Manhattan Prices Going Up....

Not necessarily. Manhattan is not really a "Troubled Market." Most of the effected real estate markets are in FL and CA primarily. Not to say the NYC is immune I just think it will take a bit more time for the market to adjust.

I am in the market for a 2 bed/2 bath in midtown. While there is not much inventory, I don't feel prices are going up. Prices definitely went up approximately 10% in the spring. I have followed listings with high prices (in my opinion), and seen some of them drop after a couple of months.

Prices are not going to go down in Manhattan as long as so many people want to live here and there are so many renters sitting on the sidelines waiting for the slightest drop to jump in. And there is no comparable alternative product for that large demand to turn to: it's not just another town, where if prices are too high in Scarsdale a house hunter might say, let's try Ardsley (or Montclair, or Nyack, or Syosset, ad infinitum).

The only thing that's going down in Manhattan RE is the inventory. Not sure if that will drive up prices though but demand may exceed supply at the moment.

I have to respectfully disagree with the above assessments. While I'm certainly not in the 'little black arrows point down' or 'bid low bid low bid low' camp by a long shot, I was in Manhattan in the late eighties/early nineties and experienced the real estate correction first hand. In my mind, the issue isn't inventory or foreigners with $'s entering the market, or whatever. The issue is one of perception and how people FEEL about their real estate investment. If they feel that they understand the value of their real estate, and that the general consensus appears to be that others agree with them (more or less), the market will remain somewhat confident and stable. But if people suddenly begin to feel that they don't really understand the value of their real estate, confidence will drop - precipitously. That is what will eventually result in more panicked sellers, and more wary buyers creating downward pressure on the market.

As I said above, I saw this occur here firsthand once before, and you feel the real estate market is gonna be okay and reasonably stable (you hope)..... until it suddenly isn't anymore, but by then, it's moving under its own inertia and there's precious little you can do but ride it down and hold on for dear life.

I'm not suggesting that the next few years will be a repeat of what happened in the early nineties, but from my vantage point, I can only see the market going down a bit (0%-20%) over the next couple years. Whaich I might add, doesn't really bother me - we just bought a new terrific place, plan on living there for 10+, 15+, 20+ years or longer, and I can afford to watch the market go up and down as many times as it wants to - I don't consider my place part of my 'asset portfolio,' it's just the one and only place we wanted to live in all of NYC, so for us, it was a once-in-lifetime-thing. But if my financial situation were otherwise, I'd be mighty c-a-r-e-f-u-l about purchasing right now. Not to say that I wouldn't, but I'd want to be very thoughtful and as informed as possible.....

I do agree with the above post. I have seen as recently as today that the prices listed for the West Village, Greenwich Village and Tribeca are up from last year. Example a studio recently list at 299 West 12th street went on the market today for 799,000. This is a studio and last year they were going for about 725,000 in that building.Whether it sells for that amount remains to be seen but I wouldn't be surprised if it gets close the the asking. Now for the rest of city who knows but I am not as smart as most people here who can predict whether Manhattan property values go up or down over the next few years. I too am in it for the long run.

"The issue is one of perception and how people FEEL about their real estate investment."

Pseudonym, as you know, this is exactly what I've been harping about the past few weeks with respect to mainstream media headlines about the local market and economy.

Some unnamed people couldn't understand this and kept hollering about how my postings of some NY Post articles showed my lack of credibility, while missing the point of psychology altogether. Interestingly, the same unnamed people now 'agrees' with your post. ROTFLOL!

In any event, the local psychology and general mood appears to be shifting as evidenced subjectively by the mainstream media's (MSM) local coverage of the ongoing national housing bust. In other words, there is a greater chance for downside than upside.

We share a similar sentiment: For the Long Term buyer of 10-15+ years, the risk is low since over time, real estate does appreciate. I doubt what happened to Japan and its deflationary issues will happen here as we all know Bernanke's and the Fed's position with regards to deflation (greater of two evils).

