Manhattan Sales fall 12%

Purchases of condos and co-ops in the borough fell 19 percent in the fourth quarter from a year earlier to 2,403, according to StreetEasy. The median price dropped 9.1 percent to $750,000.

Brown Harris Stevens and Halstead Property LLC said completed condo and co-op purchases fell 13 percent from a year earlier. The median price slipped 6.5 percent to $785,000, according to the brokerage firms

It “was our greatest year in history” in 2010, Willkie said in an interview. The risk of a tax increase “was very much a factor that did not exist in 2011,” he said.

Corcoran Group said sales tumbled 12 percent from the fourth quarter of 2010, and the median price dropped 5 percent to $795,000.

But that cannot happen in Manhattan

i know shocking. How can prices fall with no inventory? astounding!!!!

NYTimes reported today that while sales were down 12.5% for the year over last year, median price was up from $800K in 2010 to $855K in 2011. Overall a mildly mixed report that can be summarized as a flat market. Not a lot of drama here.

Really? What article did you read? Not according to the New York Times article I read.
The median fourth-quarter sales price was $855,000, down 1.2 percent from the same time in 2010, according to one report, from Prudential Douglas Elliman.

http://www.nytimes.com/2012/01/04/realestate/manhattan-real-estate-prices-are-steady-but-sales-drop.html?_r=1&src=me&ref=realestate

A report by Streeteasy.com showed overall inventory at 13,147, down 5.9 percent from 2010. “I think inventory being down is actually a good thing, because it keeps prices from plummeting even more,” said Sofia Song, Streeteasy’s vice president for research. “It suggests that a lot of sellers are holding on to their properties to wait out the market.”

A lot of people held on to their internet stocks after the bubble too. good luck!!!

"Low inventory" could be code for "I pulled my listing because I could not get close to the price I wanted." It does not mean people are out there snapping up deals.

No worries Kyle. The average has gone down, but you didn't sell so it's not relevant to you. You got refied to a kickazz 4% 30 yr fixed.

You took Bernie's 'let the morons hold back the damn with cheap money for 2 more year' until we raise rates trade!

Such pretty unicorns.

Data by apartment size:

Median coops
QTR Studio 1 BR 2 BR
2011 4 345000 555000 1050000
2011 3 345000 563500 1211600
2011 2 355000 550000 1160000
2011 1 347500 535000 995000
2010 4 345000 568000 1150000
2010 3 350000 550000 1175000
2010 2 380000 599000 1100000
2010 1 330000 575000 1375000
2009 4 350000 591000 1130000
2009 3 367500 575000 1450000
2009 2 365000 580000 1750000
2009 1 365000 580000 1125000
2008 4 382500 645000 1450000
2008 3 400000 630000 1351000
2008 2 440000 695000 1412250
2008 1 465000 690000 1417000
2007 4 415000 682000 1350000
2007 3 352000 595000 1295000
2007 2 367500 600000 1185000
2007 1 345000 549000 1120000
2006 4 385000 582500 1490000
2006 3 357500 585000 1100000
2006 2 370000 575000 1265000
2006 1 383000 612000 1217300
2005 4 349000 575000 1195000
2005 3 352000 579000 1100000
2005 2 327500 525000 1300000
2005 1 295000 500000 915000
2004 4 285000 455000 879000
2004 3 275000 446000 875000
2004 2 247000 410000 799000
2004 1 237000 395000 825000
2003 4 235000 399000 760000
2003 3 229000 375000 735000
2003 2 225000 375000 695000
2003 1 225000 370000 685000
2002 4 225000 370000 710000
2002 3 220000 357000 715000
2002 2 205000 350000 670000
2002 1 195000 330000 625000
2001 4 199000 325000 635000
2001 3 198000 330000 652000
2001 2 187500 330000 650000
2001 1 185000 316000 650000
2000 4 165000 305000 625000
2000 3 159000 300000 655809
2000 2 147000 279000 645000
2000 1 135000 262500 575000

