Ok I would buy this @ 181 East 73rd Street #5D

interesting evaluation.
So, no commentary as to where the market would be in 7 yrs. but you think that this place is priced right on the button. Going to give this some thought. Like this post.

Nice, although I get 1250sf rather than 1400. Still, it comes to a bit over 900 psf which is still not bad. In my opinion if I had to choose this or CT, I would go for this.

Rhino,
Would you explain this formula?
"the 'rental yield' so to speak is like 5%."

Thanks

I assume that if I paid cash for the place, (market rent - maintenance) x 12 / purchase price = ~5%. Its not a bad dividend rate so to speak....and its after taxes...because you would pay rent with after tax dollars.

Bill, would you live in that with two kids instead of a house? What if they were a boy and girl rather than two of the same? Assuming you would use the public school, what would you do when kid #1 graduated 5th grade? These are not easy questions.

"So, no commentary as to where the market would be in 7 yrs."

No, I am assume that over 7 yrs the monthly savings are a decent cushion against declines in values. I am also not speculating on a terrible bear case for the city, which I think it still possible. I would rather buy a house and have the option to squat there forever and use a K-12 school system. All I guess I'm saying is that for the first time in a while I see this place as something I wouldnt cringe at someone telling me they wanted to buy it. If you assume this is a $6k rental...its priced at 16x rent. Thats not bad. Its not great either, but its average at a time when rates are historical lows.

The other thing I can stomach here is the rental yield as I define it is equal to the prevailing mortgage rate or maybe even a little higher. Positive carry.

No, not two kids if they are a boy and a girl. Now it's crowded. If you work in the city, try to find something closer. Ct is difficult.

I think the pros of Darien, CT outweigh the extra train time vs. Rye or Bronxville for instance.

that WOULD be 6k wouldn't it. darien is nice. you guys wanna see what 6k-ish gets you around my neck of the woods?

http://www.trulia.com/property/1065912068-6-Raynor-Rd-Morristown-NJ-07960

this house i actually saw in person. it's a thing of beauty. even if they came down to our price, we're just not right for this house. it deserves a more formal family.

http://www.trulia.com/property/1039717165-69-Morris-Ave-Morristown-NJ-07960

Holy moly. Especially that second one. I don't know the ins and outs of NJ schools. Schools have really become my swing issue. If you go by the book and say that 10 yrs is what needs to be your purchase timeframe, now that lessons have been learned, my first kid is past grade 5 inside of 10 yrs. So that has me restricting myself to K-12 school system purchases.

Rhino, if you can spend $1.1m, you can live a lot closer to NYC than Darien or Morristown. How much house do you really need? The apt is only 1400 sq ft. You can live in any town in the tri-state area with the best schools for under $1m, and 2000 sq ft. Pay attention to your commute time. This is a huge factor in your daily lifestyle.

Rhino, in your eyes, what are the pros of Darien vs. Rye/Bronxville?
60 mins vs. 30-40 mins.. Plus, maybe more frequency.

Rhino - I somewhat agree but why has it been sitting for 6 months then?
I'm in a 2 bed 2 bath right now for low rent, the building is not great by any means but I still can't justify buying bc my rent for a 2 bed/2 bath is significantly below 6k/month.

That's a short term mindset. I'd pay double to own, b/c after 30 years, I live free for the rest of my life. In 30 years, you'll be paying $20,000/mo rent. Good luck with that.

"That's a short term mindset. I'd pay double to own, b/c after 30 years, I live free for the rest of my life. In 30 years, you'll be paying $20,000/mo rent. Good luck with that."

OMG!!! Who is keeping track of the [insert your own adjective] comments on here? Please add it to the list! Should be in the top 10.

Two thoughts, in line with what skeptical is saying.

First, I suspect there is something we don't know about the listing. It's been sitting for clost to 6 months at the current price, and it didn't sell at an ask of $1M a year-and-a-half ago. Poor coverage from a marketing perspective? I doubt it: you can see that there were 34 people who saved the listing on SE when it was on the market 1.5 years ago, and there are 58 for the current listing.

