Get ready for more Wall St layoffs

I'm sure there are many more banks that will have similar sized layoffs before this is all over. It amazes me that people think bonuses will be fine this year.

There are several of us who work on Wall Street who have explained in excruciating detail, since July, why bonuses will be down, and why there would likely be layoffs. You can't convince people, however, if they refuse to listen. This board is crawling with posters who are so very much rooting for one side or the other that all reason dies in mid-air.

What I continue to wonder, however, is why you think your bonus levels are so important. Not all of you, obviously, but most. You're only so many people, and you can only occupy so many units.

apparently it won't be bad for goldman...

aboutready - I assume you mean "important to the real estate market". Well, when bonuses are up, it's a huge argument used by those rooting for real estate prices to go higher. I guess when bonuses are going down, those same people question their importance.

So, well, it's tough to quantify, but bonuses are paid to people who work in NYC and in all likelihood live in NYC or very close. Those people need a place to live. They also like their money, and like to demonstrate how much they have by buying luxury goods. Apts in NYC are both a place to live and a luxury good. Therefore, each year bonuses go into real estate.

Btw, the timing of apt purchases based on bonuses is NOT just the spring. Bankers will buy based on EXPECTED bonuses, which means in the past that they buy in Q3 and Q4 as well as Q1 and Q2. Therefore, seasonality is a difficult way to measure the impact.

*** MERRILL LAYOFFS ARE NEXT. If their YTD September avg comp is down 27% vs last year and that's with only one quarter of bad earnings, imagine how much it's going to be down with Q4 on track to be as bad as or worse than Q3. Q1 and Q2 were 10%+ higher than last year. ***

Merrill's Average Pay Slides 27% in First Nine Months (Update2)

By Christine Harper

Oct. 24 (Bloomberg) -- Merrill Lynch & Co.'s average compensation per employee slid 27 percent in the first nine months to $181,308, the lowest of Wall Street's top five securities firms.

Merrill set aside $11.6 billion for compensation and benefits through the end of September, 15 percent less than a year earlier even as headcount rose. Revenue at the New York- based company, the third-biggest U.S. securities firm, dropped 23 percent on losses linked to subprime securities.

Merrill reported the largest quarterly loss in its 93-year history today because of $8.4 billion of writedowns related to home loans and debt products. Chief Financial Officer Jeffrey Edwards told analysts that the firm increased the portion of revenue it sets aside to pay employees by almost nine percentage points to 58.1 percent.

The higher ratio ``reflects our focus on continuing to recruit, retain top-tier talent to drive our growth initiatives,'' Edwards said. Company officials ``do not expect to reduce overall compensation levels in line with our significantly lower revenues, given that managers and employees of other businesses are producing record performance.''

Merrill employed 64,200 people at the end of September, 16 percent more than a year earlier, according to a company statement today.

``We expect management to initiate a major retrenchment'' in business related to mortgages and securities backed by pools of bonds and loans, Standard & Poor's said today in a statement. The rating company lowered its assessment of Merrill's creditworthiness and said the outlook remains negative.

First Franklin

Merrill said last month that it was cutting jobs at its subprime mortgage lender, First Franklin Financial Corp., ``in line with current business requirements,'' without providing specific figures. The division, which Merrill acquired 10 months ago for $1.3 billion, had 2,800 employees as of December 2006.

The company's shares were down $3.90, or 5.8 percent, to $63.22 at 4 p.m. in New York Stock Exchange composite trading. The stock has lost a third of its value this year, more than any of Wall Street's biggest securities firms.

Revenue and pay per employee at Merrill contrasts most sharply with Goldman Sachs Group Inc., the largest and most profitable Wall Street firm. Goldman, based in New York, reported last month that it set aside $16.9 billion to pay salaries, benefits and bonuses in the first nine months of its fiscal year, topping the record sum it paid for all of 2006.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net .

Last Updated: October 24, 2007 16:32 EDT

The investment world doesn't have an infinite number of people who need apartments. Many of you, however, will need preschool, kindergarten, and don't forget middle school, spots for your Jacadi-clad children sometime in the future.

Obviously bonuses reflect a certain economic reality. But that economic reality is that we are getting more and more productivity out of the masses, and they're receiving less and less of the pie. The real money is concentrated among a very few, percentage-wise, people. Changing our retirement savings system from a highly regulated, relatively conservative company-based pension system to a largely 401K-based mutual fund system has also had something to do with our markets.

I always say WWWD, what would Warren do. He loves to buy, but doesn't like risk. Berkshire has been fairly liquid recently. Hmm, why?

