WSJ Article - DOWN!

Here is the article.

http://online.wsj.com/public/article/SB119638554201808816.html

Now mazdamp, don't you think FALLING! would be an over statement? Your not one of those "the world is ending" sort of folks are you?

I think the article did point out that co-op boards had been vigilant in keeping out buyers with shaky finances (and all kinds of other people too).

at this point, people are waiting to see what the bonuses bring.

pass the brewskie

"45 Park Ave., in the Murray Hill neighborhood, is offering a one-year membership to the Morgan Library and Museum."

WOWZERS. Hold me back. *BARFS*

Yes, please... PASS ME THE BREWSKIE!!!! right spunkster?

but of course, everything is good in wall street, manhattan prices will never go down, and yes, those in denial crowd this board which makes it oh so entertaining!

oh, and don't forget the punchline of this board..

but.. but. .. but.. the foreigners will keep manhattan up!

LOL. seriously, talk about grasping at straws for hope. hope u folks realize that foreigners are starting to get scared in their own home... like in london where residential real estate prices is... guess what? going down now- officially.

so yes, these foreigners will come swooping in to buy real estate in manhattan where a massive shietstorm is brewing in wall st. of course- makes perfect sense. this is the stuff that makes this board so friggin entertaining!!! blind leading the blind.

I'll have another Brewskie as well. I have an offer on a condo in the village that I hope to use for an investment. It will be a great rental for NYU students or a professional that wants to live in the village. I hope the seller accepts my offer but we'll see. I find December a great time to buy that's when most people are out shopping, vacationing and planning for the holidays.

Wow. MMAfia got through an entire post without mentioning the credit crisis. That is worth a brewskie.

so i waited 10 years to buy an apt in nyc and still in my rented(low rent) apt in murray hill off park ave.......i missed great opportunities over the last 10 years that would have made me up to 1 million dollars on apts that i passed up......so, should i continue to wait now since i waited this long? I live in a studio and at 46 am ready to live in a 1 bedroom.....

If you find something you like at a price you are willing to pay, you should buy and enjoy intangible and emotional satisfaction.
For tangible benefits, tax deductions for interest and a percent of maintenance or the taxes if the one you choose is a condo.
If you retire twenty years from now, that means you can enjoy up to two full real estate cycles and get some equity through payments and appreciation so you may retire elsewhere if you desire. If you'd like to stay in NYC after you retire, you'll probably be living in a nice place that you couldn't afford to buy on your retirement income.
Some times I feel like the oldest living Streeteasy addict. Stop reading now if you don't like the ramblings of the old and feeble - I'm 62. I remember when condo/coop prices dropped so precipitously that corporate folk eschewed buying and did rentals so they could move on to the next job in the next location without having to make up the difference between the mortgage balance and the sales price.
I have friends who bought in old days for $107,000 on Madison in midtown and next week their condo was worth $80,000. I have friends who bought great houses in desirable suburbs where the seller had to write a check at closing to pay the shortfall on what they owed to the mortgage company versus the selling price of the house.
What makes the cycle less predictable these days is the looming terrorist threat that might secrete that dirty bomb right in the neighborhood you just bought in. Or the great involvement of the Federal Reserve in propping up the economy with lower interest rates.
I'm in Palm Beach tonight in a condo I own with a corrupt board of directors that's sucking me dry that I've been trying to sell for two years. But it's big and on the water and twelve friends came for dinner and watched the boats go by decorated for Christmas.
On Tuesday I'll be back in NYC in a high rent one bedroom because I can't afford to buy at NYC prices.
Should you continue to wait? Only until you find the one bedroom that you like well enough to move you off center. Then enjoy what you owe to yourself and time will take care of the rest.

Well done Cliff702 well done. I do like that old school rational because it still makes sense today. Bravo

spunky's dad? pass the 40oz.

Credit crunch ready to eclipse the peak of problems during the summer Juiceman.

http://www.econbrowser.com/archives/2007/11/libor_dec_07.png

Oh yes, it's getting worse people. Much worse. And now, unlike in August, the Fed is actually beginning to realize just how bad it is... they are scared. Very scared. Why? They realize that rate cuts is not going to fix the problem (cutting rates won't restore confidence in Banks to start lending to each other again).