Second, I don't know about "at least $6K to rent" either. At the end of the day, it's a low-floor non-descript apt in a non-descript with both bedrooms directly facing 3rd Ave. I think you can do a lot better than this for $6K+.

lucy,
love the first one.
oh the price one must pay to live like a human

"That's a short term mindset. I'd pay double to own, b/c after 30 years, I live free for the rest of my life. In 30 years, you'll be paying $20,000/mo rent. Good luck with that."

Yep. We've got 10-year treasuries yielding 0% in real terms because we have this huge deflationary pressure coming from everyone parking their money in cash / reducing debt. Given this, the market putting inflation at 2-ish% for the next 30 years, meaning wages are expected to go up 2x.

Meanwhile, dealboy here is expecting $20K rent for non-descript low-floor 2BRs on 3rd Ave. It'd take a $1M income to barely afford that sort of rent. Comfortably, it'd take $2M. So yeah, that's what'll happen come 2041: non-descript low-floor 2BR apts on 3rd Ave will only be affordable to the top 1% of income earners in Manhattan.

Thanks, Rhino. All the best to you in your search.

you have to assume you can get this apt for 10-15% below asking. Pretty typical for brokers to put in on the market at above mkt price probably to ensure they get the listing. Typical broker tactic. get an offer. Then shop that offer to other interested buyers.

also, this apartment probably had an accepted offer in of 999k or less(ie reduced on Street easy in Feb 2010 to 999K) It was probably taken off the market then buyer could not get financing-- thus back on the market for same initial price.. with economy getting worse.. talk of double dip recession... wall street layoffs coming.... bonuses down.. I can argue that the mkt in NYC will also come down. i would definitely not be rushing in to buy an apartment. at least not at the asking

inonada, but dealboy will live free for the rest of his life after 30 years since maintenance/re tax will gradually and magically drop to zero. He also won't need to renovate or even paint the place because an owner can choose to live in a dump if he wants to. That's why 'he would pay double to own'!

> In 30 years, you'll be paying $20,000/mo rent.

No, I agree with inonada, you can definitely do better than that.

Here's how:
1) Play chicken and wait until the last minute so it is difficult for the landlord (never mind it makes it difficult for you too)
2) Using streeteasy, or whatever there is in 2041, find 100 nearly identical apartments in the price range, location, and size that you want
3) Narrow down to 20
4) Visit all 20 in a 1-2 week period before and after work. If a broker makes it difficult, tell him "hey buddy, there are 99 other apartments"
5) Make offers on the apartments you like the most. Those that refuse to negotiate, say "hey buddy, I'm inonada, you don't pull that with me or you'll go on the 'shitlist'"
6) Pick the best one but keep 5 brokers in waiting for you just in case, so you can say "hey buddy, I like yours, but I have 5 others negotiating with me, and they keep coming down in price, plus I'm getting free months, I don't have to put up a security deposit, and one of them is throwing in his/her wife/husband for me"
7) When the landlord asks for the rent, say "hey buddy, none of the 99 other identical places I found is getting any rent from me, why should you. Don't make me put you on the 'shitlist'"

For the full instructions from inonada, see this thread:
http://streeteasy.com/nyc/talk/discussion/27390-se-index-up-for-may-2011
about the 40th post.

Sunday, by that math I think I'm already living for free. The monthlies on my place are half the rent I pay. The remaining half yield 1.5% on the value of the place at best. Take out 1% for transaction costs and 0.5% for upkeep & insurance, I'm essentially borrowing the place for 0%. It's like my own little personal account at the Fed...

But I'll never own the place, alas.

not sure if i follow inonada. In a delationary environment, the best thing to do is but everything in cash. As assets deflate (or go lower in price) you can buy it in the future at a lower price. The "huge deflationary pressure" does not come from everyone parking their money in cash. The pressure comes from the expectation of lower prices in the future. If you expect lower prices in the future, the best thing to do is to "park" your money in cash. The worst thing to do is borrow money or take out a mortgage. If the 10 year tsy was at 0%(they are actually closer to 2.10%) that would indicate an expectation that the risk free asset(S&P does not think it is so risk free anymore) will only be 2% higher in 10yrs.