Average coops
QTR Studio 1 BR 2 BR
2011 4 347,061 597,856 1,227,315
2011 3 351,117 576,588 1,543,892
2011 2 345,122 593,253 1,330,163
2011 1 335,193 567,003 1,294,898
2010 4 335,830 589,327 1,342,835
2010 3 363,308 577,655 1,324,502
2010 2 387,930 617,516 1,223,320
2010 1 333,787 619,909 1,208,255
2009 4 355,906 637,201 1,244,534
2009 3 356,742 600,453 1,164,780
2009 2 373,572 596,736 1,224,939
2009 1 387,313 626,332 1,414,559
2008 4 378,412 702,872 1,680,558
2008 3 398,260 661,131 1,568,177
2008 2 436,035 759,154 1,641,764
2008 1 514,129 735,660 1,663,847
2007 4 413,699 716,480 1,622,386
2007 3 354,057 637,232 1,429,212
2007 2 373,732 625,343 1,389,037
2007 1 365,204 573,609 1,305,483
2006 4 398,947 609,706 1,243,166
2006 3 383,129 608,317 1,296,229
2006 2 375,882 600,046 1,491,128
2006 1 391,059 642,423 1,327,986
2005 4 354,558 604,472 1,349,817
2005 3 376,035 601,890 1,240,353
2005 2 343,566 551,626 1,210,441
2005 1 310,473 538,786 1,152,180
2004 4 302,848 482,685 1,064,907
2004 3 282,060 466,999 1,038,286
2004 2 273,967 434,746 1,004,337
2004 1 240,624 418,667 955,352
2003 4 263,442 439,778 912,991
2003 3 239,118 405,337 876,909
2003 2 232,519 383,337 871,856
2003 1 242,661 413,717 798,608
2002 4 230,919 392,542 853,658
2002 3 224,966 365,925 748,995
2002 2 215,545 365,633 735,189
2002 1 200,591 354,880 735,525
2001 4 273,275 383,636 761,720
2001 3 207,463 319,915 802,268
2001 2 246,285 330,163 699,893
2001 1 167,988 328,881 761,216
2000 4 161,842 311,362 750,356
2000 3 150,061 311,648 847,138
2000 2 153,385 291,561 786,275
2000 1 141,228 277,425 708,259

So I see:
Studio prices flat
One BR prices flat
Two BR prices down

Volume down big time:

QTR Studio 1 BR 2 BR Total
2011 4 196 374 283 853
2011 3 258 449 499 1206
2011 2 219 550 464 1233
2011 1 235 575 480 1290
2010 4 171 480 372 1023
2010 3 162 506 486 1154
2010 2 189 478 366 1033
2010 1 172 440 351 963
2009 4 297 532 276 1105
2009 3 242 353 259 854
2009 2 144 302 192 638
2009 1 108 165 109 382
2008 4 253 378 306 937
2008 3 333 544 395 1272
2008 2 347 424 404 1175
2008 1 313 320 319 952
2007 4 423 415 370 1208
2007 3 337 758 603 1698
2007 2 333 557 596 1486
2007 1 309 619 724 1652
2006 4 295 525 539 1359
2006 3 207 374 428 1009
2006 2 132 294 327 753
2006 1 193 352 326 871
2005 4 187 294 314 795
2005 3 230 416 393 1039
2005 2 218 431 424 1073
2005 1 219 445 461 1125
2004 4 252 436 455 1143
2004 3 316 529 524 1369
2004 2 216 460 498 1174
2004 1 239 417 474 1130
2003 4 203 639 622 1464
2003 3 283 511 686 1480
2003 2 238 514 577 1329
2003 1 221 448 484 1153
2002 4 281 478 540 1299
2002 3 320 521 611 1452
2002 2 321 592 738 1651
2002 1 192 504 556 1252
2001 4 253 495 541 1289
2001 3 206 390 605 1201
2001 2 159 228 449 836
2001 1 192 442 450 1084
2000 4 385 471 568 1424
2000 3 272 530 425 1227
2000 2 214 457 468 1139
2000 1 231 544 555 1330

Well as usual our resident numbers guru paints a very clear picture via clean data. I think you will all find this very helpful and interesting. Only problem once I get on the site I can get sucked in to all the chart porn till my head hurts. This type of data, careful analysis with my street experience and commission rebates is a potent brew for my clients.

http://urbandigs.com/2012/01/checking_in_on_manhattan_price.html

Keith Burkhardt
The Burkhardt Group
http://ubivoletaudentunicornium.blogspot.com/

W67: you're right about Times, but I wasn't so wrong. It said median sales of $855K was down 1.2% from this time last year, "but up from the bottom in 2009, when the median hovered around $800,000." As for rest of what you said, I don't understand. Too clever for me I guess. I'm a simple guy. But maybe you can explain what you think we're doing wrong. I bought in 1988. My husband bought in 1997. I sold at a 400% profit in 2007. My husband sold at about a 300% profit in 2007. We used some of that money to buy a slightly larger place better suited to living together. We used some profit to gut renovate. We used a bit of profit for our wedding and to have some rainy-day cash on hand. All the rest went to retirement savings. Now live in the perfect apartment in a AAA location in a solid building that we are very happy with for monthly costs equal to what it cost to live in the comparable (albeit prewar) apartment we rented during the reno process a block from our apt. Our costs are fixed for 29 years but for maintenance increases, of course. We continue to live within our budget, consistent with a long-term financial plan for retirement and savings.

