Don't buy

What you failed to realize in your number crunching is that life isn't only about money. There are many intangibles in life. The number in your bank account is one aspect of quality of life.

Of course plus there's always the government hand out to fall back on.

Right, ugly one?

this clown posts the same thing evry couple weeks. just ignore

is this a troll? THanks for stating your assumptions at the outset because it is only necessary to refute them and not the rest of your post.

2) the s&p 500 is not guaranteed increase 'at a real rate of 8% per annum' . From Jan 1 2000 to Jan 5 2010 The s&p 500 LOST 23%

Also, who pays 6% interest on a mortgage these days ( or any day since 2008) ?

Yes, exbreezy is a troll with nothing to contribute to the discussion.

I'll buy when it makes more financial sense than to rent. That means prices need to still come down around 20 percent before I make the plunge.

exbreezy forgot that 100% of the mortgage interests are tax income deductible.

exbreezy
so? why are you devoting your valuable time here.
Get your great rental and move on to make the world a better place.
Walking is a way better deal than driving (for your health and the environment) yet people still buy cars.

The math and incredible # of assumptions above are ludicrous. Not even worth replying in detain. In short - wrong.

This is an old stevejhx post

"What you failed to realize in your number crunching is that life isn't only about money. There are many intangibles in life. The number in your bank account is one aspect of quality of life"

Agreed.

Personally, I find the worry-free lifestyle of renting worth paying a little extra for in this town.
I'm sure others want to stay in the same apartment till they die (if they can afford the one they want)

There are other reasons besides $$, of course... but those sorts of things work both ways.

As a landlord, I totally agree. Everyone, PLEASE keep renting. I need to pay my mortgage and taxes and you renters help me pay the bank, state and city. Always keep renting! Thank you!

My viewpoint is that if one actually HAS to crunch the rent vs. buy comparisons with regards to living in Manhattan (regardless of he numbers one uses) in the first place, one is probably not in a position to be considering buying at all.

You can crunch the #s all you want, but like another poster wrote, there is more to it than that.

Like many here, I have been both a renter and an owner. There are pos and negs to both and I really cant say which one I prefer on the whole. If you have the money, and are a "stay put" kind of a person/family or dont really mind the constant maintenance owning requires, then it likely makes sense to buy. If you are financially unstable, may need/want to move or upgrade, or dont want to be bothered by all of the legwork that comes with owning, then you probably are a good rental candidate.

matsonjones: that's a rather silly statement. It's your believe that if you can afford to buy an investment, you shouldn't be trying to figure out if it is, in fact, a good investment?

Not sure how you've made your money - or if you have - but I'd like to hold on to mine.

I will buy when it makes sense. And I can afford to buy.

"As a landlord, I totally agree. Everyone, PLEASE keep renting. I need to pay my mortgage and taxes and you renters help me pay the bank, state and city."

Of course, I'm paying less than you are. How does that work for you?

Thats for subsidizing me!

somewherelse

Yes. But after 5-10 years you walk away and have no equity while the landlord does. So I am sure it works GREAT for him :)

omfg... did i hear that correctly?

matsoncajones... did you actually say that? It's been awhile since I heard the "if you gotta ask, you can't afford it." Oh, lordy...so let me ask you financial geniuses.... why list it if you don't need to sell it? why advertise? shouldn't we all just "be" HOW fking ZEN you ninny.... and that goes for the rest of the financial ninnies out there.... how just fking zen of you.

Renting makes a lot of sense for a lot of people a lot of the time. But the logic and supporting "facts" of this post have been disproven to the extent they weren't flawed on their face.

what's great for elsewhere, and what you somehow manage to overlook, samcraig; is that elsewhere gets to make other investments with his monthly savings--and he gets to live in subsidized housing courtesy of mr landlord!!

get it?? and mr landlord's equity is worth shit compared to what it was 3 years ago--bad deal for mr landlord--he been subsidizing elsewhere while his equity done gone south

Wbottom - I didn't fail to see anything. The market the past 3 years hasn't been any better than real estate. Who's to say which is a better investment unless you look at exact scenarios - including what would be invested, for how long vs what property would be bought and kept for how long.