Rhino, in your eyes, what are the pros of Darien vs. Rye/Bronxville?
60 mins vs. 30-40 mins.. Plus, maybe more frequency.

Property taxes much lower. Beaches. 55 min vs. Rye 40 mins, yes Bronxville is 30 minutes.

"That's a short term mindset. I'd pay double to own, b/c after 30 years, I live free for the rest of my life. In 30 years, you'll be paying $20,000/mo rent. Good luck with that."

This is silly. Why do buyers always claim its either buy NOW or rent FOREVER. You are not living rent free because none of these calcs assume principal repay. If you include prinicpal, its much more expensive to own...still.

bronxville, rye village 2 of the best public shools in the country, rhino---darien not so much the case

i guess you get what you pay for??

Does anyone honestly believe that this apartment will be sold for 1.149mm? really? .. .. in this "new economy"? really? come on?

inonada, it won't be top 1%. Look up rent in NYC from 1970. What was it? $200/mo? What were salaries? $6k? The numbers of the future seem inconceivable, but compare the past and present to understand. You need to understand something called inflation. Minimum wage might be $80/hr in 2041. And rent might be $19,000/mo for a 1BR. Of course, an owner doesn't worry about that. Oh, and increasing cost of maint/taxes/upkeep is just passed onto the idiot renter. DUH. People who own live in a 1BR for $800/mo. The suckers renters pay $3000 for the same thing. Speaks for itself. I would not want to be a 70 year old trying to make $3000/mo. LOL. I'll take the $800, thank you very much. Good luck with your plan, nonetheless.

note: past performance is 100% predictive of future events.

Brooks2, I don't think the outlook for the dollar is deflationary. Neither does the market, which prices inflation at 2%. Nevertheless, people have been deleveraging into cash paying 0% (despite their own inflation expectations). Deleveraging takes money out of the system, and hence has a deflationary effect all else being equal. The goal of 0% rates is to counter deleveraging & the rush to cash. It is one of the tools being used to counter deflation expectations. At least, that's the way I see it.

Dealboy, you and I disagree on inflation expectations. Based on your $80 minimum wage in 2041 vs. $7.25 today, you are saying that you expect inflation to be 11x or 8.3% a year for the next 30 years. The market puts it at 2% or so, making minimum wage $15 or so in 2041.

Will the high inflation from the 70's & 80's repeat? Maybe, but the market (which did a decent job predicting it back then) would be dead wrong today. Back in 1970, the 10-year was yielding 8%. In 1980, it was 12%. Today, it is 2%. Unlike you, the market is not expecting $80 mininun wage.

BTW, inflation 1970 to present has been a factor of 6, or 4.4%. Just to put your 8.3% in context, the polar opposite market expectations notwithstanding.

dealboy, this goes without saying, but it depends on how much you pay to buy. If you look at historic offering plans at www.offeringplanet.com, for decades you could expect to pay 10x the annual maintenance. Not anymore.

Your $800/$3000 example may be off. It's probably safer to say a landlord collects twice what it costs to run the building. E.g., my maintenance is $2300 on a place that's worth more than $4600. So the question is what it was worth to save that $x per month until I leave, and whether you can predict future rents.

(I must be really bored to throw my oar into the nth rent-versus-buy argument....)

LOL, NWT. You don't belong here. Have you filled your freezer with random containers full of water to turn to ice? Will help keep things cool longer when the power goes.

Dealboy, FYI, average HH income was $14.2K in 1970. It is now $125K. The extra increase beyond 6x inflation works out to 1% a year, which is very much in line with per-person productivity gains.

Dealboy you fall prey to the idea that not buying right now means renting forever. Its so obviously wrong that its sad that I even have to point it out to you. Good luck with that.

Remember...15x rent is only the average historically. So am I running out and buying my rental tomorrow for $1.15mm? No. Is it available for 15x rent or $990k....no I dont think 1200sqft 2/2 in PS6 is yet available for $990k... My only point is that it seems to be available for 16x for the first time in a long time and rates are still very low. I just dont think a 2/2 suits me very well for very long.

There were nice 2/2s going in 40 e 88th that were kinda cool with ~$1200 maintenances that were not bad...PS 6.
Those I could also have countenanced.