Since about all I can decipher from your post was that it was critical, I don't see what you think we ought to be doing differently that would better serve us. I think we're doing pretty darn well in terms of NYC RE.

There's no inventory because we're in a stalemate. Most sellers know they won't get the prices they want, and most buyers aren't willing to come up either. Throw in the current absurd rents vs. fact that buying now is pretty tough in most coops unless you have a lot of loot, and who knows what will happen. Maybe nothing; could be the case that sales volume will remain low until people get more comfortable that their jobs/income feel more secure.

kylewest--basically, you timed the biggest real estate bubble in US History really well. Good job. Of course, your experience isn't going to match the vast majority of people's experiences going forward, and there's some reason to believe that prices may decline more in the future. Probably not to the point that you'd lose money relative to your 1997/1998 investments, but this will be of small consolation to people entering the market for the first time.

The big winners in this market are the ones who bought in 97/98 and refinanced at 4% today.
And those people shouldn't feel cocky about it, it was just a matter a being at the right place at the right time.
Now, Generation X , screw yourself and blame your parents or the baby boomers who ripped you off dry!

I have a good job at a firm not on Wall Street, but that depends on Wall Street to stay afloat.

I have finally saved my down payment for an apt! Yay!

It took me several years to do it. I want to buy a large one-bed or small 2-bed in bklyn, probably in Windsor Terrace or Clinton Hill. (Would consider Ditmas or Fiske also.)

But I am not seriously looking, because it's clear that prices have not stopped falling.

Now I don't need to feel that prices have hit their bottom -- I am not greedy or paranoid, at least not more than the average New Yorker.

But I do need to feel that prices are going to be relatively stable for the next five or six years -- that's the amount of time it took me to save my equity. I am not willing to buy now and find that if I have to sell in three years, say, I will lost most of my down payment.

In contrast, if I continue to rent, and apartment prices swoon, I will still have a fat savings acct. So renting looks much safer.

So when will I be ready to buy? When unemployment settles down and when prices hit a more or less stable range for at least a year or two.

So I'm a qualified buyer who is not going to buy in 2012 and probably not in 2013 either.

I will add that I fully expect prices to become more and more and more bifurcated, trifurcated, multi-furcated....in other words, prices on Central Park West might not move much over the next 12 months, but in Windsor Terrace they could come down another 15% or 20%. I think the city is gonna become a patchwork quilt of pricing trends.

i don't get it. first, its my home and i love it. then, its a great investment.

there was a time that both could be true. no longer.

congrats to any and all that have the money to buy a great place and don't care about possible loss of principal. but please stop adding about how its a great investment because of previous investment gains. that makes no sense.

i drive a relatively expensive car because i choose to and can. there is absolutely no way to claim that it makes financial sense. i have friends that think its stupid to have this car and i agree with them.

--But I do need to feel that prices are going to be relatively stable for the next five or six years -- that's the amount of time it took me to save my equity.
---In contrast, if I continue to rent, and apartment prices swoon, I will still have a fat savings acct. So renting looks much safer...

This is exactly why you should wait. And, Why so many people are. The Trend is down. It will take a while for the RE bubble to deflate. if you buy in 3 or four years it(prices) probably still will not have bottomed out, but you are getting paid to wait and see.. No urgency to buy for a long time.. my thoughts-- and they have been right on!

For the 1000th time, I will say again that purchasing RE in NYC at this time is for people who:
(1) have a long term time horizon...10 years+
(2) can do so consistent with a reasonable and prudent budget based on current and conservatively projected income along with an ability to weather some rainy days along the way
(3) can do so consistent with a long term savings strategy and financial plan for retirement.