So much talk about wall st. bonuses - does this include hedge funds? Most are private so they're not making headlines - anybody want to chime in?

aboutready - I agree that the investment world doesn't have an infinite # of people who need apartments. But getting back to NYC real estate, I don't know how anyone can deny that the following factors played a significant role in the run up over the past 5 years (set aside interest rates and other factors or now): (1) rising employment in NYC, esp crazy hiring on WS and in other high-income professions (2) higher bonuses (3) rising stock prices of WS firms (hence, wealth effect on WS professionals who get paid a significant portion in stock) (4) other NYC industries that benefit from #1-3. Now #1-3 have gone in the other direction.

As to your comments regarding (1) schools (2) growing income disparity (3) retirement plans, I hear you, but what is your point - that everything's going to hell? that NYC doesn't have the educational infrastructure to support all the new wealthy inhabitants? that retirement plan regulation is driver of NYC real estate prices?

Btw, I'm also heavy in cash right now.

I have an example for you. Corcoran has a property that is listed both for sale and for rent. 30 West Street, new two bedrooms, 1526 square feet. It is for rent for $7000 a month. It is for sale for $1,799,000. If you have about $300,000 in cash, and good credit, you can purchase it. Corcoran's mortgage pop up shows 6.5% interest on a 10% down loan, which would be total monthlies of $12,502. At 7%, monthlies would be $13,040.

In 1995, a very low year, I bought a small two bedroom co-op at $125 per square foot. Two bedrooms were not hard to find at $200 per square foot. 12 years later I don't see that 1 - 3 would be sufficient for a 500% gain.

Look, only about 10000 units have been added to inventory this year. The city estimates an increase of over 90,000 units 2007-09. I think the math is ugly. I think this market has been fueled by extremely easy cash.

uptowngal - all the big banks will be down with the exception of GS. Hedge funds will be a mixed bag. Some are way up. Some are already out of business. But it hasn't been a good year for HF's in general. Although they are private they have to give monthly statements to investors and some of these investors leak the numbers to industry publications. So HF returns are basically public knowledge.

aboutready - bonuses are important because they form the vast majority of total compensation for well compensated people on wall street. With prices up about 100% in 5 years there arent many 35 year old doctors that can afford a $3mm apartment. Teachers and similarly compensated professions aren't even in the running. Those price levels are all driven by the record wall street bonuses in recent years.

aboutready--agree with your assessment. I bought in 98 and have seen a 500% gain which would normally breed confidence to buy again, but I see similar situations as you do. Corcoran had a 2BR/2BA apt for rent $4500 with a month free. It did not rent. Now on the market for $1.4M, the renting looked much more attractive. When I bought in '98, I was not only comforted by the prospect of capital appreciation (which still exists to a much lesser extent), but the fact that my monthly payment after deductions,etc. were saving me money. Now, I only have capital appreciation to bet on with limited opportunity to save on rent. In fact, in almost every case (esp with AMT), if we buy, we will net lose money every month versus renting and bet the apartment will appreciate a high rate to pay us back.

Right, but look at the inventory numbers. 10,000 or so out of the 90,000 or so under construction. Not counting the railyards, which will continue the expansion. There are only so many investment people who haven't already bought, and many of them are not going to want Solow's 4500 unit development in the East 40s.

I understand being priced out entirely. My husband is a 45 year old who recently made partner at a large law firm. I could buy in certain areas, but it would be a stretch and I'm unwilling to stretch in this market. My husband has been joking that I would have been far better off with my ex-boyfriend, a highly-placed investment guy, even if we'd divorced (as we certainly would have).]

Real estate is an investment that is not only about money, it's about emotion as well. The "herd mentality" that some write about. I know what the importance of the bonuses have been in the past, and in terms of the economy generally what the implication is now, but in terms of real estate I'm unsure now.

robocop - some time ago I built a model analyzing the rent v. buy tradeoff. The goal of the analysis was to determine the annual asset appreciation necessary to yield a minimum return on equity, assuming several different holding periods. The model incorporates closing costs, maintenance and other costs, etc.

I just looked at the analysis again assuming 7% jumbo, 20% down for a $1.4M apt vs. a $4,500 rental decision.

Assuming that you want a minimum return on your equity of 7.5% (or believe you could get that return), would need the apartment to appreciate at the following average annual rates to break even on a purchase, based on the length of your period of ownership:

Own for 2 years: Need 9% appreciation per year
Own for 5 years: Need 5.5% annual appreciation
10 years: 4.3%

With or without taxes? The unit at 30 West didn't seem to have an abatement, and if they're trying to sell above their purchase price (and presumably they are) the taxes may increase the year after the sale is recorded.

You also have to swallow the risk. I think if you have plenty of cash, comfortable liquid assets, and can hold onto a unit for 7-10 years real estate is almost always a good investment. I just doubt that there are enough people in this city in even close to that situation to buy these numbers of units.