Dealboy, I paid 3 years or rent and saved transaction costs by not buying in fall 2008. It was great luck with that.

think for a moment of how much you're talking about. probably the best ROI you'll ever see.

No return if no investment...but I know what you mean. I like the positve carry model. Dont buy if cash on cash return < mortgage rate. Its roughly even... which is why for long stays there is stuff to stomach.

"average HH income was $14.2K in 1970. It is now $125K. The extra increase beyond 6x inflation works out to 1% a year"

inonada,
could you show how you calculated this? I couldn't do it.

Funny, spoke to someone today who said her parents could have bought a 10 room apt at 911 Park Ave for $25,000 in 1954. I'd like to figure out how much that 1954 $25,000 is equal to today.

Then, she told me she knew someone who bought an E. 79th St townhouse (off 5th) in the mid 1950s for $25k. Later on (don't know when), they sold it for $90K & thought they made out like bandits. Today, that townhouse would prob cost around $20 mil (+/-).

Regarding Manhattan RE price jumps, I think it's part inflation & part perception of value.

"Dont buy if cash on cash return < mortgage rate."

Hi Rhino,
Sorry to be a pain, but would you give an illustration of that? As this board may know by now, I'm extremely math challenged. Thank you.

I love 40 e 88th. Beautiful bld, great location.

Part of the 1954 offering plan for 911 Park is at www.offeringplanet.com. Insider prices for the 10-room A line ranged from $9060 to $11,220, with annual maintenance from $4530 to $5610. It was 43% deductible.

Per http://www.bls.gov/data/inflation_calculator.htm, in 2011 dollars that'd be $76,100 to $94,200, with annual maintenance of $38,000 to $48,000.

In 2006, #9A sold for $5,500,000, with annual maintenance of $55,000.

what does this tell us about next year?

All questions. No answers. Columbiacounty.

Love the location, building is nothing special (we put an offer on an apartment there last spring, but were conflicted).

We have 2 kids, could make this work if we had to, but would prefer something bigger. especially long term.

>NWT I know that in 1954 banks did not give mortgages on coops, as they were not deeded property. Even in the 1970's prime 5th and Park coops
went for what would be considered unbelievably low prices.
What year was it that the banks figured out how to structure mortgages for NY coops?

The floorplans of the 2br/2bth apartments are basically the same as most 1960's 2br/2bth apartments. The only fairly "real prewar" layouts seem to be the 6's, which don't seem to transfer very often. Okay , the ceiling beams must be just wonderful.

wow, NWT, that's some detective work!

Maybe the $25K my friend quoted was a flip?

"Per http://www.bls.gov/data/inflation_calculator.htm, in 2011 dollars that'd be $76,100 to $94,200, with annual maintenance of $38,000 to $48,000. In 2006, #9A sold for $5,500,000, with annual maintenance of $55,000."

So, what do we conclude? $9060 - $11,220 in 1954 is equivalent to $76,100 - $94,200 today, yet, in 2006 ( a bubble year), 9A sold for $5.5 mil. Wuz it all mean??

Dwell lets see how this cut and pastes

Purchase Price $1,150.000
Down Payment (450.000)
Mortgage Amount $700.000

Annual Property Taxes $10,596
Mortgage Rate 4.5%
Cash Return on Investment 4.4%
Positive (Negative) Carry -0.1%

Mortgage Interest $2,625
Est. Maintenance or Common Charges 883
Monthly Property Taxes 883
Pretax Monthly Cash Cost $4,391
Lost interest on downpayment @ 4.5% 1,013
Fully Costed Monthly $5,404
Presumed Rent 6,000
Savings $597
Tax Deduction @ 40% 1,403
Total Monthly Savings $2,000

Price to Rent Multiple 16.0x

Dwell I assume 50% of the maintenance of this apartment is tax deductible

I also ignore transaction costs

Whats that whole walk down 1954 lane say... Yes part of the rise in Manhattan values is desirability increases....part is easy financing (did not know you couldnt even get a mortgage on a coop in 1954...interesting). The other part is financial industry incomes.

go watch Mr. Blandings Builds His Dream Home if you want a snap shot of those times.