Remember, it's the LIBOR that matters here, not the Fed Funds or Discount Rate. The market has advanced in complexities where the LIBOR is the key determinant now for over 90% of credit facilitation.

Now pass the 40.

Yes. The summer now. Got it. Wasn't it October? Then December? Then after "Santa Claus arrives"? Now it is the summer. Ok. Right. The summer. You sure now? The summer. Right. Got it.

MMAfia-lol -you are a funny man

I don't see MMafia commenting on the coming summer. He's referring to the credit crunch that took hold this previous summer (though his link does chart troubles ahead).

Here's an interesting Times article:

http://www.nytimes.com/2007/12/02/realestate/02cov.html?_r=2&pagewanted=1&oref=slogin

From Doug Heddings of truegotham.com:
"Mr. Heddings said...three of his five Wall Street clients stopped searching for apartments that cost $2.5 million to $4 million because they believe prices will drop in 2008."

"Some buyers have reason to be cautious. Shai Shustik, president of Manhattan Residential, a brokerage with many clients in the financial industry, said that since the end of August, his buyers had cut their budgets by 10 percent because of concerns about their bonuses. One lost his job at a hedge fund hours before he was due to sign a contract for a $1 million two-bedroom co-op on the Upper East Side.

“He was literally ready to meet the attorney that afternoon to return the checks,” Mr. Shustik said. “But he never did. He got laid off that morning.”

Jason Loeb, 37, an equity analyst for a money management firm, has received a half-dozen e-mail messages from friends who have lost jobs because of downsizing at major banks. Those “I hope I land on my feet” notes, coupled with weak performance in industries he tracks like trucking and retail, convinced him that Manhattan real estate prices eventually have to decline."

"Mr. Loeb’s lawyer, Adam Leitman Bailey, said he had received at least one call a day from Wall Street workers with annual incomes of $600,000 to $5 million saying they think prices may drop next year. Nearly all of them have decided to hold off on buying Manhattan apartments.

“They’re not going to buy until they have job safety or the salary or bonus they think they deserve,” Mr. Bailey said."

Some sellers can wait. Those with growing families, relocation needs, and resetting ARMs they can't meet (like the folks who are part of the 25% increase in condo maintenance defaults and resultant liens) can't.

thanks cliff...you are the only one that gave me advice...everyone else just basically comes to this board to bash each other...

Actually Mhillqt, I think cliff702 gave such great advice it was difficult to add anything to the conversation. He really is spot on. You have a long term view, so I wouldn't hesitate to find something you like and buy. Rates are still great, you have a realistic view of the market, and you know what you want. There will always be a reason to talk yourself out of it, but once you take the plunge, you will feel great. Good luck.

just a bit hard since im looking at an apt that i passed up 10 years ago and it was 120k then and now 56ok......sucks...

Real Estate investing is long term, right? Let's define long term as a minimum of 1 year, but in reality, we're talking at least 2 - 10 years. Are people really afraid of NYC going down within this time frame? Aren't you really just setting yourself up for more regret, or do you need to wait for the market to really heat up, so that you can gain that confidence you needed to get IN, but by then, by definition, it is too late!

Thus the cycle, if you think prices are too high now, sit on the sidelines, but run the risk. Why not dive in now, the market may go down even 10 20% (highly unlikely), yet you're invested, and can most certainly see much appreciation for years to come? The real topic should be WHERE in NYC to invest, not when - or inside or outside NYC proximity (of course bias towards IN).

airahcaz.....let's run your numbers....you bot a 2mm apartment in NYC and put 500k down.....it goes down 20%....you are now in the hole 400k on your 500k of 'equity' (that's down 80% if you are keeping track). But that's not the best part, the best part is that you're down much more than that becuase when you want to sell your depreciating asset you have to pay a broker 6% and you're effectively 'losing' 4% a year (tax adjusted to take out mortgage interest deduction) on your 500k downpayment. On a rent vs. buy calculation Manhattan is overpriced by 40%. L.A. is overpriced by 50%. Actually, if you simply roll back the clock to 2004-2005 on a affordability index you get the same results. Yeah, mabye over 10 years it works itself out but you are buying such an overpriced asset with so much leverage you better pray that some dumb ass doesn't blow himself up in Grand Central and all those foreigners decide to stay away for a bit.......do yourself a favor and rent, you have zero worries about this market going up on you over the next 3 years and it offers you much more flexibility if some thing nobody wants to talk about happens.