YNH, FYI-- I just was quoted a 6.0% no points on a 5/1 ARM for a jumbo (condo). 6.25% for 10/1 ARM and 6.50 for 30 yr fixed. grant it, through a mortgage broker but one i trust.

--yourname..the monthly maintenance is $1750/month. assume AMT for no R.E. tax deductibility and a 25% of maintenance for mortgage deduction.

actually the above #s assumed 6.75%, $1400 a/t maint. assuming 6.5%, $1750/mo maint comes out pretty much exactly the same.

yourname---thanks..trust that was the quote anonymous got, but friends close to closing right now are not getting anything south of 7% as of yesterday on Jumbos. Sure the numbers get worse with rates over 7%

Maybe the NAR should hire Jim Mora as their new spokesman: "Layoffs? You kiddin' me? Don't talk about layoffs."

Robocop. Jumbos are back. Chase is offering me a 5/1 30 year interest only for only 6.125%. Well Fargo is also offering similar. I was totally surprised at the rate after this sub-prime mess. To get the good deals, you need to go to the banks directly. If you have income that can be verified, good credit and 20% down, you can get great rates. These deals are direct with the bank. I check with a mortgage broker, and they are definitely offering higher rates.

JT--see my post above. Why even entertain an IO feature at this point? You can get the 5/1 adjustable for 6% assuming excellent credit. Th emarket for good credit folks is indeed much better as banks are extremely eager to book more prime loans in this market.

Yes, but not many people qualify. Chase is actually offering me large amounts of revolving credit at rates LOWER than they are paying on my savings account. The Fed has continued to make money available, money is desperately looking for opportunity. I get calls routinely asking me if I would like to tap into my credit limits at very low rates. Doesn't that kind of define bubble?

Not many people qualify aboutready??
If you make 150k you can afford a 500k property.
If you make 300k you can afford a 1M property.

How many professionals in NYC make more then 150k? A lot. Low level finance and law jobs alone exceed 150k. If two of those people making 150k+ get married, they can afford a LOT more. Two people making 75k can afford a 500k property.

In most other places in the country, you'd be lucky to have a combined income of 150k.
That is why things are different here. As long as job and salaries are stable here, there will be high prices.

Not that many people will qualify who haven't already bought. Plus, many people who will qualify won't want (right now) what they will qualify for. My husband is a partner in a law firm. Not top tier, but right below. I still consider us priced out.

Also, if you make 300K your 1M property isn't going to be getting you a two bedroom these days. Since when did having children (or even one child) become a luxury? Since about 2003. Private school is over $30,000 per child. The math is ugly. I know MANY upper middle class people who can't or won't buy. They will help the next upswing when prices correct.

Also, aifamm, how do you define "afford." Bank qualification practices? No wonder we're in such a mess.

1) The "Upper middle class" lost their window to buy in Manhattan a few years ago because upper middle class in US = lower/middle class in manhattan. As long as that holds true, do you expect prices to be any different? With low level law or finance jobs paying more then dual incomes in most other parts of the country, does it matter what class you are vs. what your income is?

Bottom line, there was a window. I believe it is now closed for the upper middle class. That is actually my argument why prices will hold as the upper middle class will be a buffer for "falling prices", as most will move to the suburbs (though those prices are also high).

2) I felt like I left a buffer in there in my estimations. If you choose to send your child to a $30,000 private school because you want to purchase in Harlem, that doesn't mean the rest of us won't buy a home where we plan to send our kids to school in public school.

Sorry second comment was a bit harsh, but $30,0000 private school then is probably equivalent to an additional $500k in purchase price. My argument would be then, perhaps the "developing" neighborhoods are not necessarily cheaper then the neighborhoods with good schools?

Most people who make a lot of money don't want to send their kids to public school. Certainly not middle school. Many people have been thinking like this, and now the good public schools are incredibly overcrowded, and their kids now have to find middle school spots. I know one mother who left the open house for her zoned middle school shaking and in tears. She got lucky. She got one of the FOUR spots available at one good private school for 6th grade. One child is from another state, one commutes from Westchester, and two are from Manhattan. She felt she couldn't afford 13 years of private school for two children, so she took the risk.

I don't think you understand how manic this process gets. Some people only consider a group of 7 or so PRIVATE schools to be acceptable, the obnoxiously-termed so-called "junior ivies." While this is ridiculous, my daughter attends one of them. It is a very good school so at least I'm getting something for my money.