>go watch Mr. Blandings Builds His Dream Home if you want a snap shot of those times.

Are you in the credits for that one?

columbiacounty's reference movie is from 1948

dwell, the $25K might've been the price to a non-tenant. Per the NYT, which used to report who bought where but not for how much, there was at least one of those in 1954.

A better example would be 1025 Fifth, which was built new as a co-op in 1954, but no offering plan for that.

Then as now, when buying a co-op you need to add your proportionate share of the underlying mortgage to the nominal purchase price. For 911 Park it went like this:

Nominal price: $30 per share
Underlying mortgage: $75 per share
Annual maintenance: $15 per share

Those proportions are much different today. So is the co-op's budget. Back then it was:

24% wages
21% RE taxes
21% mortgage interest
15% mortgage principal

Now most co-op maintenance goes much more to labor and taxes.

Then you there're all the ineffable factors, e.g. assumptions about how much of your income should go for housing. That used to be 20% for a middle-income family. The wealthy (911 Park kind of money) were assumed to pay much less, and the super-wealthy, in just a few buildings, even less.

ph41-- NWT I know that in 1954 banks did not give mortgages on coops, as they were not deeded property. Even in the 1970's prime 5th and Park coops
went for what would be considered unbelievably low prices.
What year was it that the banks figured out how to structure mortgages for NY coops

I think ph41 is alluding to the most important points. The big picture or Macro economics and the structural change in our economic system over the past 30 year including; financing, income gap and demographics. The value of anything is what someone else will pay for it. With the lack of availability of "affordability Products" (ie the IO mortgage, pay-option arms and even Mortgage Ins-- can we you say fnma, freddie mac) and less and less people willing to lever up as much- to pay more-- NYC values will come down.. This "great de-levering" will take decades. The bulls will say yea but manhattan is an island and supply is limited.. well as the Baby Boomers are starting to retire there will be many more apartments becoming available-- they will be living on fixed income-- and with maintenance and taxes going up -- and fixed income instruments yielding 2% if they are lucking and their stock portfolios getting crushed(especially with Bernake tryint to inflate us out), they will not be able to live in manhattan-- and if they are counting on Uncle Sam for health Care and Social security-- good luck!
Bernake can try to inflate the F$%ck out asset values(stocks and Real estate) , but with Obama's war in Wall Street and their high incomes-- he will do everything he can to transfer wealth.. to my point -- you all can do all the math you want- rent vs buy etc. But if there is no one there to buy your apartment(and we have seen this over the past 4 years) what is the value?(rhetorical)
I bet those auto executives in Detroit back in the 50s were saying the same thing about real estate in Detroit..

Thank you so much, Rhino!!!!!!!!!
Re: 1954, spoke to a life long NYer who told me what co-op prices were back in 1954.

NWT, I hear you, but after we take into account 1954 & 2011 dollar differences, there's a $4 mil increase in apt prices when looking at the 2006 sale of 9A in 2006. Yes, RE tax has zoomed up, underlying mtg & labor increased, so I'll attribute $1 mil to increased building costs. That leaves about $3 mil unaccounted for. So, why, how did that extra $3 mil get tacked onto the price? Where/why/how the extra $3 mil?

The maintenance has increased at not much more than would be due to inflation. I don't know about the $4,000,000 increase. A lot of the academics who research these things would say that a good chunk of it is what they call "zoning tax". More people with money wanting their primary residence here, and many more restrictions on development, make land -- and our little shares of it -- much more expensive than inflation would indicate. You might call it a decades-long bubble, with little dips along the way. Whatever the cause, people on a given point of the income curve live a lot less grandly than they used to.

Thanks, NWT. Yes, it's quite baffling & insanely bubbliscious.

Rhino: sorry to hijack your thread!

Another little snippet, 860 Fifth, built as a co-op in 1950: http://www.columbia.edu/cgi-bin/dlo?obj=ldpd_YR_1351_MH_002_001&size=large

#5A's purchase price was $19,240, or $180,400 in 2011 dollars.

Annual maintenance was $3,016, or $28,300 today. A bit less than a third of that principal against the underlying mortgage.

