Your new condo sucks!

it depends on the friend. if the friend can take the $ hit of the down payment on contract, i would get data together and show them what a mistake they're making. on the other hand, some people can't see a lemon until it's squeezed into their eyes. with those, just keep quiet if you want to remain friends.

Remember, if they wanted to know what you think, they'd have asked you. Repeat like a mantra, and if you manage to sit on yourcomment, it will save you from an even worse faux-pas down the line, the dreaded I told you so.

fakely? give hooked on phonics a try....

My friend is typically pretty resiliant, but also very private - hence not knowing about her big purchase until after the fact. She lived in a tiny ~$1,500/month studio for 5-6 years despite having a very lucrative job & family $$, and now in her early 30's has decided to buy a <1,200 sqft $1m condo in a neighborhood she describes as 'the projects'....She recently had a very traumatic family event, so may not be thinking rationally.

Sorry, lost half my sentence. Was saying: "has decided to buy a $1m 1,200 sqft condo in a neighborhood she describes as 'the projects'"

The fact that she is buying in an area she refers to as "the projects" surely means something. But I'm not really sure what...

"family $$"

then i wouldn't do it. i did it in a case (and thanks god it worked out great for them). but the family $ was not there in their case, so they needed to get it right. she doesn't have that need and can have the luxury to overpay. congratulate her then.

about "if they wanted to know what you think, they'd have asked you" telling you about the contract is not asking directly, but it makes it fair to comment on pricing issues imho. the worse possible situation if for you not to say anything and in 3 months from now forget about this and laugh about dumb people that bought with bad timing in front of her.

"The fact that she is buying in an area she refers to as "the projects" surely means something. But I'm not really sure what..."
If the building is Loft 25, I would do it.

Congratulate her and not fakely,and bring up particularly if this is a home she wants to spend at least 5 years in. Then I would bring up if her thoughts were more towards as an investment, as her friend you have to tell her it is a poor choice of place and time. Let her ask or then not ask for you to elaborate further. Be prepared with data.

Thanks for the constructive input [except for Cpalms]; I'm going to run it by another close friend of both of ours to figure out whether or not it's a done deal. If so, then I'll bite my tongue, by a house-warming gift (maybe a bullet proof vest), and wish her the best. Wish I had known 2 weeks ago!

um... how about telling them not to do it? you are close friends??

What area of prime Manhattan has the least number of "projects"? the UES. While the best buildings of the UES are among the most expensive in the city, it also has among the cheapest housing of all of prime Manhattan. I say forget the issue of adjacency to "projects" and look at other location issues. What is the direction of retail? How is the convenience of transportation? Look at trains, busses, cabs, access to parking. Even if she doesn't have a car whomever she sells to may. Is she within walking distance to a park? How are the restaurants? Do many deliver to her building? What are the crime statistics like? How about access to bars or clubs? Is the apartment quiet? Does it get good light? How are the views? Are the public schools good, okay or a disaster? Just because disadvantaged people live nearby is no reason to ignore an area or an apartment's merits.

underwhelmed - could you give more info on the location? IMO, located "in the projects" really doesn't mean anything. There are many projects in desirable areas of the city.

Seems like at this point you're not going to convince her otherwise, so you should just get on board, unless this is looking to be an utter and complete disaster. Especially so, since she has family $$

Let's just call it chelsea west of 9th ave, as I don't want to name or confirm which bldg (but it's pretty obvious). Public housing is directly across the street I believe. Also, the monthlies are abnormally high (well above $2/sqft), so while the apartment design/space and full-service building seem decent (I haven't been inside) - there are major fundamental issues with location, resale value and/or rental property economics in my opinion.
If there wasn't a deposit involved already I'd definitely voice my concern. At this point there is no positive resolution - lose deposit or move in regretting the biggest purchase you've ever made instead of celebrating the milestone? I'm going to leave it alone and hope for the best.

For a recent large building, the Caledonia doesn't have that many apartments on the market for sale or for rent. That is a decent indicator of demand, as is the high rental rates in the building. Plus Related is a very good developer and they've retained a substantial interest in the building. Your friend could have chosen a lot worse.

Say nothing. Have an unspoken thought.

Ahh, and now I know exactly where you're talking about. My friend just bought down the street. I actually think the location is fine despite the projects across the street -- convenient to subways, grocery stores, good restaurants. The price seems in line with other new construction, but you're right, the monthlies are way too high. Maybe ask your friend if she knows why they are so high? That might give you an idea of how much thought she's put into this and what her motivation for buying is. Unfortunately high monthlies only get higher with time -- so no matter how long she lives there, it still might not be a good investment.