PLUS.....im 46 and have some personal issues and was hoping to retire in my early 50s....if I have a huge mortgage payment, that wont happen...im hoping that the market goes down so that my mortgage payment is more doable for someone who is not working......

airahcaz, you are absolutely right. Real estate is a long term strategy, but trying to convince day traders like jnetter is a waste of time. He is hoping for a 20% price correction and will still be waiting to buy in 2015. By then he will have flushed $750k in rent down the shitter and will be still be posting about how the next 5 years will be disastrous for NYC real estate. jnetter, you are a fool to think $2M apartments will lose 20% in value, but you can dream.

Oh, and on your rent vs. buy crap. Ignore it. 4-5% appreciation a year eliminates all worry. I'll take that bet. Also, your favorite 4% loss a year statistic? Based on your logic and fuzzy numbers above, I'm sure you are making much less than 4% on your "cash stock pile" that you call investments. So we'll ignore that as well.

There are many good reasons to rent, jnetter just doesn't know any of them.

if real estate is a long term strategy why are you on this board?? The average homeownership length in the entire U.S. is only six years, how the hell is that long term??? It's gotta much shorter than that in NYC....Ahhhhhhhh....the magical 4% you are losing.....well, quite simply, you can buy 10yr AAA muni's at 5% now (thanks to all the dumb ass people that bot houses in the last three years which has now restricted lending to pretty much everyone else....if you want the data on that go to the FDIC website)....so you are effectively 'losing' that amount on your downpayment until you sell your real estate....I won't even talk about the time value of the money....anyway, I'm giving you a 1% rebate on the mtge deduction (although that's really a hoax when you factor in the maintence and the real estate taxes)...so I hardly think 4% is a stretch when thinking about opportunity cost of capital when making a real estate decision....oh, BTW, did you sell me those Tech stocks in 2000 that were a trading at 78 PE's but were a 'long term investment'?? Everything is a trade, it's just your time frame, and the NYC trade is already over....you just don't know it yet.....

"Why not dive in now, the market may go down even 10 20% (highly unlikely), yet you're invested, and can most certainly see much appreciation for years to come?"

Simple: because at 10-20% down, I can buy much more apartment for the same money to stay in for the avg. of 6 yrs that people in this country stay in a house for. Why would I buy now, when the risk of prices going down is much greater than it going up?

This is the same stupid mentality that caused this mess that we're in. Real estate never goes down and only goes up! Buy now or miss the train and be priced out forever! Leverage yourself to death! Go go go!

Thanks but no thanks.

Bottom line: risk of prices going down much greater than risk of prices going up. Game over.

jnetter & MMAfia, so you think prices are going down. Ok fine. At what point would you feel comfortable buying? 5% correction? 10%? 20%? If prices go down, how do you know you will have the balls to buy in a down market? It is easy to say that you think prices are going down, but would either of you eternal pessimists ever think there is an upside to NYC real estate? I would bet no.

I think, what everyone needs to understand, is that markets, are driven by two basic human emotions: greed and fear, and in all cases, with all markets, prices swing to far and become overdone in both directions (too high/too low). No market is immune to this. No exceptions. Not New York, not Moscow, not London, not Gold, Oil, or anything else you can think of. You will be much better off, especially as a first time buyer, waiting and getting in on the ground floor (no pun intended) at cheaper prices. Just my humble opinion.

And get this- at the top, there is always a small choir (of brokers) out there saying "it doesn't matter, you can't get hurt, even if it corrects a little." ...and they say nobody rings a bell at the top.