#8A sold for $1,700,000 in 2009. Annual maintenance was $30,400. So, same story. Maintenance on track with inflation, while value $1,500,000 more.

It'd be interesting to compare the demographics of those 1950 and 2009 purchasers.

NWT, I think it's important to look at historic pricing & yet, I'm unsure as to how it can help to guide one today. I used to think that the price jumps were due to inflation, but, now I see that it's more than that. Seems it's 'zoning tax' & bubbles, but even that is not really helpful for me re: not over paying today.

its all about supply and demand. what was the tuition at harvard in 1954?

Right, tuition is another thing that's gone up vastly more than by inflation. In 1954 the ratio of teaching to non-teaching staff was much higher, for instance. Now you need a staff of shrinks and god knows who else to wipe the kids' butts. Back then someone in college was treated as adult.

dwell, it's not important to look at historical costs, just interesting. It does you no good at all when figuring out what to do today.

There's that famous study looking at centuries of prices in Amsterdam, or those looking at post-1900 housing costs in the U.S. All well and good, but of no use when your lifetime happens to coincide with one of the many long peaks rather one of the long valleys. Maybe the current little valley is the best you can hope for. Or not. In the end it's not going to matter much whether you had a room or two less or more for your money.

think about what tuition and nyc apartments have (had?) in common.

Yes, somewhere there's an analysis of the total freshman class size of Ivy schools over the decades, versus population and demand for them.

There've been big jumps in supply here -- e.g. after the Third Ave El came down -- but not big enough.

I hear you NWT. But, for me, looking at prior prices told me that there was a housing bubble: ie: seeing prices jump from 2004 to 2008.

So, question: to avoid over paying in today's market, what does one look at? If the entire market is a bubble, then it's just a matter of paying a lesser bubble price vs. paying a greater bubble price. Or is it that prices will never go down to where they were in 2003?

nwt-Right, tuition is another thing that's gone up vastly more than by inflation. In 1954 the ratio of teaching to non-teaching staff was much higher, for instance. Now you need a staff of shrinks and god knows who else to wipe the kids' butts. Back then someone in college was treated as adult

Don't you think it's eerily similar that when it became easier to finance your college education with student loans, or a line of credit for the "equity" in your houses that the price up tuition went up? Is this obvious only to me? does not anyone understand there is massive de-levering of our whole financial system. that "Lehman Bros" was just a warning flag?? really???

Exactly: you could say that 2004-2008 was a bubble on top of a bubble.

Maybe paying market price now will be as good as you're ever going to get.

Or maybe everything goes to pot and we see w67th's $500. Or $200. Pick a number. If that happens, though, meaning nobody wants to buy anything, you won't want to live here anyway.

Again, you could be in your dotage still waiting for that $500 equivalent, or being glad you'd bought way back in 2011, or somewhere in between. You'll have arthritis either way.

first of all despite what many say, nyc is not one market. talking about price increases on prime 5th and park avenues since the 50's is a very distinct sub market. if you believe, as you say, that current prices are a result of a bubble, then the answer to your question is to wait until the bubble deflates.

and if the money you are putting into an apartment is not significant to you, then don't worry about bubbles, buy what you want as a consumable.

Thanks, NWT. I suppose what you're saying is to make an intelligent, well researched guess. I suppose that's the best we can do.

Agree cc, gotta find your comfort zone.

in case you missed this from above:

Rhino86
about 20 hours ago
ignore this person
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Dealboy you fall prey to the idea that not buying right now means renting forever. Its so obviously wrong that its sad that I even have to point it out to you. Good luck with that.

To me, this is the key point.

Oh, to clarify, I am not saying to go out and buy in NYC. There is no way in hell I would buy in NYC right now. I am saying to buy in 1978, 1985, 1991, 1997, even 2003. By now, you've missed the boat, and it will be a long ride down. I was addressing the lifelong nutcase renters who will never buy anything, ever. Good luck paying market rents in 2041.

Personally, I have been an owner for almost 10 years, and the price of my real estate is 40% above my buy price. Also, my monthly carrying cost is about half of renting, b/c I already paid off my mortgage. For me, buying was one of the best financial moves I've ever made, and I enjoy a 50% discount to market rent every single month.

