Buy, or wait ...

Ani703, if you "buy a 1-bed in Harlem (below 125th)", do you consider it an upgrade in quality of life or do you see it as more of an investment?

Sunday, thanks for your response. It would be mostly an investment. Right now I live in a luxury 1BR in the 80's on Bway, which I share with my girlfriend (who contributes a third of the rent). I'd prefer to live in one of the newish doorman buildings in Harlem, but since I'd be leaving my preferred neighborhood (UWS), and moving north, I'd be giving up location (but hopefully still getting similar building/apartment quality).

In that case, I would wait if I were you, unless I really believe prices would shoot up in the next two years and I would miss the deal of a life time if I don't buy now...

How does your gf feel about it btw?

Err - ani, run the #s. As an investment, it makes no sense unless you believe that Harlem is on an up, up and away trajectory. I had a feeling about Fort Greene & Boerum Hill in the late 90s, but Harlem, nah.

She's for it, and she likes the area. But you make a good point. Thanks for your advice Sunday.

Btw, besides prices probably not shooting skyward, are there other reasons you think it makes sense to wait.

Isn't such a purchase about the #s - you just said it was an investment.

If you're asking about "lifestyle" issues, ask someone who moved from UWS to Harlem.

In downtrends, fringe neighborhoods are getting hit the hardest. Harlem being fringe, priced will drop more in the next months. Since that's where you're going, i'd rent there first to see if you like it and if so, may be buy in a couple of years. You'll thank me for that!

Here is the thing Ani. No one knows, least of all the anonymous bloggers on this site. If you really want to protect your life savings, you have to do serious research on the economy. There are very intelligent investors like John Paulson and Jim Rodgers who believe there will be run away inflation, perhaps hyper inflation in the coming years and you should own assets. Paulson would tell you to buy gold and real estate -although perhaps not in a market where there is more downside. Then there are people like a Marc Faber (an extremist really though he has made some very accurate calls on the economy and the markets) who would tell you that there is going to be a very ugly end to the Bernanke printing machine. HIs dire predictions would not bode well for owning RE anywhere in the US. There is a wide spectrum of economists and pundits who believe the US large cap market will fare well in 2011. So the question you should ask yourself is how --in the most unpredictable, volatile markets in history-- are you going to protect your nest egg. You should live on the internet, cultivate a working knowledge of some good, conservative economists, and make your own decision.

That said, my anonymous 2cents is don't buy now. Invest in a very conservative, very diversified, US-centric equity portfolio with a substantial part of it hedged against inflation. No bonds. Be nimble and ready to retreat from the market on a heartbeat. After two years, make a RE decision based on market conditions --considering the investment may be the largest you ever make in your life. I think right now is a good time to rent in NYC -especially if you like your neighborhood. Save your money.

apt23: why would you say US-centric, given the printing machine? I am bashing my head thinking about how to:

1) protect against inflation
2) diversify away from U.S. assets
3) generate a stream of income

Ani703, generally, I would advice buying your primary resident "mostly" for quality of life reasons. Of course you should have the future value of the place in mind as well. The fact that you mentioned 401k and Roth is a great sign. Having $130K in the bank is good and you should be proud of that. However, at today's prices, $130K won't get you much after accounting for emergency fund post closing. It might make more sense to buy 2 years after you're married.

nyc10023
about 1 hour ago
ignore this person
report abuse apt23: why would you say US-centric, given the printing machine? I am bashing my head thinking about how to:

1) protect against inflation
2) diversify away from U.S. assets
3) generate a stream of income

2 - AND TOWARDS WHAT? CHINA? INDIA? CANADA? WESTERN EUROPE? LATIN AMERICA? AFRICA?

NYC23: I am in gold and commodities to hedge against inflation. I am in world agriculture and energy to diversify from US assets but I follow about a dozen economists/pundits/hedgies and the majority are saying large cap US so I figure there will be some momentum there after a pullback. So I will play it for a while but not longterm. As for stream of income -- I too am stymied.

I wish i would have purchased when i was 30......i lived in a rent stabilized apt for years and saved lots of $$$ but would have made a killing in real estate if i purchased earlier. If i were you ..these are the questions i would ask myself: (1) How long do you plan on living in this new apt (2) Would you end up saving money on a monthly basis...i would imagine since you are in a luxury 1 bed on the UWS you are probably paying lots of $$$$.....Harlem has some great renovated condos at really great prices with tax abatements....so you probably would end up saving $$$...the quality of life is important.....would you be happy living there? If you plan on staying more than 5 yrs...i think its worth serious consideration to purchase.......i urchased last year and feel really good about it...

come on. how many other things do you wish you did when you were 30? that is a fairly absurd bar to cite.

>I wish i would have purchased when i was 30

How old are you now / what year was it when you were 30?

>NYC23: I am in gold and commodities to hedge against inflation.

Keep in mind that carrying costs on gold are high, and it violates your #3, generate a stream of income.