Pops you're right and based on the majority of posts we are now in the emotion of fear. Most feel the Manhattan market will go down. Most have felt this way for the past 7 years. It's when the majority of people start believing the Manhattan RE market will go up that's when I may get concern. Right now everyone and their grandmother is waiting for a major price correction and they are waiting on the sidelines for cheaper prices.
I say keep waiting keep renting and holding off and one of these days or months or years your wishes will come true.

I met with my broker last night and told him about my concerns...and he told me not to listen to the newspapers and to buy now or i will be priced out in the next few years.......sounds like a broker, right....this advice was good in the last 10 years but since i waited this long, not sure if its so solid anymore...

"and he told me not to listen to the newspapers and to buy now or i will be priced out in the next few years"

and I tell you not to listen to that broker because he/she is perpetuating the same lies that got this country into this real estate mess that we're in.

look around you. the entire nation is reeling, with a housing-induced recession lingering right around the corner. really- do you think that Manhattan will not be affected?

WAIT! but... but... the foreigners will buy Manhattan apartments!!!

Please let me know where I can get a 80% leveraged loan to buy municipal bonds. That is when I will sell my apartment, dump my 6% mortgage loan, and rent for the next 6 years and eliminate all risk.

Money is still cheap, and as long as the banks will lend $millions to relatively normal joes like me, it's the only way for most people in NYC to ever amass any real wealth.

"Leverage is like alcohol - it makes good times better, bad times worse" - my finance professor at B school, who I respect very much

Mhillqt, don't listen to your broker. Make your own decisions based upon your financial situation, your timeframe, and your personal situation. If you feel like you could lose your job, than renting would be the best bet. If you feel like you will be stably employed and in want to be in the city for the next 5+ years, I would consider buying. The timing is up to you and at some point you need to make a bet, but the reality is, is not as big a bet as some of the people on this board are saying it is.

MMAfia, you still haven't answered the question. At would what level of correction would you buy?

If I could just add to what Juiceman had stated I feel that psychologically you have to feel comfortable to make this change. I am not sure that purchasing would be a good fit for you based on the fact that for 10 years you haven't moved forward for some reason or another. Some people feel unsecured with changes and you may in fact be one of them. If purchasing an apt is going to create an anxiety attack then it not worth it.Not saying this is a god thing or bad thing. It is what it is.

Isn't this debate quite simple? Avg Condo price is 1 MM or so today, someone can get more specific. This post will be time stamped. Let's check back month by month and see who has any regret.

Also, as of this posting, I have bought a new 2/2 in midtown for 1 MM or so. I'm betting I won't lose.

Isn't this board supposed to be for helping each other? Having said that, my opinion is firmly that NYC is indeed unique, and if and when the rest of the country recovers, NYC will continually outperform - thus if we recover, NYC will see even more appreciation. Plus the fact I will highly enjoy living in my 2/2 in NYC as a home owner! That cannot be debated.

"MMAfia, you still haven't answered the question. At would what level of correction would you buy?"

Whatever the correction level is at the time the yield-curve is not inverted anymore and the TED spread goes back to 50.

In other words, when the credit markets revert back to equilibrium after flushing out excess liquidity that we have ramped up since the Dot Bust. What that is in terms of the exact amount of Manhattan price decreases is, I don't know.

Mafia,
this is going in circles.

- Downside risk is buying now - acknowledged (but opinionated).
- Upside risk in NOT buying now, and NYC appreciates more from today.

Clearly it is up to the person's risk tolerance. If it goes down, great, better buying point. If it goes up, then what do you do, still wait? Wait for how long? Or not buy at all then? If willing to let it go up and buy higher, or not buy at all, then simply don't buy, no one is arguing that.

Furthermore, we buyers are willing to take on a say 10% downside risk in order to be in now, and be invested to the upside. We are betting that 10+ percentage on the downside is not what we can realistically foresee, naive or not, it is a belief in the unique attributes of NYC, which are numerous and various.

airahaz agreed I have an offer on a GV village apt that I am purchasing as an investment property. My investment horizon is 20 years minimum and I know there will be flucuations over this period of time.I am not smart enough to predict with 100% accuracy whether or not my investment will go down or up 6 months to a year after I purchase it.