That's funny, dealboy. Up until that post I thought you were a "buy now" person. You seem to be saying "buy sometime, but not now". The talk about buying in 1978, etc., is great & all, but the OP was probably living in a dorm room a decade ago. I'm curious, then. How long ago did you start being gainfully employed?

how are the building finances?

I'm not going to weigh in on rent v buy, it's too frustrating. But I do have to critique the morristown angle. If you buy a $7,000 square foot house in morristown for the same price as a 1400 square foot apartment in manhattan you will be taking on enormous additional expenses. You will have to landscape and maintain two acres of property. You will have to reshingle/repaint/reroof this enormous building when needed. You will have to furnish over s dozen rooms. You will need to heat and air condition 7,000 square feet. Someone will have to clean this place. And when it comes time to renovate you have to multiply your per square foot cost by 7000 rather than by 1400.

Setting aside the fact that I consider it close to insane to choose to spend 2.5 hours evey day commuting, the price comparisons between living in the city and the burbs have to take these sorts of costs into consideration. Why not buy a much smaller house in a much closer suburb? You will save time and you will save money and everyone will be happier.

Or better yet: rent and stay in PS 6. Ain't broke, don't fix.

hr, no one has to move to grand old house in morristown if they don't want to. it was merely an example to contrast what the same amount of money can buy throughout the ny metro area, which luckily for everyone who lives here, is pretty well connected with public transportation. you are certainly free to take your million bucks and buy yourself that 2/2 "1200" sq ft box in a "good" ps zone (which as you may or may not beware, only extends until the end of elementary school). this is a real estate board, yes? it was just a little context, nothing more.

so...a million bucks will take the place in morristown that 's listed at $1,795,000?

no, dumbass, it will be take other place

http://www.trulia.com/property/1065912068-6-Raynor-Rd-Morristown-NJ-07960

note the pool and tennis court

Lucille, nothing wrong with your example, but obviously there's more to the expense of a property than the sale price. It is a real estate board, yes, so I was pointing out that your example, even if it sells for the same price as the apartment, is actually much more expensive because of the ongoing costs associated with such a property. Pool and tennis court? Lovely. But that's another significant maintenance cost. If all he can afford is a $1 million apartment then he can't afford this house.

Lucille, nothing wrong with your example, but obviously there's more to the expense of a property than the sale price. It is a real estate board, yes, so I was pointing out that your example, even if it sells for the same price as the apartment, is actually much more expensive because of the ongoing costs associated with such a property. Pool and tennis court? Lovely. But that's another significant maintenance cost. If all he can afford is a $1 million apartment then he can't afford this house.

Good points by happyrenter.

hr, it may be more expensive to maintain, but that's because accounts for a larger chunk of your lifestyle. living in a house like that removes the need for a lot of OTHER lifestyle expenses and therefore the maintenance of this house cannot and should not be compared to the carrying costs of a small apartment where you basically sleep, but pay manhattan prices to live your actual life outside if it.

everything from kids' birthday parties/any larger scale entertainment to everyday warm weather recreation, this house got you covered.

hr, as far as other points you made last night

"You will have to landscape and maintain two acres of property"

you don't have to "landscape" it, you can pay someone to just mow the lawn, which is very cheap. any designer landscaping and gardening is purely for you own enjoyment of your home and reflects how much time you and your family spend outside (for me the gardening would actually be considerate because i like gardens and landscapeing and always wanted a piece of land to play with, although, and perhaps being stpid and naive, i would try to plan/plant the garden myself at first. my grandma paid for lawn mowing and tree/shrub maintenance but took care of her gardens herself until she was no longer physically able. it's possible!)

"You will have to reshingle/repaint/reroof this enormous building when needed."
ok, once every 30 years i can pay for this

"You will have to furnish over s dozen rooms."
no problem. you have good taste, dontcha hr? you can throw together a few nice things with antique store cheapos, and sale stuff and make your house look like a star, right?

"You will need to heat and air condition 7,000 square feet"

true for someone who chooses to live in a 7000 sq ft house, but contrary to popular belief, not all houses in the burbs come in that standard size.