The whole scenario has a million and one permutations. There's no hard and fast rule.

"Yes. But after 5-10 years you walk away and have no equity while the landlord does. So I am sure it works GREAT for him :)"

Yes, let him pay 100k for 50k in equity. Sounds like that works GREAT. ;-)

"equity", while having some truth to it, is the word that has allowed way too many people to make really stupid decisions...

"what's great for elsewhere, and what you somehow manage to overlook, samcraig; is that elsewhere gets to make other investments with his monthly savings--and he gets to live in subsidized housing courtesy of mr landlord!!

get it?? and mr landlord's equity is worth shit compared to what it was 3 years ago--bad deal for mr landlord--he been subsidizing elsewhere while his equity done gone south"

Bingo. The folks who owned the apartments I've lived in the last few years not only lost hundreds of thousands in equity, but had to pay more than I gave them just to cover interest, taxes, etc.

Thanks for the subsidy.

Yes - clearly YOUR situation is the rule. Everyone who buys or has bought in the last few years is stupid and is going to lose their investment. I'm glad you're not my financial planner.

renting would be great but in NYC every time your lease is up the landlord can raise it and usually does, and if you are renting for many years you can wind up with an exhorbitant rent so you have to not mind potentially having to move often.

"Bingo. The folks who owned the apartments I've lived in the last few years not only lost hundreds of thousands in equity, but had to pay more than I gave them just to cover interest, taxes, etc."

Wow, that's a giant leap even for you swe

Agreed JM, there is now way what swe said was accurate.

People who bought when their building went co-op did really well over the long run. So the place is down a quarter in three years, still you are sitting pretty since the 70s, 80s or 90s.

Hey I'm a landlord and have some great tenants too! Hey again, maybe they make money with their downpayments elsewhere and God bless them if they do. I know that owning real estate is a fantastic investment. I love paying down my pricipal every month and eventually the loans will be gone. I get magnificent tax write offs against my ordinary income and love the appreciation. It's tought to get a better risk/return scenario than real estate. Watching your stock go up and down can make you INSANE! :)

what do coop conversions have to do with this conversation?

watching one's leveraged, illiquid real estate investments go up and down, while wondering which of your tenants will screw you, as you deal with negative cash flow, can be a mite bit stressful too

seems stocks are up nearly 100% off the recent los--while people on this board argue over whether NY real estate remains down 20 or 30% from peak

Wbottom, it's not stressful. Manhattan tenants are the greatest. Of course do the whole screening process, get that lease in place and chill. I'll go 6 months without speaking to some tenats. Yes, liquidity is an issue but if you are organized then it s/b no problem. That's the tough part for newbies. But you live and learn. I did.

Again here is the best part: "I love paying down my pricipal every month and eventually the loans will be gone."

Wbottom, you are living in the past bro. Real estate is down 6-8% from that Mount Everest peak in late07-early 08(and who cares anyway). It's steady as she goes now and most likely back to historical appreciation of 4-5% a year.

The best part of real estate is it MAKES you a long term investor b/c of it's nature and you can't watch the stock go up/down evry second.

"I love paying down my pricipal every month and eventually the loans will be gone."

same as:

"i love that i bought a bunch of securities with leverage, and that i pay down loans with dividends and interest i receive, and inject outside $$ to cover my negative cash flow--eventually my stock loans will be "gone" and i'll own a buncha stock valued at who knows what"

wbottom - it's easy to be stubborn. It's harder to look at what's being said and admit that you're either wrong or that there are different scenarios and situations. In some cases, renting makes the most sense. But in others - buying makes more sense. Period. And this thread started off with the most ludicrous "data" I've ever read here.