If you meet these criteria, buying may be right for you depending upon what you want. For us, the value of a customized home and the stability that owning offered meant a lot. We also weren't finding rentals of the quality and layout we wanted within our price range. We hit the markets right in the past (mostly by luck, but selling in 2007 was a very conscious decision to beat what we thought was in impending tsunami of ruin and we were correct) and it made much of this easier. I only share our experience as an example of people for whom buying made and makes sense. We are not the only profile, obviously.

But I agree that buying is not for most people right now--particularly first time buyers for whom market movement has a greater impact. Once you are in the market and plan to stay, volitility means a bit less since selling in a dip is counteracted by also buying in the same bear market after the sale.

So this is the latest update on Manhattan Real Estate from my agent. No mention of 12% down anywhere. Interesting...

MANHATTAN Overall Market

Average Sale Price - $1,445,484 Down 1.3 % from 2011 3rd Quarter

Average Price per Square Foot - $1,117 Down 1.2% from 2011 3rd Quarter

Listing Inventory 7,221 Down 6.5 % from 2011 3rd Quarter

Average Days on the Market 130 days – up 9.2% from 2011 3rd Quarter

Listing Discount (from last list price) 4.9%

COOP Market

Average Sale Price down 7.7% comparing to 2011 3rd Quarter Listing Discount 4.8%

Number of sales down 24.4% from 2011 3rd Quarter

Days on Market 117 days, 14 days more than 2011 3rd Quarter

CONDO Market

Average Sale Price up 7.1% from 2011 3rd Quarter

Number of sales up 11% from 2011 3rd Quarter

Listing Discount 4.9 %

Days on Market 149 days, up 18 days from 2011 3rd Quarter

I guess its your first RE lesson newbie. don't believe everything your broker tells you.

Brooks2: What's your story, you seem like you're waiting for some big bargain to come up. Ain't gonna happen. The economy is picking up, unemployment down, spending up, a couple of years from now you'll be talking about how you missed the bottom. LOL.

P.S. I'm one of those lucky ones who bought in 95, those were real bargains.

I don't think so

still plenty of air to come out of the bubble.. Incomes down, taxes up, storefronts closing(went to a local another local restaurant last night to find it OOB) financials getting crushed, employment bad, budget deficits, continued, WS layoffs, financing difficulties, Euro Collapse , china recession, Iran spouting off, Gridlock in Congress, Election year with no candidate to oppose Obama. So income distribution..need I go om I little bullishness does not make the year..

Good for you if you bought in the city in 95' I did not live here then. I don't plan on buying here. its a suckers investment to buy now or in the near future..

This still seems to be happening--from 3 months ago-- from 3 years ago STILL DEFLATING!!!!!!!

http://streeteasy.com/nyc/talk/discussion/2651-where-are-all-the-idiots-who-made-the-2007-doomsday-predictions?page=16

Skip back a page. It's very interesting to see what people were saying three years ago
>>dco Tony- Nothing has changed? lets see.

1. Prices are dropping ----- TRUE
2. Areas like Harlem can't move units ------ TRUE
3. New developments throughout the city have slowed and are reducing price --- TRUE
4. Line around the block to buy are non-existent ----- TRUE
5. Dow is just above 12,000 (down from 14,000) --- Well a lot LOWER- under 11,000
6. Unemployment went from 4.5 to 5.5 - --------- now 9.1
7. Collapse of Bear (was in business for 85 years) ---- Lehman,
8. Every financial stock (except GS) is down 50,60,70 or 80% -- no GS is under $95
9. Wallstreet layoffs in the tens of thousands ---- Still laying off
10. The dollar is devastated -- ~76.7 $/yen
11. Commodities Thru the roof ----- well, flawed logic here-- but gold is ~1600 an once(up from ~$700
12. Inflation/stagflation ----- borderline deflation-- FED initiating QE3 or operation twist
13. Worst housing crisis since the great depression. ----- TRUE
14. IB's basically stopped lending money. ------ TRUE
15. Regional banks closing daily. ----True 73 banks have closed ytd 2011' most recently CBNC
16. Tighter lending standards. -- True- addtionally- Fnam/fredie back enforcing lending guidelines fro Condos/Coops in
17. High Inventory -- higher inventory- large shadow inventory

I could be here all day. All of this in the last 6 months. I laugh when people said that big wallstreet bonuses fueled the housing boom in Manhattan and now that bonuses are going to be non-existant it won't have an effect in the future. The tide has turned in the last six months and just because real estate is not being given away doesn't mean the wheels aren't in motion. Real estate is not a liquid asset, it takes time for the market to react. The only way I see this being stopped is wallstreet re-hires and gives the huge bonuses like past years.