"Someone will have to clean this place"

yes, and i would tell you the difference between what i pay to have my house cleaned out here and what paid to have my apartment cleaned in manhattan, but i don't want to upset you.

"And when it comes time to renovate you have to multiply your per square foot cost by 7000 rather than by 1400."

again, the price difference is just tremendous. i would actually think that those renovation costs would be shockingly comparable.

Lucille,

The house you linked to is 7000 square feet. I didn't pull the number out of thin air. You suggested a 7000 square foot house as a possible alternative to the 1400 square foot apartment in Manhattan, and I merely point out that this will include many costs that the apartment in Manhattan will not.

A few other points: just as you say that landscaping and nicely decorating this 7000 square foot house on nearly three acres of land is optional, the expensive lifestyle you ascribe to city living is also optional.

The price to clean a 7,000 square foot house is more than a 1400 square foot apartment. But that's not even the point. In a 1400 square foot apartment the family can clean it themselves relatively easily even if both parents work full time. That's obviously not an option in a 7000 square foot house.

I don''t know about you, but I don't think you can reasonably go 30 years between paint jobs. When the floors need to be refinished, the walls painted--interior or exterior, etc. you are going to have a massive and massively expensive job on your hands,

The larger point is that there are many great reasons to move to the suburbs, and many great reasons to stay in the city, but you have to make apples-to-apples comparisons when deciding where to live. In the city I don't need a car, I don't need a house cleaner, I don't need anyone to maintain a lawn, I don't pay for heat, I don't need to air condition a huge house, I don't need to maintain a large building. On the other hand, I pay higher income taxes, I live in a much smaller space, and I don't have a yard with my own pool and tennis court. Personally, I am very environmentally conscious and I would consider it absurdly wasteful to live in that kind of suburban way--why do I need a massive house with its own pool and tennis court to sit empty all the time? But again, everyone is different.

Did I just miss that the annual taxes for the morristown home is 23k? The 6k/mo home is in reality 8k/mo home.

streakeasy, Last year the Times did an article about a couple in Brooklyn who sold their house and moved to Maplewood NJ. It ended up being far more in cost than they anticipated and the taxes ended up being 29K for a cape colonial. They ended up selling and going back to Brooklyn. They were lucky as I am sure there are those who left the city and realized too late what they had done.

I would take a gamble that those property taxes only go up.

hr, different strokes. i realize u got that 7000 from my example, i was conceding ur point. and im not sure why ur pool tennis court would sit empty all the time. mine certainly wouldnt. i cant comment on the maplewood people who moved back to brooklyn. but im sure they had their reasons and nytimes which everyone here usually calls a shill for the ny re industry was surely very happy to print their tale of suburban woe.

Back to the inflation-beating increases in Manhattan RE & Ivy League tuitions. As I've said before, inflation-beating increases in those 2 segments ("prime" RE & private school tuition) over the last 40 years are not limited to New York or even the U.S.

i have a question. it's become fairly clear how a housing market corrects itself. how does school tuition market do that? those prices are set, so the powers who do that would have to actually and officially turn back that clock, so to speak. has that ever happened before? school tuition becoming cheaper across the board for some reason? thank you.

Newbuyer99, You but an offer in last spring? Do tell. The seller did not accept? I bet they are regretting that now. Or is the broker still shopping your offer?

Not aware of any private schools lowering tuition in the last 40 years. The private school market is obviously not exactly analogous to the RE market - some interesting similarities in recent history. I'm drawing from UK schools mainly as well as NYC private schools:

1) Uber-prime becoming more exclusive - what stops the prices at the most sought-after schools from being much higher than its peers is the non-profit nature of such schools and the existence of endowments as well as the desire not to sacrifice candidate quality.
2) Less sought-after schools shutting down or hurting much more than other schools when times are bad.
3) When times are good, proliferation of new schools - some of which take, most of which don't.

I think the availability of market data (college admissions, league tables) has also changed the market for schools (public and private) and the ease and availability of online applications.

the question is how to consider financial aid; to the extent that it is not loan based, it is the equivalent of free months of rent or a discount rebate paid on closing.

Yes, and the lack of a need to charge what the market will bear at a top school.

What is interesting is whether the 2 things are related.