Someone I know is paying cash for a condo in Tribeca, and I'm doing everything I can to not tell them how wrong I think it is. It's not everything they have, but when you want something, you want something. I give my clients my viewpoint all day why I think now's a bad time to buy real estate, but that all it is. A viewpoint. If they're happy and they aren't stretching themselves, then fuck it. Do it.

isnt he saying 833psf$...for a new condo...This can't be Caledonia ..or there are mega losses for existing owners. What could it be at that price in manhattan

Family $$ is supposed to be pissed away by the next generation, so who the hell are you to try to stop such a force of nature.

On a more serious note, if I had a dime for every person I knew who made a bad financial decision, I'd have several dollars by now. The thing you have to realize is the people very regularly come to very different conclusions given the same set of facts. Moreover, the "rational" choice does not necessarily lead to the positive outcome. Suppose it's Jan 1999, and your friend tells you they've taken out all the money they can to put it into NASDAQ. Kinda stupid, no? But they would've made out like a bandit, at least for some time. Worse, if they had listened to you, they would given up all that money because of your stupid meddling.

Your friend asks you for financial advice, or asks you what you think about the financial outlook of the purchase, you tell it like it is. Otherwise, you keep it to yourself.

This sounds like a situation where you could receive none of the credit and all of the blame. If your friend decides to back out of the deal I would imagine they would do it based on a few factors and not solely on your advice(opinion of market direction). Therefore if they back out and the market continues to tank you may receive some thanks. If however the other scenario plays out(and yes i know this is given a snowballs chance in hell in this forum) and the market appreciates, ut oh. Your friend will forever remember your "advice".

underwhelmed
I repeat;
"If the building is Loft 25, I would do it."
And if it is the unit that is listed in contract it is facing North.(the projects)
I've been there, it is without a doubt the worst block Ive encountered any new construction on.

And a post of mine some time ago on another thread;

truthskr10
about 3 months ago
ignore this person
there is another small thread on this building
http://www.streeteasy.com/nyc/talk/discussion/14831-building-at-245-tenth-avenue

Last word I had on it was a January completion.
But never was there a location where 2 blocks are all the difference in the world. North of 23rd street (this is on 24th) is awful over here. The noise and club traffic (street and sidewalk) is terrible at night.
Not to mention the projects which as the economy remains or gets worse will continue to make this a scary area.

It is has the honor though of being second worst location to Loft 25.
http://www.streeteasy.com/nyc/building/420-west-25th-street-new_york

have to agree. loft 25 is lose lose. those monthlies are insane and only going to get worse. you probably have to speak up.

Loft 25? Another RAL conversion? He always overprices. Look what he's been doing at One Brooklyn Bridge Park. You can't tell those people anything, over there. They get very defensive. Maybe I would be too, if I had bought in a building that came in over-budget,in a location that has nothing more than a nice view. There's part of a park open now, but you don't have to live there; it's a public park.
Don't drink the RAL Kool-Aid.

In Jan. 2008, RAL had a R.E. agent contact me. He wanted me to buy one of those over-priced one-bedrooms. But, where's the retail? No market, yet. It's coming soon, he promised. I told RAL that the building was WAY overpriced, and that he should lower prices. He told me that he couldn't do that. The broker insisted that the building was selling out. Those one-bedrooms would be gone, within a couple of months.

Feb.2010: No retail, units still available; with price-chops. It's still over-priced.

Another RAL rant, Truth? Wow, what a surprise! This perverse obsession with RAL is borne out of your desire to save the masses from RAL? Right, no agenda at all. You're surprised that there's no retail yet given the state of the economy and that the Park is not yet open? A broker told you that the building was selling out? Another shock. OBBP has dropped its prices significantly but you still whine about the RAL Kool-aid. We get it...you don't like or trust RAL. Your point has been made; move on.

I've looked online at Loft 25, I've tried to understand what you're saying, I know the projects of which you speak, but I just don't get it. In the Grand Pantheon of poor financial decisions, I don't even see how this is an honorable mention.

It's $800 per sq ft for new construction in a sub-prime Manhattan location. There are a handful of others who're paying the same price currently, and dozens who paid even more a couple of years ago. The price-to-rent is no more out of whack than anything else in the city. I'm not saying it's a particularly good thing to be buying, but just not obviously worse than thousands of other choices in the city.

If not $800 per sq ft, what is the right price for these condos relative to the rest of the market?

How about facing a bridge for $800 per sq ft:

http://streeteasy.com/nyc/building/the-river-ridge-condominiums

How about $2000 per sq ft to be at 45th and 6th:

http://streeteasy.com/nyc/building/cassa-ny

the projects are way less of a problem that the total scene that block is all weekend long because of club traffic