I say, if it goes up in 2008, WAIT NO LONGER...time to jump in..if it starts going down in 2008, then waiting is not a bad idea.....I made a low ball bid on the apt and explained my situation...ie would rather wait then pay premium price......so, i have nothing to lose if its not accepted BUT everything to gain if it is...either way, i feel comfortable with my current plan.....AND i was a FOOL not to buy in 1996 and in 2001 BUT thats what happens to people with CHEAP rentals in NYC>.....but IM 46 and its time to get out of living in a studio and into a proper 1 bedroom.....AND I do have anxiety attacks!!!:)

national vs local housing market
http://matrix.millersamuel.com/?p=1368

A brewskie each for three recent buyers with well thought out, intelligent strategies. Bravo. Good luck to you.

Well of course the recent buyers will be saying what they are saying. Why on earth would they ever say the opposite?

Fannie Mae sounding desperate tonight. First Freddie with the bomb a couple of weeks ago. Now Fannie. These are supposed to be the guarantors of mortgage loans backed by the government. And they're scrambling for cash. Perhaps we have entered the second inning now. Perhaps.

Isn't it hilarious that people are so willing to accept gyrations in the stock markets but for some reason think that Manhattan real estate cannot possibly gyrate?? Very, Very simply, I do not think that is a stretch to roll the affordability index (that is, personal income divided by housing cost) back a couple of years for Manhattan....if you do that prices need to drop 40%....that ain't happening, but this is the most overvalued asset on the planet....please, somebody tell me another asset that is this over valued???

If it's so overvalued, why are you here waiting for a buying opportunity? Clearly there's still demand if there are so many people on the sidelines.

jnetter 10 years ago most felt like you and that is Manhattan RE is a very overvalued asset. Today most people feel it's a most overvalued asset as well. 10 years from now guess what? Most will feel that Manhattan RE is an overvalued asset.

IM not sure thats true spunky...10 years ago, the increases we saw subsequent to 1996 had never happened in the history of real estate.......ie 5 to 8x increases in pricing of apts in nyc.......so, if this most recent history(last 10 years) repeats itself, then real estate pricing has definitely changed its course......

actually, spunky, on a affordability index only the last two years have been wildly over optimistic in the Manhattan market......demad comes and goes and in the end it's all predicated on value. I sat in on a real estate panel yesterday...guess what, everyone of these public and private REITS wanted to build in two places...Manhattan and L.A....you know why?? It hasn't gone down yet....supply will continue to be built until the last over leveraged dope is long some shitty apartment for 1500 bucks a sq foot. And even they were much less optimistic about rent growth over the next three years (so the rent vs. buy equation will get even MORE out of whack)....please, spunky and aifamm, show me some data that allows me to dive into this market right now with a 5 year outlook?? If 5 years is too short then you've already answered my question...

Very well said jnetter.

>> supply will continue to be built until the last over leveraged dope is long some shitty apartment for 1500 bucks a sq foot.

You are contradicting yourself. First, if supply is to be built until all of us here owns, then there is still appreciation left in the next few years. Second, at 1500 $psf for a crappy apt, then there is also a lot of room for more appreciation left.

You keep stating value. How about a quote from Buffet:
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

agreed with jnetter

jnetter.....are you saying you wont buy for 5 years OR are you currently an owner in nyc?

How about the interest rate side of the equation? Jumbo mortgages have gone up by nearly 1% (5.5% to 6.5%) over the last year. This is an approximately 20% jump in interest payments. Apt prices would have to come down ~20% if affordability is the same.

Any thoughts?

Jumbo's have dropped drastically since August... at least for my credit. 10/1 IO ARM and it dropped over 1.5% over the past few months. I think 30 yr fixed have dropped .5 to .75 in the same time period.

And rates will drop further this year. What about when rates were double digits in the 80s, and people who bought still saw significant NYC appreciation? I think the variables being brought into this discussion aren't a basis for buy vs not buy.

