm so sorry for your disappointment. I remember every property I've ever lost too -- especially the estate condition Junior-4 in Stewart House where I walked in nine years ago, bid on the spot, and was crowded out by an all-cash deal at $275K. Nearly a decade later, I still remember that apartment.

But you know what? I love the apartment I own now. A lot.

Gil Neary, who is now my boss, but was my broker when I bought my first apartment in 1996, says, "there's always another apartment." And he's right. You and your better half will find other places that you love, too. Keep your chin up.

Ps to West67th street: 30_years really is smarter than thou, it isn't just a persona. I think he's smarter than me and I say that about very few people. And maybe he likes to come in to his desk from time to time to talk to me. I'm pretty enchanting.

ali r.
{downtown broker}

nopigsorshrimp - you really have to stop this whole thing with W67th -

He has bigger problems right now, like making sure his wife still wants him as a stay-at-home dad - after all, with all that insurance, he's worth a LOT more dead than alive.

I wanted to thank everyone for their kind remarks and comments. Losing an apartment is certainly not close to the worst thing that has ever happened to me. Mmarquez110, I really appreciated your comments. I've read many of your other posts and you have alot to contribute to this board. The same applies to front porch, fluter and many others here. I'll be happy to contribute to any discussion which involves buying real estate if I feel that I have anything worthwhile to add. Thanks again to everyone.

lobster, I can't tell you how many great apartments I lost out on, but like front_porch, I still found a great one that is now my own. Patience in real estate is perhaps even more demanding than patience in other life decisions. Good luck! And do let us know how your search progresses.

I didn't realize this board was so intense. RE is a very passionate subject, but wouldn't we all benefit if we shared viewpoints from the logical rather than emotional side?

Its always going to be tough to completely remove emotion from the debate about one's home, and usually their biggest purchase...

Lobster: Years ago, I bid on an apt I loved. The broker told me that they didn't accept the bid because the sellers decided to take it off the market. For weeks I searched for another, but nothing compared to that one that I loved. One day, I went back to the apt I loved and knocked on the door, intending to tell them that if they ever decided to sell, to please call me. Turns out, they didn't take it off the market but had fired the broker. I bought the apt. and was very happy for years. A broker couldn't get away with that story now in the age of the internet but it taught me a valuable lesson in RE. I'm sure you will find a new place to love. Or, perhaps, as in my case, that same apt will come back on the market. As bizarre as this thread is, there is real info here to help direct your new search. The next time you make an offer I am willing to speculate that your feet won't be so cold. So, alls well that ends well.

Apt23, enjoyed reading the story of your apartment search and yes, this particular SE thread has been both helpful and bizarre.

W67: usually if one spouse defers to the other based on the other's income, it doesn't make for a very happy marriage.

Nyc10023. Absolutely agreed. You can go the who can withhold sex longer if that floats your boat ;)

Nah, that's a horrible way to do it. The best marriages w.r.t. money are those where the one who wants to handle the $, handles the $. As for the other, men and women have evolved to want different things out of it.

Lobster -- feel free to email at jkepstein @ gmail.com -- seems like we are looking in the same area - im about to sign a K - happy to exchange ideas/thoughts -