BUT for people thinking about buying and staying in their new apt in Manhattan for less than 10 years, prudence MUST be exercised given the recent turmoil on Wall St. on how that affects psychology, local jobs, and local renumeration.

Also, I am obliged to mention that Feldstein's commentary at Jackson Hole where the Fed just met is a grave warning of what's to come.

If you put two and two together (understanding who Feldstein is and understanding what he is articulating), you will quickly realize that the situation is much worse that it appears to be.

It nice to know the Dow this year is up around 8%(not to shabby) and the labor market is still very strong, coupled with historically low interest rates, strong consumer spending, and a very healthy growth in the technology sector. What I also like is the healthy concern about the housing market sector for if everyone was bullish on every sector of the economy than I would be worried. Concern and some bearish sentiment is a good thing and helps form a base for a stronger economy particularly in Manhattan.

"Concern and some bearish sentiment is a good thing and helps form a base for a stronger economy particularly in Manhattan."

LMAO practicing spinning I see- you have a lot to catch up to if you want to replace Lawrence Yun, David Lereah's successor as Baghdad Bob.

MMAfia apparently you know all and the rest of us are in the dark about the upcoming crash that will be taking place in the Manhattan RE market. I wish you the best of luck on your prediction. However, I do enjoy reading the bleak economic forecasts that are quoted from the NY Post and Daily news that you religiously follow and paste all over the place.

Julia (OP) I agree with you. I closed on my place earlier this year and a couple of units in my building of comparable size/same line recently went on the market for substantially more. So go figure...

MMafia is doing the rest of you a favor by making his small contribution to bringing you all back to reality. The rest of you seem too content to keep paying higher and higher prices.

this doesn't help....should i rent for the next year or should i buy????

Julia - you have been on this site quite a bit. I say this out of respect. You've got the facts now. I think you can use them to make your own informed decision. I hope you didn't take that as an insult. It's just I see you posting a lot so I know you have access to all the data I have.

Likely you haven't fallen in love with something which is at a price you agree with. . .so unless you do. . .don't bite.

I bought earlier in the year but all the factors came together and so I bit.

Mmafia, when will you stop lyao at your own jokes?

I appreciate nova77 comments and take what I learn on the site and add it to other advice I get.

Julia, if you like something and can afford it then you should get it as Nova77 says. the set of options might increase over time making it easier to buy something, but i dont think prices will fluctuate to a point where you can try and time the market. i can say that my preference is to to own an apartment in ny but have not found something that equates to what i can afford (given my situation).

my own rental yield is low relative to what i could get an equivalent IO mortgage for so i dont mind paying rent ( i am ignoring price appreciation but my what ever preference you have + dont factor in the a lower mortgage because of a higher deposit because you need to account for the opportunity lost in using that money elsewhere ). i do make money out of my own money (history has shown) so tying up a few hundred thousand up in a deposit concerns me.

the result = i have preference to wait, i want to see what happens to mortgage rates, what happens to new develop supply and finally what happens to major bank bonuses. i work in a quant hedge fund group in one of the major banks. layoffs and low bonus expectations do exist. they have to. banking stocks are down (some 25%) and so are our large resticted stock positions in these banks (with our bonuses we have to take large equity positions in our own employers). so i am not optimistic - i am forcibly poorer that i was a few months back. i dont know if there is a relation to the RE market in NYC but i know this has caused me to hesitate.

so again i dont attempt to predict the market but certainly feel there is no reason to push myself into something now unless i fall head over heals for it. i have to take a step back because the market forces me to but you may be able to take advantage of that given i wont be one of the buyers lining up with you.

hopefully this gives you some perspective.