Are some people actually saying that people who owned co-ops should have sold their co-ops and switched to renting?

that some people bought coops from sponsors in the 70's and 80's, and are still above water, is not interesting to me

"Wbottom, you are living in the past bro. Real estate is down 6-8% from that Mount Everest peak in late07-early 08(and who cares anyway). It's steady as she goes now and most likely back to historical appreciation of 4-5% a year"

your "data" on the last few years is most unique--and glad you see things so clearly for the future--both components of the "buy now or be priced out forever" approach--5% per year compounding says your bull train will leave me in the dust--enjoy the ride

my approach says: "the least likely scenario for NY real estate is that it immediately begins to outperform other investments significantly and does so ongoing"

and in the meantime, a comp to my rental would be way more expensive to buy, so, for the moment, i am well-paid to patiently wait for your train to stall or derail

one other thing: there's a really good chance that NY RE take another serious puke shot

So both steveF and Wbottom are happy with their situations. Why try to convince others?

I doubt that a comp to your rental is way more expensive to buy right now.

"one other thing: there's a really good chance that NY RE take another serious puke shot"

Explain further. When? Why? How much?

I didn't buy real estate for a short term churn and burn. THAT would be silly. To each their own.

My buyer bought a townhouse in 1999 for around 1 Million. It is now worth approx. 8 Million. Can some genius do the math on that one? Something like a 25% return, is that right?

He has had a GREAT life in the years he has been living in the house.

Tell me - Which is more fulfilling in your life?

[A] - to have your money sitting in stocks?
OR
[B] - to have your money invested in your own home/apartment that you actually get to experience and LIVE in and call your OWN?

My lucky buyer of course has both [A] and [B]

...................................................."Let me not be old before I am wise"

"My buyer bought a townhouse in 1999 for around 1 Million. It is now worth approx. 8 Million. Can some genius do the math on that one? Something like a 25% return, is that right?"

Logic only a broker can love. the rates of return on NYC residential real estate over the last 10 years have been a statistical aberation. The returns are several standard devations from the average - Meaning those rates of return are very very unlikely to ever happen again. Your buyer got lucky, there is no reasoning that anybody can come up with, no matter how bullish, that could predict that a new buyer would ever see those rates of return again..

Cpalms, Just like the same house worth 5k in 1955 was worth 30k in 1975 and 150k in 1990 and 600k in 2010?

my buyer bought a house in 07 for 5 mm--he needs to sell it right now because he became disabled and can no longer work--he has it listed for 3.5mm and hasnt seen any offers near that--wise spot to be in no? for a young guy--

my other buyer bought a house in 1987 took him til 1996 to sell it at cost+transaction$$--oh shit, i screwed this guy too--and stocks had doubled (from the 87 hi no less) by then--oh well it aint my money

my other buyer bought a house in 1974--his piece of shit broke even in around 81--

whatever--anyone wanna buy a house? come be wise with me!!

thats why you are a BORKER!!!

LICComment - please tell us about rent vs. buy in your condo building.

Wbottom, I give you the benefit of the doubt and assume you're actually a level-headed person with whom I'd ultimately agree with on a lot of personal finance issues, but it's exactly that kind of pointless drivel and misdirected antagonism that has made this site kind of suck for months now. Going after brokers is like trying to take home the girl who's in a corner, passed out drunk.

"Cpalms, Just like the same house worth 5k in 1955 was worth 30k in 1975 and 150k in 1990 and 600k in 2010?"

what house? umm, data needs to be supported, no?

at least your example has a somewhat reasonable but still quite high annual return of about 9% not the totally unreplicatable 25% annual return that dara coleman cited...however, just like dara you forgot to deduct expenses... you know, silly things that brokers hate to talk about like taxes, mortgage interest, bills, maintenence, etc.

"Wbottom, I give you the benefit of the doubt and assume you're actually a level-headed person with whom I'd ultimately agree with on a lot of personal finance issues, but it's exactly that kind of pointless drivel and misdirected antagonism that has made this site kind of suck for months now."