Schools need to get their graduates placed in good colleges to succeed. I have heard from counselors and alums who have been talking to people that the "uber" child is becoming a drag. The best schools want diversity, that's what the best colleges want. Looking at the class list for my daughter's school I am amazed at how many children are coming from afar, and in earlier years, to her school. If Manhattan residents won't provide the best schools with quality AND diversity, they'll go outside the borough to find it. They already do, it will just increase. Some schools will be happy to fill their ranks with the rich, the best won't.

aifamm--that argument has been around since the 80s (least as I can remember). Probably was around since the 50s before that. Manhattan has always and always will be expensive, much more so than outer boroughs and burbs. This "buffer" of which you speak doesn't exist. Low level law and finance jobs paid in the $50-60 K range in the mid 80s and that was a lot of money back then.

We're not really talking about a low level law job here. And to clarify, I could qualify and buy in many of the new buildings, a smallish 2 bedroom. It would be a bit of a reach, but I'd be well below my qualifying levels. It would be a bit of a reach because I like to take vacations once in awhile, and go out. If prices stay steady, in a year or two I could easily save enough for a larger down payment. I won't have the walker quite yet, but sometimes it seems so.

I know we were never guaranteed anything, but with three ivy league degrees between us, 14 years of intensely hard work, relatively moderate spending, wouldn't you think there would be an apartment with room for a reasonably-sized dining room table? Many of the $1.6m units don't.

Then I read Class Matters, or The Working Poor, and I feel like a whiny little bitch. We may pay $1600 a month for lousy health insurance, but at least we have it. I embody the American Dream, I am the first in my family to graduate from high school. I graduated from one of the best ivies. I am from a working-class union type family, complete with strikes every three years. You say class doesn't matter?

I was at an open house recently where the listing broker told the assembled crowd - you've got to stretch people. One guy said he was pretty stretched already. She said, stretch more. We're stretching so far we're going to snap.

aboutready,
Regading property, you said you owned in manhattan. Why didn't you keep your property, and rent it out? Take the AMT deduction, and go rent a 2BR until you sort things out? You'd still have real estate in your portfolio, you'd get the tax deduction... you might even have another public school option. Regardless, you should be able to find something for 1.6M.

Regarding schools, I went to private school and an ivy. My parents sacrificed to put me through private school... and honestly I'm not sure if it was worth it or not. I certainly wouldn't fault you if you decided to sacrifice for your kids. However, not everyone that went to private school went to colleges that justified the money spent. In my opinion, it was not justified for 50% of my class. And how do you choose between a "tough & crowded" public school or "snobby & snotty" private school. By the way, there are plenty of public high schools with incredible college placement levels, including Bronx Sci and Stuy in NYC. I bought my home based on good lower schools, I guess we'll see how good they are. Maybe I will feel differently later, but my plan is to use private school as a backup.

aboutready - I have come across many of your posts on this board and my general impression is that you "over analyze" or "over think" everything. Maybe it would help if you took a step back - pinpoint the reasons why a gap exists between the life style you are living and the lifestyle you would like to be living. I don't think the NY real estate market can be fully responsible for this gap. With "three ivy league degrees" between the two of you, NYC should be full of lucrative employment opportunities, especially in law. I sense something deeper here that is not being addressed. Sorry for the "armchair" psychology!!

aboutready - just to follow up on stealth1's insightful comments.

Is everything okay at home? Did you have a healthy, happy childhood? Because your posts suggest that there is something much deeper at play here. Hey, I'm no psychologist, but judging from the scant tidbits of information you've shared with us as an anonymous poster, I would say that you are wrestling with a disorder of profound consequence if left untreated. A stifling social anxiety perhaps, or a debilitating depression that's left you virtually paralyzed?

Hey, I'm just joshing ya. Couldn't help myself after reading stealth's post.

yournamehere, couldn't have said it better myself!!

Look, I'm just trying to add some sense of what we mortals are encountering. (to stealth 1 and yournamehere). To aifamm, please. First you say that there are plenty of people who can afford property, then the upper middle class has been forced out. There are great public high schools. Do you know how hard they are to get into? And first, you have to get through preschool (one high level Citi employee accused of trying to bribe his way in), kingergarten and middle school.

Can any of you recall studying the Ancien Regime? This is what happens when the upper middle class becomes disenfranchised. Hey, I happen to have a degree in psychology, and I can concur that there IS something deeper at play here. Not just with me, with a lot of us.

Stealth 1, I may overanalyze, but at least I think. Many of the people in this market haven't been thinking about anything other than the quick dollar for an awfully long time.

Warren Spector, will I cry for him? No, he'll be perfectly fine with his hundreds of millions playing bridge in his Martha's Vineyard enclave until his "brilliant" mind can again find a place to play in the market.

Me, will I cry for myself? Not really, my husband works for a firm that is largely litigation based (hence the second-tier level). Litigation shops always do well during downturns. I imagime the bankruptcy and restructuring people are feeling kind of saucy right now also. We'll do okay in the end, I'm just really angry at the greed and stupidity that made this situation occur.