Oh and most importantly, all of this occured even with the Federal Gov't Bailing out Wallstreet. Without the discount window, well I don't even want to imagine how bad things would be. If the next six months are anything like this, the economy will take years to recover.

Wow-- what will it be like in another year.. everything this guy said three year again is true, but worse!!!!!

I've working for a Wall Street firm since 2004 as a Trader, the prospects for bonus and compensation has never been this low as this cycle. Even in the height of the Lehman collapse in 2008-09 compensation levels were higher for Finance professionals. I don't this trend is about to reverse soon, in fact Finance professionals will probably go through a multi-year decline in overall compensation and definitely in the cash portion of the payout. This would be deflationary for the Manhattan property prices, the market for rental income should be strong for the next few years though.
And about real estate agents, sorry all you nice folks out there but I never met a broker who told me that it was ever a good time to sell. They always tell you its a good time to buy, so I can't attach much credence to the broker commentary.

P.S. the ones who sold in 2007 are truly, absolutely lucky.

P.p.s. those who bought in 1995 and sold in 2015, not so lucky.

w67thstreet: "P.p.s. those who bought in 1995 and sold in 2015, not so lucky."

In 95 bought for $163 per sqft, you won't see that again in a doorman building in Manhattan, not even in 2015! LOL.

dirty ape's point is that $500psf / $163psf = 3x return in 20 years.

What did you buy for $163 ppsf in 1995? Could you get anything other than coop studios in secondary locations at that price back then?

RealEstateNY, I agree with you (and the countless others) who purchased outside of 2007-2008, that owners are faring well.

How unintersting would life or this board be if everyone actually agreed? If you have the cash, you'll have reason and qualify to buy.

"dirty ape's point is that $500psf / $163psf = 3x return in 20 years."

17 years not 20 and apartment currently goes for $800 psft, 4 plus times return on a minimal down payment. You won't find returns like that in the stock market.

"What did you buy for $163 ppsf in 1995? Could you get anything other than coop studios in secondary locations at that price back then? "

Co-op in Midtown, 2 bedroom/2 bath, doorman.

huntersburg: BTW if you can find a midtown Manhattan co-op with a doorman for $500 PSF, let me in on it, I might be interested! LOL.

Hey LOL, how much is the psf on this? lol

http://streeteasy.com/nyc/sale/516990-rental-410-e-57th-st-sutton-place-new-york

02/16/2010
Previously Listed by Akam Sales and Brokerage at $895,000.
04/26/2010
Listed by Akam Sales and Brokerage at $895,000.
05/20/2010
Price decreased by 6% to $839,000.
06/29/2010
Price decreased by 5% to $799,000.
08/11/2010
Price decreased by 1% to $795,000.
10/01/2010
Price decreased by 7% to $739,000.
11/10/2010
Price decreased by 5% to $699,000.
12/27/2010
Listing is no longer available.
01/06/2011
Re-listed by Akam Sales and Brokerage.
03/29/2011
Listing is no longer available.
05/29/2011
Listing entered contract.
06/22/2011
Re-listed by Akam Sales and Brokerage.
08/24/2011
Delisted by Akam Sales and Brokerage.
10/04/2011
Price increased by 7% to $750,000.
10/27/2011
Price decreased by 4% to $719,000.
11/15/2011
Price decreased by 3% to $699,000.
12/10/2011
Price decreased by 3% to $675,000.

I love the price consideration above...
Q. Whose the broker?
A. The inky dinky spider

~550 PSF for a 2 bed/2bath in midtown. and prices are coming down. By 2015 i am sure it will be lower. LOL

"Hey LOL, how much is the psf on this? lol"

You have to do better than that! LOL!

Here's your answer;

Market Data
5 active sales listings:

$873 per ft² (avg)

18 previous sales listings:

$824 per ft² (avg)

35 recorded sales:

$836 per ft² (avg)

Here's a real 2 bedroom in the same building, check out the price per sqft.

http://streeteasy.com/nyc/sale/603124-coop-410-east-57th-street-sutton-place-new-york

If we're going to use Brooks2's listing as a floor, then let's take the listings at 15CPW as a ceiling then average them out using the average as the per square foot price for 2012. Fair?