Wow, thank you all. Some excellent, excellent feedback and advice here. Sounds like I have a lot of research to do. But this is a great start. Thanks all for your input. Much appreciated.

Mhillqt's 30 was 1991, so a good time to buy. That's when I bought, more from dumb luck rather than from recognizing a bottom.

Ani, you seem to be in a long term relationship that will, hopefully, end up in marriage and children. By purchasing a 1Br, you're putting all your eggs into one basket that may not suit you 3-5 yrs down the road.

I did something similar that you're doing in 2003. Bought at 950 sq ft Jr 4, converted to a 2 br. It did fine for 3 yrs, until our son was born. Then, we started running out of room quickly. I was fortunate to buy in the low of the bull market and sell towards the top.

Here's the bad thing. I purchased a 3 br and was selling my Jr 4. It was stressful to live with a small child, 2 mortgages and a renovation of the new place. The Jr 4 sold in STRESSFUL 8 months. I made my money because of the bubble and my wife said "Never again. Who cares about the money with that much stress."

Kinda scary that you can recognize a listing from a few words & accurately (?) tell when someone was 30. When was I 30?

Mhillqt/chelapt's easy, as we all followed his search and purchase from the beginning. Name leads to birthday, and so on.

You I don't know. I once tried to track from the one building and sale year to another, but it would've been too time-consuming. It also seemed sort of infra dig, knowing you value your anonymity. (Not that that always stops me....)

NWT: you scare me.

Shit, nyc10023, half the reason I don't buy is to stay off the grid lest NWT track me down.

Ani 703 I am in the same situation as you. I have lived on the uws for 10 years . I decided to buy a two bedrooms in Harlem. It made sene to me because between the mortgage/ccs, and real estate taxes, it will cost me half of my current rent. I am a very conservative person in terms of my money. I don't think you can go wrong if you buy below 125 th in the FDB corridor. I work in the section of Harlem for the past year. It has a lot of charm and amenities. There is a possibility that the prices could come down further. However,I think that you curretnly have a choice of units in the current new doorman buildings. If you wait you may have a better price but you will have the left over that ususally don't sell as well( bas exposure; weird division in units..etc...) . Go walk around Frederick Douglass between 110th and 125th. Got to Best Yet market at 119th street. I know that you may feel it is not the UWS. I feel that walking on the browstones lanes is very quaint and less impersonal than the repetitive highrises of the UWS. Remember as well that interest rates are at their historic low. The uws won't become cheaper in 2/ 3 years. West of FDB , you are very close the Mornignsie Park which is very charming and walking distance to Columbia.There are different type sof Harlem.

Once we stop getting snowstorms every few days the traditional spring buyers will come out. And the sellers who have been waiting for prices to firm up will put their apartments up for sale. In the meantime prices are soft and inventory is low. So if you can find an apartment that works for you the best time to buy is right now, Interest rates are going up and that can have a much larger affect than an increase in purchase price. I know of area in Manhattan where s good deal can be had but in a few years the neighborhood will be transformed and property values will probably increase tremendously. Contact me if interested.

>best time to buy is right now,

... or be priced out forever?

RKravath -- Thanks. I always thought economic, social and demographic forces drove the RE market. Now I know it is just the weather! That's a relief.

Thats what the British say...(;

rkravath: Or maybe you should tell your sellers that this is the best time to sell since we are in the midst of a reversion to the mean which will take prices down to 2002/03 levels. You could show them the slow deterioration in the comp threads on this site. However, since the Fed has temporarily created a false prosperity in the stock markets there are fools willing to part with their money right now. Since the S&P is stretched beyond it's 200 day moving average more than any other time in the last 10 years, there may well be another correction to the mean quite soon in the market. So really a small window to get rid of overpriced apartments.

That way you can actually help someone make some money rather than cause uninformed buyers to lose their life savings. It is a more productive argument so you don't mislead buyers into thinking that they are going to make money on their investment when virtually every economist on the planet has called for flat RE prices for the foreseeable future. You might actually be able to live with yourself.

apt23: You say: "Or maybe you should tell your sellers that this is the best time to sell since we are in the midst of a reversion to the mean which will take prices down to 2002/03 levels."

I am about to sell my place and am wavering between buying again or renting for a bit. I've been tracking prices and it seems that closes in my price range are coming in at about 2005 levels. What's your sense of timeframe on prices hitting 02/03 levels?

http://streeteasy.com/nyc/sale/537473-coop-55-west-16th-street-chelsea-new-york?email=true

Short sale.... $681psf

ummmmm....... que paso, eso manhattano mucho rico suavico? no?

maricon... flmaoz

No stopo till 1999.... express.. yeah baby.

>apt23: You say: "Or maybe you should tell your sellers that this is the best time to sell since we are in the midst of a reversion to the mean which will take prices down to 2002/03 levels."

These moronic theories about reversion to the mean. If reversion to the mean made any sense, why would there ever be a difference from the mean?

Hell, if you believe that interest rates are inversely related to real estate prices, how does this reversion to the mean actually work?

>You might actually be able to live with yourself.

Amazing.