Am I going to cry for the guy at Wal-Mart who lives one paycheck away from being homeless? Well, I do come from humble roots, I am fairly empathetic, and I did volunteer at soup kitchens during the last downturn, so yes maybe I will shed a few tears. Does this make me a psychological nightmare, or maybe just human?

>>> First you say that there are plenty of people who can afford property, then the upper middle class has been forced out.

Yes, because manhattan is a rich town. Thus America's broader upper middle class feels poor here. What is incorrect with that statement? It is true. If you make 100k, you'd feel rich in the midwest, but you're nowhere near the top of the food chain here.

>>> There are great public high schools. Do you know how hard they are to get into? And first, you have to get through preschool (one high level Citi employee accused of trying to bribe his way in), kingergarten and middle school.

Believe it or not, getting into a private school or feeder school is still not a clear path to success. Just because your kids are in those private schools does not assure them of the few limited spots that school has into the feeder high schools. In fact, the competition might be tougher and with better connections.

aboutready - please note the sarcasm in my previous post. It was a response to the absurdity of stealth1's effort to psychoanalyze you down rather than debate.

Aboutready - I think you're right on target and my family personally shares many of your same issues. At the end of the day NYC is priced ONLY for those in global finance (hedge-funds, private equity), world-class entrepreneurs and inherited wealth. I choose not to be in those 'fields'; Am still a sr. level exec and NYC is still a stretch.

The amount that you will qualify for at a bank has nothing to do with what you should spend. Stealth1 is clearly a mean-spirited idiot.

grunty- Manhattan is certainly NOT priced only for "those in global finance, world-class entrepreneurs and inherited wealth". Look around you my friend - there are thousands of artists, waiters, actors, professors, students ect. all living in the city who some how find a way to pay their way WITHOUT COMPLAINING ABOUT EVERYONES ELSE'S LIFESTYLE! There is a lot about the city to appreciate and it doesn't always take a lot of $$. This point obviously evades both you and aboutready, who appear to want to blame "the markets" and everything else for whatever financial short comings you may have. Further, you obviously take no delight in all the wonderful things the city provides that doesn't require millions of dollars(museums, ethnic food,theatre). As far as me being a "mean-spirited idiot" - I call them as I see them. Complaining and negativity will get you exactly where you are!

Stealth1 - are you an "artist, waiter, actor, professor, student"?

stealth--- I highly doubt the other posters are talking about situations where people are crammed 5 into a 2 BR and/or spend every last dime they have on a $2000 studio (which is what the types you listed are inclined to do). More likely we are talking about people who own or are in the market for 1000 psf and up apartments in nice neighborhoods. I'm certain some in the categories you listed are owners/buyers, but lets be honest...not many. and frankly, I've had problems finding an "affordable" apartment but thats probably because i'm cheap and my definition of affordable probably departs from yours.

Some of the commentary on this thread brings to light why "stretching" as early as you can, on whatever scale you can, is a critical notion if you ever want to get into the Manhattan RE market.

What people fail to realize is that the market is not just fueled by "new" money (that's is the hardest for people to part with) but "flipped" money (or funny money as my wife and I call it.) This is the $ that you have made in the run up to the market that essentially gets traded into other over-priced property, and you never really get to appreciate until you leave NYC completely (This is the money that quant jokeys on these boards will tell you is best cashed out and put into the market)

Similar to aboutready, our HH Inc is about $350K a year, but we both bought our first places 10 years ago, flipped and flipped again and now have $2M+ unit in a top bldg in Tribeca. We could never have bought that from "scratch" at this point in our lives (we are under 40). Basically, a little less barhopping in our 20's and my wife and I were able to live comfortably in our 30's.

aboutready, I hate to say this, but I think you missed your window. You are too set in your over priced private school lifestyle to make a dent in the market. Even a 10% correction is going to be out of reach.

I think many more people than most care to admit are city-lovers whose "funny money" investmenst will never see the light of a %yield calculation until the day they die or they leave NYC.

Take heed, youngsters. By when you think you can't or you will never have a shot in this town.

mark z. what was the progression. studio/studio to 1 br to 2/3 br? Also, did you start in the fringe nabes? nice job.

yes, mark z., well put.

Grunty/totally anon. - no I am not an "artist, waiter, actor, professor or student". But it is irrelevant what my occupation is - the point is that everyone living in Manhattan, whether you are a waiter or a banker, can look around and readily find someone who is living "larger". I need a 4 bedroom apartment for my family but might have to make do with a 3. I would like to double my apt. budget but my bonus might suck this year - We ALL compromise. I do so because I have concluded that the city "gives back" enough to justify the compromises. Further, the compromises keep me VERY motivated. Having said that, I would never bitch about my lifestyle - if I was as unsatisfied as some of the posters on this Board appear to be, I would kick myself in the ass and get out there and make more $$. You live in NYC- opportunity is abundant. In my opinion, your energy is misguided.