Hey BJ
Great sentence the above pretends to be, verbal finery (read verbiage) and all. Problem is, it's completely unintelligible. Whatever

LICC, how about the rent/buy? let's just start with sq ft and numbers.

I don't think it's a great time to buy, but in certain neighborhoods, the rental inventory is so low compared to sales, and the quality differs to such an extent that it seems to indicate buying is better if you want a certain lifestyle.

Wbottom - I guess you changed career after your experiences in Real Estate. And no I am not as you say a 'borker' although I do work for a brokerage.

Cpalms - I am just saying that is what my buyer did. A wee bit of luck is true but a well calculated bit of research and dialogue can do wonders. NYC Real Estate is a little like trains, there are many of them and they have many different directions. Pick a dog and you pay the price. Do a little work, keep eyes open, know your cash-flow, have a plan, pick a good block, pick a good building, pick a location that's growing or at least moving and off we go........the future is always uncertain but that's life...We all will be dead soon enough.

"Every spirit build itself a house and beyond its house a World and beyond it's World a Heaven.........Know then that the World exists for you, build therefore your own World"

Go ahead Wb, what is your comparable?

I agree it's not a good time to buy for a short term investment. But if you're planning on spending several years in the same apartment it's fine to buy. Will you see astronomical returns - maybe.. maybe not. But, at least in NYC, for a long term investment, you're likely to see a decent return. And mileage will vary based on where is bought and what the scenario is for that individual. The overgeneralization in this thread - and definitely the original poster is just wrong. No two ways to slice it.

"Great sentence the above pretends to be, verbal finery (read verbiage) and all. Problem is, it's completely unintelligible. Whatever"

Right, sorry you don't understand English. Best to ignore stuff that flies over you head, I guess.

"Wbottom, I give you the benefit of the doubt and assume you're actually a level-headed person with whom I'd ultimately agree with on a lot of personal finance issues, but it's exactly that kind of pointless drivel and misdirected antagonism that has made this site kind of suck for months now."

read your "english" again, carefully, fool--nice sentence...hahahahaha

and dara, you are in fact, a borker--this site is not a good place for you

> Wow, that's a giant leap even for you swe

No, I'm talking about my specific situation in 2 specific apartments, and I know the financial details.

The guy that claimed that I'm speaking for all apartments everywhere is off his rocker.

"Wbottom, you are living in the past bro. Real estate is down 6-8% from that Mount Everest peak in late07-early 08(and who cares anyway). It's steady as she goes now and most likely back to historical appreciation of 4-5% a year."

wbottom might be in the past, but steveF, you are in neverneverland. Medians in every single apartment size are still down over 20%. Studios and one bedrooms fell again in the last quarterlies.

Time for you to get out of your pajamas and trying to spin your fantasies.

swe, just for you honey from prudential for Q3 - 10/1

http://finance.yahoo.com/news/Prudential-Douglas-Ellimans-prnews-3385861713.html?x=0

Co-op Market

-Median sales price of a co-op this quarter was $777,500, up 23.4% from $630,000 in the prior year quarter.

-Number of sales jumped by 32.7% to 1,320 units, from 995 units in the same period last year.

-Listing inventory levels for co-ops increased 5.9% to 4,065 units from 3,840 units in the prior year quarter.

-Co-ops accounted for 49.6% of all apartment sales and 50% of all inventory this quarter.

Condo Market

-Median sales price of a condo this quarter was $1,120,000, up 10.3% from the prior year quarter result of $1,015,124.

-Number of sales increased by 8.6% to 1,341 units, from 1,235 units in the same period last year.

-Listing inventory levels for condos fell 10.8% to 4,058 units from 4,549 units in the prior year quarter.

-Condos accounted for 50.4% of all apartment sales and 50% of all inventory (excluding shadow) this quarter

swe's statements are not accurate. She cherry picks the peak periods when comparing the different apartment sizes.