Not buying now vs. Not buying EVER

"Anyone who bought in 2009 or 2010 lost lost money."

An important clarification would be the stipulation that you have to *sell* in order to lose money. Doesn't anybody buy an apartment anymore to *live* in?

"Anyone who already bought from 1850 to 2008 has made out like a robber baron. That boat has sailed. Anyone who bought in 2009 or 2010 lost lost money."

Pretty strong statements, and there are of course exceptions in both groups, but generally speaking, that's probably about right. I'm looking to buy in the short term because I think the time is right. Might prices soften a little more? Yes, it's possible. But unless I'm going to want/need to sell within five years or so, I'm not concerned. I think Manhattan is a good long-term bet. The people who try to spread fear, calling for crashes and the end of the world generally fall into two groups 1) the bitter and jealous who don't own, are priced out of the market and will never be able to own in Manhattan, and 2) the hopeful who are on the cusp of owning and are waiting on the sidelines hoping for some more softening so that they can make the plunge. No one has a crystal ball. Anyone who claims to know exactly where prices are headed is either a liar or a broker.

the facts are the facts. We are in the midst of deflating a 10yr maybe 15yr RE bubble across the country. Yes, including Manhattan.

While we may not get back to 98' price levels, we sure are at 04' and we are still deflating. Household income in Manhattan is down 10% in 2010' (I am sure it will be down more in 2011,12') and 5% in NYC. So, tax revenues will come down too. Which means taxes will go up. If not, more public sector layoffs and more unemployment. Bottom line, it means less income to may for a mortgage and maintenance. We are entering a global recession which means the Euros, the Chinese, the brazilians, the indians or whomever you say -- will not be buying RE to keep it "propped up" at these inflated price levels.

So if you bot before 2002' and would like to sell you are probably ok, but you better price your apartment right or you will be in the hole!

so buying is not always the right answer

I am 100% agreement that prices are headed down. If you're not already sitting on a mountain of pre-2008 profit, then don't bother. That ship has sailed. Owners should now just concentrate on paying off the mortgage, and living rent free for the rest of their lives. Renters, well, I guess can just keep paying off their master's mortgage.

When did 'when' you bought in manhattan become a measure of financial success?

It's only the bubbler tools who could never dream of re-couping the 2007 bubble 'profits' thru their TRUE careers that ought to be kicking themselves in their vaginas.

For w67, the $500psf manhattan spot is no different than the 50 footer that sold for at the bubble $1mm and which was bought by me for pennies on the dollar from a BofA sub in Florida - i'm financially smarter than you current fktard 'owner.'

For all those with w-2 with exponential growth tru hard work or more pole dancing, making their monthly mortgage/cc nut smaller thru this great depression, I congratulate you on achieving the american dream of not moving every 4 yrs. Just the standard 7.

Bravo. Bravo. Bravo. My right nut has a white pubic hair. Wtf? Is there a 'just for nut hair?'

When? Ever since I've been on this planet. Oh, you bought 30 years ago? That means you have $x00,000 free and clear burning a hole in your pocket. Very simpler marker. By 2008, it was the level 1 status divider, outside of being able to say "I work in Finance"

>Bravo. Bravo. Bravo. My right nut has a white pubic hair. Wtf? Is there a 'just for nut hair?'

Someone call the primatologist. We have an ape medical mystery.

Ever hear of 'winner' bias?

A significant portion of ppl that bought in manhattan over the last 100 yrs LOST money in manhattan. Fact.

Ed at my yacht club 30 yrs ago had a choice btwn buying manhattan re or buying stocks. He went all in on McDonald's.

He's got a bigger boat than most anyone I know.

Think it thru dealboy. Ya think buying manhattan re in the next 5 yrs and sittig on it for 30 yrs will make you richer than starting Google or investing in stks when the final capitulation comes? Fking retard, a fktard if you will

I am comparing renting to owning. Not starting MSFT.
Owning is cheaper than renting, and comes with a lottery payout at the end.
Yea, if you bought in the last 2 years, you lost.
And yes, it is headed down from these crazy prices.
But, to be a lifer renter is to be a SUCKER.

Spanish. Such a rare bird that can translate that.

I wonder if Pedro, Miguel, maria, Hector, Juan or Jesus can do it toooooooo

dealboy, why so much anger?

LOL, not sure. I'm getting too fired up, you're right

Oh, Ed at the Yacht club has a huge boat and stock in McDonalds but is a renter? Great story. Now go take a shower you dirty ape.

My right nut has a white pubic hair

BODY PART!

if it were a xenophobic nut would it reject the white hair?

as a smalltime LL, i would advise you to do the latter, thank you.

Really? anyone who bought in 2006, 2007 and 2008 made out like a robber baron? Those were peak prices. You are an idiot.

Dealboy, keep the anger. I rather like it.

Here's a thread that might interest you. Bought in 2003 for $625K, sold in 2010 for $835K. But didn't actually make anything once costs are accounted for.

http://streeteasy.com/nyc/talk/discussion/22272-case-study-7-year-investor-34-gain-no-profit?comment_id=340668

Not sure I would agree with the exact dates but in principle I agree with dealboy. Renting gives a person flexibility, which is useful so he/she can jump in if ever a big dip comes.

For now I still think that there are a lot of rents out there that are less than the carrying cost of owning a similar apartment (assuming you count everything - common charges plus taxes plus interest on mortgage plus a reasonable percentage representing the opportunity cost of making the downpayment). 2 or 3 years from now if prices come down a bit, and rents keep going up, then that may change . . .