Just as an aside. What made New York great was the diversity of people. I grew up here and got through the 70s and 80s when things were pretty run down. Examples include hookers on 86th Street, sparks flying off half the subway cars and grafitti everywhere. If you were upper middle class you could afford a pre-war 7 without too much sweat and lawyers and investment bankers made approximately the same salaries.

Now we are essentially London having lost our middle class and the artists that made this city really interesting. We will also lose the non-Wall Street professional class, so the ultra rich can have their playground and not worry about our petty gentilities or manners.

It is worth noting that the "old hands" in asset management and hedge funds still ride the subway (I see them) but the younger upstarts who work for them can only afford to take private cars. This city is not getting better. It is getting arrogant and conceited and real estate is a symtom. We all see it and only a hard recession will restore reality.

bsc, I hear what you are saying but gone are the hookers, sparks, grafitti, and crime. That makes NYC more valuable To stealth1's point, I would rather sacrifice some square footage and a laundry machine so I can live in a great neighborhood with low crime and lots to do. Maybe some people should ask themselves what they really need instead of what they really want?

btw, I've lived in London and sacrificed even more so I could live in a great neighborhood. I had friends that had bigger / nicer places but lived 45 min away from city center. There is always a choice.

markz - well said

Yep, NYC sold its soul. Suburbanites can now live here and enjoy their little piece of clean, crap and needle free concrete. Broadway is all about revivals and Disney, playing it safe - producers can't afford to be experimental and take a huge multi million dollar risk. Same thing with retail - more and more big chains, gone are the interesting, quirky little businesses that made the city unique - you know, something for everyone. Gone is the diversity: racial, economic, creative and political. I miss starting conversations at the donut shop with the other customers, discussing all sorts of topics. Intellectually stimulating, and learning new perspectives. I miss the sense of community walking down the sidewalk, the sidewalk is so crowded now it's crazy! There's something wrong when half the kids in public school live in multi million dollar penthouses, and the other half is public housing, or families crammed into 1 bedrooms. Nope, this city has definitely lost it's spark, it's gone, it's been sold to the highest corporate builder. Time to move to the burbs, follow the artists (isn't that always the way), and capture the vibe elsewhere!

hmmmm, donut shops, needle infested sidewalks, quirky little pawn shops, empty sidewalks...why don't you give Detroit a whirl?

totallyanon . . . we both started with small 1brs (UWS / Murray Hill), flipped those, pooled money, bought and gut renoed a small 2BR downtown, flipped that, then bought a flex 3Br in Tribeca. It took about 10 years, but we got where we wanted to be. I know a house shouldn't be your piggy bank, but for us, it was probably the only way we could have accumulated any real capital without blowing it on all the good stuff that NYC has to offer.

As a response to those wishing for the "old New York". You either: 1) weren't here 15-20 years ago or 2) are 25 or younger and are still pissing in doorways at 4AM (like I was 15 years ago)

Agree that the loss of small businesses is very disheartening, but a small price for the dirt, crime and grime that used to be here. I guess as I enter full on yuppiehood, with a kid in tow, the whole pissing in doorways thing just is a little old, and losing its nostalgia factor . . . is there anything wrong with a safe, clean, urban environment? Isnt that what Brooklyn was in the 50's? Why does urban living always have to be associated with a "rough edge?"?

I don't understand this longing for mom and pop shops which used to rip us off, but do it with a friendly smile. For me, I have no problem buying items from large chains, Duane Reade, Lowes, Home Depot, etc. because they have better service and better selection. "Old" New York is bullshit, an idea in people's heads that never existed. What they really "long" for is their childhood, which is why old people always lament how much better it was when they were young. For me, NYC is MUCH better now than it was in the 80s and 90s because the crime has shot WAY the hell down. The affordability issue is a concern, true, but people forget that apartments were not cheap in the 80s (by 80s dollars) and salaries were much lower. When Dinkins ran this town (and I use the term "ran" liberally), and people forget this, there was a brain and people drain from this town. back then, everyone was moving to Atlanta, Arizona, Florida, etc... People went away for college and didn't come back. Now everyone comes back, including people from the rest of the country. NYC is a talent magnet again, as it should be. Its better for the country that way. And its better for NYC that way.

Well said totallyanonymous. I guess we all hate to admit it, but it is true. Remember the days of buying electronics in your freindly Times Square TV store? (special deal for you today!). I'll take Best Buy any day.

I remember telling people I was moving here 16 years ago. They thought I was nuts. Charlotte, Austin, Raleigh . .. those were the places to be!