As someone who is looking to buy for the first time, I'm not waiting for the market to go down (though if it does, lucky for me). What I am waiting for is to find an apartment that I really like in my price range. Right now, the apartments that I like are about 10% more expensive than I can realistically afford. I will wait to buy until either (a) the market comes down so that apartments I like are in my price range or (b) I save enough money so that I can raise my price range.

If market appreciation outpaces my savings, unlucky for me, and I won't be buying in the foreseeable future. That's a risk that I'm willing to take though. I'm not timing the market - I just don't want to leverage myself up to my eyeballs and quadruple my monthly housing costs just to buy a place that's only fine. I having a feeling that many buyers share my outlook.

Mhillqt, I was in a similar situation to yours several years ago. I was in a (relatively) inexpensive rent-stabilized studio. Taking the long term view, and knowing I wanted to stay in NYC for many years to come, I realized that with 3-6% increases in rent over the years, eventually it would be too expensive for me to continue renting even a rent stabilized place. So, I bought a nice one bedroom in Queens (don't hold your nose, LOL!) and am very happy I did so. I'm prepared to weather the ups and downs of the market and if I decide to move once I retire (unlike you, I anticipate needing to work until my late 60's - I'm now 52) I can sell at a hopefully decent profit, or should I decide to stay in my apartment after retirement I will be able to afford to, as my mortgage will be paid off (I took a 20 year loan). In the meantime, I have the benefit of tax breaks, and a stable place to live. Also, I question how much longer rent stabilization will stay around, it's been seriously gutted since 1996 when the laws changed. Like you, I am also kicking myself for not buying in the late 90's, but you can't look back too much. If you find a place you like that you can reasonably afford, especially if you think you'll be in the NYC area for at least five years, go ahead and do it. Good luck with your decision.

thanks landrum8.......yes, 1996...what a year to buy.....i had a signed contract on a prewar 1 bed condo in 39th and park for 175k and i backed out....came back a few months later.....they accepted my offer again and then they backed out! Turned me off to real estate for 10 years!!! What a dope I was.....
At 46, if i take a 30 year mortgage i will probably die before i pay it off.....if i purchased 10 years ago, i would have been sitting with no mortgage and able to retire earlier.....i enjoy work but due to health issues, i prob wont be working past my 50s.......
So, i was counting on getting a 1 bed for 400k but unless the market collapses, its not going to happen....

MMfacia....im curious, do you currently own or rent? Also, at what point do you feel comfortable with pricing in nyc....ie 1 bedroom coop @ 300k vs todays 600k?

Mhillqt,
Much as I used to agonize about not buying yahoo when it went public, I realized they all revert to the mean. Bear in mind the next decade may or may not be like the last one. Regardless of whether NY RE crashes or not, there is also a chance it might go sideways for a long time.

waiting for the 20% haircut :-)

eric I agree and this is what can happen to Manhattan RE over the next 10 years. It can go up, It can go down or it can remain flat. I am not smart enough to know exactly whats going to happen all I know is that I enjoy owning Manhattan RE and I continue to look for investment properties to buy in Manhattan.

No one knows what will happen with Manhattan RE in the next few years. The previous 10 years have been a real fluke due to the low interest rates. As far as buying a primary residence goes, if you can afford the mortgage/maintenance payments and you intend to stick around for a number of years, it's still usually better than renting. And, speaking for the long term, even if you are fortunate to have a decent deal on a rent stabilized place, I have my doubts as to how long rent stabilization will last. Since the change in RS laws in 1996 (when someone moves out the landlord can raise the rent much higher than was previously allowed), many RS apartments have been removed from the system, and the voter base to support it may not be around much longer.

can they really destabilize all rent stabilized apts whenever they want - ie nyc govt...etc..at this point, having a good rent stabilized deal is probably better than buying.....even if you are in for the llong haul and prices drop, you still have to pay a much higher mortgage for 30 years with these inflated prices......