Most Sutton buildings sell for a slight "discount" because of their extraordinary liquidity requirements (you generally have to have a great fraction or multiples in cash just sitting in your Chase account) and the minimum down is 50 or greater. 410 East 57th Street is 50 down.

ok, its been on the market for 256 days has had one price drop and the CC of $3500.. GOOD LUCK closing that deal.. hah!

$187psf. Could've sold at $1000psf and earn 10%/yr or $100 psf for eternity. And since it only cost $30psf to rent a comparable place, you get something called 'compounding' on the other $70 interest. In 5 yrs, you can buy back your old place for $500psf. And be very very smart... Accentuate the 't' in smart.

RealEstateNY, thanks. What was your maintenance back then vs now, on a ppsf basis?

w67thstreet: "In 5 yrs, you can buy back your old place for $500psf. And be very very smart... Accentuate the 't' in smart."

What's your crystal ball say about the 5 year result of the stock market, this years superbowl and tomorrow's horse races! What and a**!

"you still live in the same pos 'home' purchased in 16 yrs ago."

When you're lucky enough to fall into a very comfortable home at a ridiculously low price, in a place where people are dying to live, i.e. Manhattan, you'd have to be nuts to leave.

"And btw, 'how' much richer r you than every other ninny that bought before you let's say btwn 1980 to 1990 at $50psf?"

If you knew anything about the NYC real estate market, you'd know prices crashed after the late 80's and it took 10 years to get back to the 80's peak. 1995 was virtually the bottom of the market.

"A guy so stuck in his shitty job."

Who needs to work? I let donkeys like you get up in the morning! LOL!

"Tell me you won an Olympic medal in sailing."

You're impressed by that?? Yawn ........zzzzzzzzzzzzzzzzz1

5 active sales listings- all over priced over $850 psf-

1 in contract ~ $550 psf--

who is the dope that thinks their apartment will sell at 930 psf with $3500 cc?

look in the mirror!

Graffiti - "I think the city is gonna become a patchwork quilt of pricing trends. "

I think you may be on to something here..and Im attempting to build a system to allow you to track this kind of theory. Expect to launch Manhattan sales analysis system in April/May..hopefully you try it out when it goes live and tell me what u think

Graffiti,
Don't be fooled all boats raise and fall with the tide.
In some places, like some inventories, the harbor is shallow.

News flash for billionaire russian oligarchs.

Apts desired by bitchy daughters of Russian billionaires goes up. - credit goes to UD new market patchwork analytics. $5/month extra subscription fee.

its very simple, every bldg is its own little marketplace...that is at least what the data is showing. Yes there are broader market trends (i.e. Manhattan condo market) and submarket trends (i.e., the UES Classic 6 coop market), but if you break down every bldg trend, its all over the place

not in RE where the old axiom will come true. location, location, location..... put another way the dinghy will not be raise with the yacht

& midtown co-ops are the dinghy's

Brooks2: "midtown co-ops are the dinghy's"

They may be dinghy's but it's great to be in walking distance of Rock Center, Grand Central, the theater district, Lincoln Center, Saks, Bloomingdales, MOMA, movies, great restaurants, and every service from banks, candy stores and everything in between. Not to mention being situated between 2 great medical centers, NY Cornell and NYU.

I'll take that dinghy any day of the week. I'ts not only about appreciation, you have to live there too!

inonada: Maintenance went from $1.16 psqft to $1.89 psqft in 17 years, about 4% per year.

This sort of reminds me of some earlier days in NYC real estate, each building certainly was it's own market place and more importantly each neighborhood was it's own island, so to speak. There were appropriate discounts from square block to block; avenue to avenue.

As the bubble inflated the market place became much more homogenized to the point there was not even any significant allowance in price for condition or view!

Today you can find significant price differences from building to building on the same block; especially in the prime Village neighborhoods. Lack of quality inventory remains the biggest challenge for a buyer today.

Keith Burkhardt
The Burkhardt Group

RENY.
That's fine but ME's prices are dropping the fastest. RE is about Location. And ME is clearly not the location. It's depreciation the fastest in Manhattan. As W67 says here come $500 PSF!!!

We'll see. If prices reach $500 PSF, the city, state and probably the country will be in a depression they'll be plenty more to worry about than the price of real estate.

It would be like 1998 all over again. The horror.

please explain how a cheapening of NYC RE would necessarily coincide with a depression

We'll the only way NYC real estate would crash (and $500 a sqft would qualify as a crash) would be for the city's economy to crash. If the city's economy crashes, the state will be right behind it; since the city and it's immediate surrounding counties like Westchester and Long Island (their real estate would suffer the same fate) make up the bulk of the states revenue. If all of that occurs, do you think things will be rolling along in the other 49 states when the country's premier city is in an economic meltdown.