Noone really wants to live in a craphole. Even artists like a clean, safe neighborhood -- and will turn a crappy one around to make it so if they have to (SOHO, West Vill, Williamsburg). I just think most of that "work" has been done in Manhattan . . . so what do you want people to do -- mess up their own neighborhoods so a new generation has to live gritty so they can "beautify?"

markznyc, in another thread I discussed with aboutready about her selling too soon and was about to post that she had all the stars aligned when she bought at the bottom of the market in 1995 but she blew it. Then I saw your post.

You are absolutely right of course that your path is the best path and is one my wife and I followed. We are similarly ensconsed in a great apt in tribeca after buying 10 years ago a smaller place.
I have seen too many people try to time the market when selling only to see prices run away.

Aboutready, I feel for you but I think you have to let it go now. As mark said, there was a window of opportunity but it passed. Having said that I do enjoy reading your posts because they are well thought out - I just think you are punishing yourself too much by delving into this so much (aplogies to yournamehere).

Actually, I quit reading this thread after a certain number of comments, but in another thread I was told that there were some generally interested comments. I blog because I enjoy it, usually because I love real estate. Sorry people, sometimes sarcasm is difficult to discern when so many comments are directed at you.

Nobody needs to "feel for me." I really don't care that I didn't optimize my profit a few years ago. (I did so a couple of times in the previous two decades, you can't always time perfectly). I'll do just fine in the end. If you think my window has passed, well, I won't say you can't read the tea leaves, because I don't read the tea leaves myself, but... Believe me, we have NOT been priced out, even in the short term. I choose to be priced out..

I am not punishing myself in the slightest, I would not even BEGIN to do something different.

aifamm, actually I have real experience in this arena. I'm sure that i've mentioned that neither of my parents graduated from high school, but I made it to the ivy league. My husband is the same, he attended a very bad southern public school system, and luckily was accepted to an ivy league school. (By the way, I never wanted to go Ivy League, I wanted Cal.) You're right, many children in the best private schools DON'T do as well (total numbers and percentages) as other qualified candidates.

BUT...tell this to the people who apply. My daughter's school is in the top ten % of school in terms of Harvard, Yale, Princeton martriculation. Do I care? Only sort of. And sometimes I think not. My kid is a great person, who doesn't need at this age to care in the slightest. So I try to care, but only enough, for her.

aboutready, I can understand your desire to make sure your daughter gets a good start, a better start then you did. My parents gave me that start. So I of course want to do the same for my kids. Ultimately though, the success of your kids depends entirely on the kids themselves. For instance, your own desire and motivation and drive enabled both you and your hubby to rise about your surroundings so your parents did something right.

I'd like your thoughts on my internal struggles/questions related to schools and real estate. (I was going to engage in a typical rent vs. buy calculation over 13 years. However, without a long explanation that that is a losing proposition for renting and this would detract from my main question/thought.)

Did you go through a evaluation process of Manhattan public schools? How do you determine if the school is up to par with private schools? If you had the opportunity to get a 2BR in a "good school" neighborhood, would you still choose to send your child to private school?

Aifamm - Yes I did look at public schools. We had an accepted offer out on a property in Tribeca (ps 234) but we didn't go to contract because I was very worried about the middle school process. (Sadly, 9/11 occurred shortly thereafter, so I was lucky on another level). I believe in public school, but it didn't seem like the wisest choice for our daughter. We actually sold our 2BR in Chelsea AFTER our daughter entered private school (and we bought it while she was in preschool, instead of the Tribeca apartment). I chose to rent in the city and invest in the property upstate. I am pretty sure I'll be buying again in the city within two years.

There are a number of very good public elementary schools. For many children, they would be a BETTER choice than private schools. Some private school environments (and parents) heap way too much pressure on 7 year olds. Then again, some public schools, from what I've heard, have become just as bad, if not worse, because of test score pressures. But after elementary school comes middle school, and there the picture is just grim. www.insideschools.org does a good job of comparing the public schools. There's also a book out that reviews the best options. If you think you'll be moving before middle school, I'd say many public schools would be fine.

Each child is different. Each parent has to weigh the abilities of their children against the educational opportunities available. And alot of times we can only attempt an educated guess. 4 and 5 year olds don't always test so accurately. An experienced and HONEST pre-school director can be invaluable. I believe it will be a very good move, in terms of resale potential, to buy in the areas with good public schools. Whether the school available will be the best choice for a child depends entirely upon that child, and how much you are willing to risk not finding a spot for middle school. It's never bad to have the extra option up front, however.

Good luck.

Thanks aboutready and aifamm. Very illuminating discussion on schools.

Found a link for "grades on public schools".
My school got a "A"... makes me feel better about the public school angle.

http://www.nydailynews.com/features/schoolgrades/manhattan.html

" I believe in public school, but it didn't seem like the wisest choice for our daughter."