Spunky,

If your point is that you prefer paying $6K monthly mortgage (after tax benefits), rather than $4K monthly rent, for an apartment that might or might not appreciate for the next decade, due to the notional benefit of being a home-owner, I have no argument with you. That's the price you put on the notional value.

I am "sort of" in the market to buy - but only if I can find an apartment where I would pay as much to buy it as I would to rent it, given I am pricing in little to no appreciation before I sell it. If buying costs as much as renting, I would rather buy because I get to paint the wall any color I want.

Eric

Eric

Eric that of course will be dependent on your down payment. I agree though owning an apt give you the freedom to chose how you want to decorate the apt and allows you wife or girlfriend to "feather her nest" and that in itself is priceless that brings rewards that I don't need to elaborate on.

Spunky,

Down payment money is not free. There are opportunity costs (e.g., investing in equities that have given me 17% YTD). Point taken on the painting walls and feathering nest. Clearly, you and I diverge on the amount of premium we are willing to pay for that privilege.

eric if you can get 17% a year then put all your money in that investment. I'm not smart enough to make 17% year over year in equities.

eric, I'll give you my money, too. What do you like here?

Much like gambling, you only hear when people are "up". If all these self proclaiming opportunity cost super traders were so good at it, they would all own already.

What I made this year on my portfolio is not relevant - the point I am trying to make is that downpayment money is not free - it has some opportunity costs, ranging from 5% (fairly risk free CDs), through mutual funds, all the way to much higher rates if you own your own business.

Dmag2020: I moved all my money in equities outside the US - just the dollar depreciation is worth about 10 - 12% - so it's not that surprising I made 17% - though I must point out, I have been able to get 8 - 14% a year in the markets in most years.

Again, if spunky is willing to pay more for the right to paint walls and for his girlfriend/wife to start building a nest (very important psychological effects, no doubt), more power to him. I'm not there yet, and do not plan to buy unless I can see the numbers work out.

Where did I say that I would pay more for that right. All I talked about were some of the benefits of ownership. If you can't afford a place right now don't buy.

Hey, I know this is stale, but I've been out awhile.

Spunky, what do you consider affordable? Let's talk in terms of percentage of take home, and discuss down payments.

After spending some time away from this forum, I realized that part of my problem generally was that I wanted 1400 sq f, preferably 1600. This is a very different market than many who are posting and want 1 bedrooms or small two bedrooms to accomodate a baby.

If people like me can't afford a two bedroom with a dining space I'm afraid you're going to lose a lot of people to the burbs in this market (although not me, I don't have a driver's license). (Stop Spunky, I'm not finished). And since many people can't afford $65,000 per year for two private school spots, and some public school zones seem about to be redrawn (nasty, nasty, nasty, but probably true), I don't know who is going to be buying all those 1.3-2.0 million 2 bedrooms that are on the market and about to come onto the market.

aboutready - glad you are back. You continue to add a much needed common sense to the affordability issues that we face in Manhattan. Even people with excellent incomes face these same issues of finding an apartment with a reasonable amount of space for 1.25-1.5M.

aboutready I know this may come as a shock to you but there are plenty of wealthy people in this world. Probably well beyond your beliefs. It's sad but true. Look what happening in the Hamptons. A million dollar rental for the summer is going to be very common is a short period of time. If you can't afford to live in the city than yes the burbs is an option.
Granted your children are important but guess what you are even more important and maybe you should consider sending them to public school if it's going take a major burden off your shoulders.I'd rather have a happy Mommy then one that's all stressed out. There are plenty of children surviving and flourishing in the public school system.

Spunky, enough with the personal comments. My stress levels are my own, and they have some relationship to income but generally they are just a factor of mommyhood. I may not be happy in my current situation, vis a vis perceived potential, but we are hardly living in a basement with no heat. By the way, most post-elementary school public options in the city suck.

My comments generally have to do with the market. By the by, spunkmeister, my ex-boyfriend was an md in one the top five ibs. I had a remarkable standard of living overseas years ago.

Please lose the f'ing arrogance about money. Plenty of us know just how much money is out there. I'm only pissed off because I know how so much of it was made (recently).

aboutready everything you said is correct. In fact everything you state in the future you are correct as well. No need to ask for opinions because you are correct so I will agree with you.
I do sincerely wish you the best and I hope all works out for you.