Anyone who can time the Manhattan RE market my hats off to you. I realize that there may be layoffs in the banking industry but do you really think those that will be getting laid off are jumping off the bridges or heading for the hills. They probably will find other positions some with higher salaries but lower bonuses and other will find opportunities with lower salaries and higher bonus. Others may decide to start there own company and make a boatload more while others will try to start there own company and flop. The fact of the matter is the labor market is strong and companies are gearing up for 2008 so this last quarter the job market will get stronger. Couple this with tenacious workaholics running around in Manhattan and we may see a nice finish by years end. What does this have to do with the Manhattan RE market--probably nothing. People who live and work in Manhattan have proved to be resilient in the past and will be resilient in the future.
Don't sell short a New Yorker particularly one that lives in Manhattan.

Pseudonym, comparisons with the market decline of the early '90s are of limited utility. Not only was there a deep recession but the prevailing view was that NYC was a dying city and an nasty place to live. Buyer demand then was nothing compared to what it is now; foreigners didn't even want to come here as tourists, let alone buy apartments; and a lot of the college grads who now come here to work were going to Boston, Seattle, SF, etc. And the sellers? In many cases, they weren't selling to trade up -- they were selling to get the hell out. I hear what you're saying about psychology and perception, but the fundamental attitudes of buyers and sellers in this market have shifted 180 degrees in the last 15 years.

Spunky - your comments are never nuanced and the result leaves a saccharine impression. Unless you provide a more mixed (not so overtly biased) perspective, it is unlikely people will take you seriously on this forum. I did buy in January (with different interest rates etc) - no regrets - but I understand other perspectives (e.g. lupus'). I must say that Mafia has a similar effect as he is the opposite - all doomsday.

Not sure that anyone predicting a rise or fall in the housing market should be taken seriously.
I do understand your agreeing with Lupus since he agrees with you as well. I guess I may of offended you by not agreeing with you as well.

julia, ask yourself:
- how long do you see yourself staying here?
- do you like what you do for work?
- do you have dependents/spouse? and does this decision affect them?
- do you have the assets/cash to stay in this new apartment for a long time?
- what are your alternatives? do you have a car and like do you like driving in traffic?

Not even sure if Julia should be taken seriously as well.

Spunky...you question if i should be taken serious with a name Spunky!!!...Spaceboy thank you for your advice. I'm going to rent and see what happens.

Julia good move because now is a bad time to buy RE in Manhattan. Wait till it drops which will be soon and then buy at its lowest point before it starts going up again.

so spunky, how will you KNOW when we're at the "lowest point"?

That's exactly my point. Reminds me of a recent episode. My friend who has been renting an apartment in Manhattan for 10 years had an option to buy his apartment for 1.2 mil about 8 years ago. I told him to buy it then and his reply was "nah, nah it's too expensive." Well now the same apartment is selling for 3.5 mil and he's all upset. He tells me "dam I could of been a millionaire, I should of bought the apartment 8 years ago" So I ask him why don't you buy it now. He says "Now, Now it's too expensive" Go figure.

"Spunky...you question if i should be taken serious with a name Spunky!!!...Spaceboy thank you for your advice"-- Your right Spaceboy is a more respectable and refined name.

Spunky....point taken. Now take your blankey and go in the corner

Julia, you have been posting on these boards for a long time whining about whether you should rent or buy and offering nothing of value in your posts. How about you "take your blankey" and go away.

I guess I'm being asked to leave the party...will do. I won't be posting but I will definitely be reading the blogs because I do learn a great deal. STEALth1 how fortunate for you that you know all the answers.

christ. You know, Julia, if offering something of value were a condition to posting on this board, it would be empty.

For what it's worth, I'm not offended or annoyed by your comments/questions, and PLEASE don't EVER let any other poster on these boards bully you off. That would be pathetic.

Amen

I have to agree with that because I continue to leave nothing of value on these boards and look at me, I'm still here.

and so is MMAfia, anon3, OLDNY etc.

whoo hoo - just flipped my new condo (2 months old / signed contract in May) made 22%!!!!!