Funny how many people believe in public school for everyone but their kid.

I'm breaking my vow of silence, but only for the school issue. I only didn't do it because it is SO difficult to get a middle school spot. Also, the public schools recently, the very good ones, have become fairly to very overcrowded. If you had read all my posts, or even a portion of them, you would have known this.

Yorick, if you had a kid, like i did, who scored in the 99.5% in her erbs, would you think that an overcrowded school that may or may not have had art, pe, music, etc (or may have one one semester out of two, or one year after another, for any of these) would have been better than the EIGHT private schools that accepted her?

I was wrong, it was six, not eight schools, that accepted her. Two wait-listed.

I have read all your posts, and I am quite familiar with the school situation in NYC. I have two school-aged kids.

Your assertion in another thread that rich people don't want their kids in public school is just wrong. Some of us practice our politics, and don't leave it to others to do so. Every time a wealthy person buys their way out of a broken public system, all they are doing is ensuring that the system stays broken. I -- and several other parents at the public school my kids attend -- believe that the system needs fixing, and it can't be done from the outside looking in.

Since my kids are privileged enough, I don't need to perpetuate the message that they are special to the point that they deserve an education that the kid down the street can't afford. They are, of course, the most special people in the world to me, and rest-assured they know that, but that does not mean that I need to suggest that they are more special than their peers in the world at large.

You know, Yorick, you and I really don't disagree so much. And it will soon not come down to a public v. private issue. It's going to come down to a numbers issue, which will make the middle school issue even worse. There simply won't be enough spots, private or public, and THAT's my point. Going forward.

Yorick, most people who spend MILLIONS for their two bedroom apartments DON't want there kids in public school. If you have found one than works for you, good. And middle scool can and will be a potential nigthtmare.

aboutready, for someone who's vowed to keep quiet on these boards, you're sure doing a lousy job.

I think we disagree more than you know. For one, I'm not sure where you get your data. Do you go around polling the parents in public school to ask how much they paid for their apartments, and what their schooling options were when they chose public school? Every day I talk to parents who pulled their kids from Dalton, Friends, etc., and not because they couldn't afford the tuition.

For another, I don't think we agree on what 'better' means. Were my kids getting a better academic education at their $22k/yr private school? Absolutely. But they were also learning that they are entitled to even more advantage than they already enjoy simply because their parents have money. Clearly, I think the overcrowded public school (my oldest went from a class of 15 to a class of 28) is the better choice because it's consistent with my values. I'd walk in front of a train for my kids, but I don't think sacrificing my integrity for them does either of us any favors. And if they grow up to be overprivileged adults, I won't feel like I laid too much of the groundwork for that. (Not that I'm not guilty of plenty of hypocrisy here, btw. It's easy to talk about choosing public school when one gets to choose *which* public school. I wouldn't have been so quick to pull my kids out of private school if the alternative were a school in the South Bronx.)

I just find it curious that you spend an awful lot of time bemoaning the evisceration of NYC's upper middle class at the hands of the wealthy, but you don't seem to recognize that you're engaging in the same elitist behavior.

So let's say my child goes to an "A" graded school, but performs I dunno in the bottom half of her class. Do I apply to all middle schools I am interested in? What happens to her if I have no district assigned school and she doesn't get into the schools I want?

aboutready - as you know I have read many of your posts as well. I offer my sincerest congratulations to your daughter who scored "in the 99.5% on her erb's". SHE will obviously be fine in ANY school. My question is really to you - "with 3 ivy league degrees " in your household, how has that eduacation served you?? You are on this board daily blaming everyone and everything for your inability to afford suitable housing in NYC. Meanwhile you are renting in Peter Cooper and are admittdly unemployed by choice. I will go back to my original post to you - there is something much deeper here that you refuse to acknowledge.

gotta agree with Yorick here.
Our daughter is a 99% ERBer and at that level she will do well in most schools, public or private.
Actually, some of the private schools may not be so good. A lot do not have a strong academic push (try asking the principals about academic excellence) and it seems only schools like Dalton have this. Our daughter would be much better served in somewhere like PS234 which is no longer bursting at the seams with the new Annex, or in one of the gifted and talented public school programs.

How did your daughter do in the Stanford Bennet? Did you consider Hunter? For a gifted child such as your's I would say that that a competitive, rigorous school such as Hunter would be the way to go.

Sorry the question about Stanford Bennet was for aboutready.

Just wanted to say that I'm amazed this thread started out as flamebait with the usual "bitter renters" and "brokers" pointlessly arguing about whether bonuses would affect prices; yet somehow it managed to turn into a moderatly useful discussion about public vs private schools. I'm impressed! There's hope for this board yet!