Pez, I hadn't noticed your comment. Thanks. I think things will get a bit better this year in that 1.2-1.5M range. Let's hope.

spunky i have established one thing from reading your comments (truthfully i try and scroll over them) that if you know shit about investing then you probably belong in real estate. you truthfully detract value from this site. i am thankful that there are people on this site with some common sense and willing to share insights (urbandigs and others). people like you are as bad as the cheating fee hungry banks and bankers who got us into this mess. i donot appreciate the doom and gloom but equally it is useful to want people to be realistic and aware of what they are getting into especially in this environment.

i am considering buying property in the city this year but dude you have convinced me that if i am standing in the same corner as you i will somehow feel like such a dumbass. man get another hobby. i am not saying stop posting but try and add some value somewhere or at least diversify your dumbass comments on other sites too. some of us find this site useful and appreciated insightful comments but these constant aimless retorts just add no value and keep away the people who can actually add value.

It is ridiculous to talk to spunky about affordability. He knows nothing of it, as he was handed his inheritance. However, he is correct in that there is a tremendous amount of wealth out there in the world standing by to purchase. The factor that most perpetual bulls in the real estate market do not comprehend is that there are two kinds of money. Smart money and Stupid money. The smart money will participate along with the stupid money until a certain point. After that point, the smart money will withdraw, and the stupid money will continue to drive the market higher. This is where we are right now. Because it is "stupid" money, there is no logic in the world that can tell us how much higher it can go. No economic indicators. No recession, nothing. Theoretically, apartments can sell for $14,000/ft, and spunky and others will keep saying "see, you were wrong." And he will be right at that point. However, the only guarantee that does exist, and will continue to exist for eternity, is that, and I (hate to) quote Jimmy Cliff: "the harder they come, the harder they fall." There is no doubt that RE prices will correct, not only to a sane level, but to levels far below that. The reason for this is very simple. Eventually the "stupid money" will exhaust itself, and the smart money will step aside, recognizing that not only is the asset fairly valued at a certain point, but that the fear in the market is such that it will become more unfairly UNDERvalued, the same way that it became unfairly over valued in the bull cycle. That's why it is called a market, and that is why it is called "the smart money."
No market has ever deviated from this cycle. I beg anyone (read: spunky) to challenge this. It can't happen. I am sorry to disappoint anyone, but history repeats itself. The one thing we know is that it is better to be early than late. Because markets unravel MUCH more quickly than they take to build up, and in an illiquid market like real estate, it happens in the blink of an eye. It is important to understand that THIS IS NOT A DOOMSDAY SCENARIO. This WILL happen, because it does in every market that has ever existed. I have witnessed losses of epic proportions in gold and energy. The only reason you don't see it as much in equity is because of leverage is limited to 2 to 1, vs. the futures market which is generally 10 to 1. The real estate market is a 10 to 1 leveraged market, with low cost of capital, that has grown to epic proportions. And no matter how cheap the cost of capital (which is what got us to this level of insanity) gets, it will never make sense.) Period. The same way the government can't support a weak dollar, they can't support this RE market. One way or another, it is coming down.
BUt, if you are long term, buy buy buy. Right now. Cause the pain will go away in 10 years.

aboutready, where do you get your info that public school zones are about to be redrawn?

It's not a done deal, not even in the slightest. There has been talk of it on, I believe, the UWS, maybe Tribeca. All of the family condo buildings are killing the schools. A couple of the best public schools are way too oversubscribed. Someone in the administration mentioned that catchment zones may need to be redrawn. Legally, the board of ed can only allow a certain number of children in each facility. Too many children in one facility, and you may have the board of ed narrowing the zones and sending children outside of those areas to different schools. This would be very, very ugly. The board of ed's response, I believe, was to tell an audience that they can send their kids to private schools. A couple of new schools are in the works (I know one is scheduled to begin construction in BPC) but it won't likely be enough given the 2000-05 increase in the under-5 population.