On the other side of the coin, cash will be king and I'd scoop up another Manhattan property as either a primary residence or investment property.

There's a bright side to every scenario!

it was said that there was a recession in the US in the past 2 years, though we never seen a drop in manhattan RE market.

so the question is, is manhattan RE immune to recession? or it is just lagging?

does anyone remember the last down turn of manhattan RE? was it behind the national trend for couple years or so?

The last downturn in Manhattan was 2009. It just wasn't as sharp as elsewhere, due in part to the fact that it was the primary beneficiary of bailouts and QE1 and 2. If you haven't seen a drop, you haven't been looking too hard. Now the general economy in the US seems to be picking up jobs, while Wall Street is shedding them, so we'll see how that impacts it in 2012. From the OPs on this thread it has already started heading down again.

So 500 psg is a crash and 550 psf is not?

Midtown east is trading @550 psf, lol

Wow ReasEstatedinFkLand got an apt that is near:
Rock Center, Grand Central, the theater district, Lincoln Center, Saks, Bloomingdales, MOMA, movies, great restaurants, and every service from banks, candy stores and everything in between. Not to mention being situated between 2 great medical centers, NY Cornell and NYU.

Yep, my non depreciating rental is btwn Columbia Presby and NY Cornell... .oh the HORROR of being NEAR CENTRAL PARK! versus SAKs... hmmmmm... run in the park vs. go shop for prada shoes....
skate a wolman versus look at funny art at Moma
be a pretentious dick w/ a herd of donkeys and live in a 2bdrm or rent and own a yacht?

Hmmmmmm......

Fuuny., when some dumbass re broker wanted to sell a property they would always say, "RE will be up because of wall street bonuses". Now not only are bonuses down, but WS is laying off, we have the same stupid brokers saying it can't go down or we will be in a depression. What a idiot you are RENY, lol. Hahah

What up brooks2 or 3 ;)

Bonuses are down this year end.
My RE broker told me that this might be my last chance to get a deal before the economy and stock market fully recover.
Buy now or be priced out forever!

W67th: Big earner like you doesn't need a mortgage or real estate tax write off? Keep paying your 70k yearly rent, yes that's what a 2 bd/ 2bth rental costs in a midtown doorman building. The landlord will be happy to keep increasing your rent, over a 17 year period you'll pay $1.4 million in rent, sounds like a plan. LOL!

Brooks2: Where are all your examples of $550 per sqft sales. You came up with one pathetic example that was a joke. Keep waiting as life passes you by, you're like the guy who wants to buy a stock at the absolute low and sell at the absoulte high, doesn't happen except by luck! Jump in there and live life instead of looking at it. Hope you got that rent check in the mail on time. LOL!!

Bye, Bye, LOL!

RENY, tell me what you think about this place. It's a 1210 sq ft true 2/2 that was listed for sale at $1.275M (originally $1.4M), with monthlies of $2K. Or you could rent it for $4K. Would you really pay $1.275M, or maybe a bit less, to save $2K a month, not to mention the $120K in transaction costs?

550 PSF was the last sale-- the example you showed are priced to high and can't sell. I just happened to know a good investment when I see one. Buying RE in NY is not a good investment. Again best of luck trying to sell your apartment at the inflated price.. I've heard that, "come on in .. the water is warm" pitch too. Misery loves company! You know RE's a bubble in a right now.. but you own and unfortunately there is nothing you can do about it except hope it does not continue to go down. Fortunately, I am not in your situation. LOL-- haha..

Links:

http://streeteasy.com/nyc/sale/581229-condo-140-east-56th-street-midtown-new-york
http://streeteasy.com/nyc/rental/825095-condo-140-east-56th-street-midtown-new-york

malthus, are you an RE agent?

i don't think many people agree with you that a 2% fluctuation from the historical peak will be a called "downturn"

NYRE $psf fell 40-50% from late 88-91, following (by about 1 year) the 87 stock crash and attendant wall street contraction---no "depression" of any sort; local, state or national

sounds like the usual broker tripe about "if NYRE goes down hard, that will be the least we need to worry about"

NYRE is not well-correlated, often, to national economic circumstances, and other US real estate markets; and could easily reprice further based on local economics

inonada: You're asking the wrong person, I think everything is overpriced. LOL!