>>Here's a thread that might interest you. Bought in 2003 for $625K, sold in 2010 for $835K. But didn't actually make anything once costs are accounted for......

Thank you .... bcs of my ADHD I did not read all, but great post.

Inonada - thanks for the link to your previous thread... a fascinating analysis. Clearly a lot of people think that it is easier to make money in NYC real estate than it really is.

Net net, you need a house price "boom" to make money if you want to "trade" property (and you show a 7 year trade...)

Unless you can find one of those rare and wonderful properties where the rent more than covers the carry cost (of a 30 yr fix, and not just interest only).... so that in 30 years you own the thing outright with a real return of say 5% (which isn't so bad).

dumbboy

I don''t think the rent vs buy decision is that clear cut even in Manhattan especially for some segments like +2BR. Rentals in downtown full service buildings for +2BR are running $5-6K/month with +5% increases expected because vacancy rates are so low. With rates <4%, you can effectively buy the same property for similar or lower monthly cash outflow, which will be even lower once you take the tax deductibility benefits into account.

Agree with some of the other posters that even Manhattan property isn't going launch another leg up anytime soon. But I think the math definitely favors buying if you actually are buying the place to live (+7 yrs) as opposed to selling for profit in next 2-3 years.

i bought a brownstone in Carnegie hill for 850,000 when will we be able to do that again. buying beats renting.

Depending on your life style it may be better to rent so you have the freedom to move around. Who wants to tie up all that cash into a down payment? The reality is, its getting back to the days when you can only buy if you have the money straight out to buy all cash. Not that you should buy all cash, but like my dad used to say "if you dont have it already dont charge it". The last 10 years have spoiled people into thinking all they need is a down payment and a good salary to keep up with the payments. This is bad thinking. From an investment stand point, you should never invest money you need to live, you should only invest money you can and are willing to lose.
Keep in mind before you buy into the hype of living the american dream and owning your own home. 1. If you live in the house you bought, it is NOT an ASSET, it is a liability taking money out of your pocket every month. 2. Only if you are making money on your property is it considered an ASSET, hopefully delivering a passive income.

3. You dont really own anything, proof....dont pay your property taxes and lets see who owns your home in a year. Ownership is a myth and an illusion. We can also die anyday, not to sound pessimistic, but this is reality. Live life to the fullest, travel, learn the world around you, spend your money enjoying life, not worrying about investments going up or down.

"dont pay your property taxes and lets see who owns your home in a year"

no kidding. "owners" will realize that the unfunded teacher pensions is the real owner :-) and boomers are retiring, how fun! rent stab beats buying imho.

5% on a real estate investment over 7 years is not a great return... neither is it risk free. if we are in a prolonged real estate downturn, you'll be lucky to breakeven after all fees and commissions are accounted for. also keep in mind these tax abatements that all these new buildings have aren't going to last forever. when you eventually have to pay $1k in RE taxes and $400-$1k in common charges, plus however much is left on your mortgage...wow, not sure how much profit will be left.

another good point mentioned... how many of us have a few hundred $k to lock up in a piece(s) of real estate? have we all heard of people that are "house poor"?

your home is not an investment. you live in it. so it's not all about $. i think rent vs buy financially isn't that different going forward. real estate is inflated because of free money... so called QE, stimulus, aka uncle sam's fiat money printing. my opinion is you buy because you get spaces that are more unique and nicer than rental options, and if you're buying you have to be committed to the place for 5 years to reduce the financial risk.

in the end. who care's? just do whatever you want.

I bought towards the end of 2010 and I'm -300 monthly carry compared to a rental right now. if I include taxes Im break even. I enjoy making improvements to my place and not having to worry about a lease. im glad that i bought.

if you have the money to buy all cash great but otherwise you have have to live it is cheaper in the long term to buy

'if you have the money to buy all cash great but otherwise you have have to live it is cheaper in the long term to buy"

Every analysis ever done by an Economist or similar I have ever rent says that over the long term this is NOT true.

inflation generaly looks after you

if oure in a rent stabilized apt that different

jmarrus, do you think all the various analysis of the long-term movement of home prices DON'T TAKE INFLATION INTO ACCOUNT?

Well, in case you are living in a cave, they do.

Angeloz - Every time we come close to finally buying (after many years of looking) I always come back to your point #3 which should be #1!

Live life to the fullest, travel, learn the world around you, spend your money enjoying life, not worrying about investments going up or down.

We'd pay at least 1-2K more a month to have something close to our NYC rental - even with a 30-35% downpayment. I'd rather spend 10-12K taking my kids to Europe next summer.

A point to consider -- and I know it's far down the road -- but that if you buy before age 40 and start paying off your mortgage, there's a good chance that your retirement housing costs will be fixed at a very low level, property taxes and utility costs aside. Even if you buy at age 50 you'll still have amassed a fair amount of equity so you can sell and downsize into something you own free and clear.

Renting, well, that most likely won't be the case.

That's why even if you rent now you might want to stockpile a down payment and wait for a good time to buy -- for instance, now, when interest rates and prices are down. Or, say, when you get a lump-sum bonus or an inheritance. Even buying a rental property that you can later live in is a decent option.

The most important thing is to keep your housing cost within your means, renting or buying.

"Anyone who already bought from 1850 to 2008 has made out like a robber baron. That boat has sailed. Anyone who bought in 2009 or 2010 lost lost money."

Per the stats, isn't it most folks buying in 2006, 2007, and 2008 as well?

Even with the recent bump, 1 bedrooms median is between where 2007 started and ended... 3 bedrooms are lower than 2006... add in transaction costs, carrying costs, etc...