Your example seems overpriced considering it's basicly unrenovated & would probably sell for about $1 million. The rental price seems reasonable & should rent at that price, it has only been on the market for a few weeks at that price.

Keep in mind that a 1.2 mil mortgage at 4% plus 2k in maintenance comes out to about $6,700 per month. About $4,300 can be written off on taxes. Based on your tax bracket, you might save 2k or more each month bringing the actually monthly outlay much closer to the rental than it initally looks.

Keep in mind that if you rent, you have to live with the bathrooms, kitchen, floors, air conditioners, etc as they are. If you buy, you can renovate as you like over the years.

If you believe that there will no appreciation over the next 10 years, than it never makes sense to buy. JMO.

"Keep in mind that if you rent, you have to live with the bathrooms, kitchen, floors, air conditioners, etc as they are. If you buy, you can renovate as you like over the years."

Why? I'm sure if you were willing to pay for them (which you'd have to do if you owned), your landlord would be more than willing to work for you to improve the apartment. :-)

I can't take credit for this one

"Point: there are stubborn, foolish people out there and some are fed by silly brokers. When looking for a place to buy, you have to just accept that if a place is priced incorrectly, there may simply be nothing you can do about it because you aren't dealing with a rational seller or a seller for whom it is even possible to negotiate because they are in a financial hole and this can be compounded by a less than stellar agent's advice." KW

jordyn: Your not going to find to many renters willing to install new kitchens and baths in a rental with a lease that generally runs a year or two. Also once the lease ends, the landlord would increase the rent to reflect the improvements. No it just doesn't work. When you own, the improvement increases the value of "your" property regardless of the state of the market.

inonada: One other thing, never rent from an individual owner. The rents are generally less expensive, but you live at the whim of the owner. He can decide not to rent to you again after your 1 or 2 year lease expires, it can be difficult to get repairs done, he can raise your rent through the ceiling at lease renewal.

Things are much more stable in a professionally managed rental building as opposed to renting from an individual co-op or condo owner. JMO.

RealEstateNY : There are certainly renters who have worked with owners to collaborate on improvements as part of locking in long-term leases. That's totally reasonable and doable, and probably less expensive than doing the improvements on your own.

The rest of your response actually demonstrate an advantage to renting, though: if you get sick of your kitchen, you can just move to a new apartment with a nicer one.

I'm sure your example has been done but it probably represents less than 1% of the rental market.

If only moving and finding a nicer apartments (at affordable prices) were that easy in Manhattan doormen buildings which is what the conversation was about.

Flmaoz. Had one seller of a Beneteau 40.7 say to me. 'if you don't pay my price, I'm gonna list wit a broker and then you'll have to pay his 10% commissio on top of my price' Being w67, I asked what kind of a professional are you? -I'm a re broker- :)

Just saw it listed at my bid a year later. $150k self negotiated down and yes it's with a brokerage, so the schmuck is down $150k plus 10%. And I already have my boat so good luckz.

To reny. Yes I cry myself to sleep on the $30k and tax savings a year. But if my plans pan out, my $1mm saving on my C7 compounded at 5% for 24 yrs will 'afford' me the assets to worry about the $10mm estate taxes. Every burger flipper can take advantage of mortgage deduction. It's like being proud of being able to wipe your own azz.

I can become a snobby Mortgage deducting fool anytime.

Takes a special fool to wait out the greatest re bubble popping. I'm basically taking a $1mm away some fking overleverged idiot that bought a c7 for $4mm in 2004-2011. For some idiots I'll take $2mm. And you know who you are. Foolz.

w67: Keep those pipe dreams alive! LOL!

What a pompous a**!

RealEstateNY: You just need to follow inonada's postings on here to find tons of examples of rental apartments that rent at a significant discount to purchasing the equivalent unit. If you're willing to rent from individual owners, it certainly opens up a lot of options along your nice, doorman, reasonably-priced options. In the markets I look at, there seems to be roughly equivalent amounts of inventory in both categories at any given moment.

Wbottom reports that NYRE $psf fell 40-50% from late 88-91, following (by about 1 year) the 87 stock crash. does it include 5 boroughs or just manhattan RE?

the things is we never really had a stock crash so far since RE peak in 2007

This is problematic as well;

"Revenue from taxes on property sales in New York City has plummeted, to $982 million in 2010 from $3.3 billion in 2007, making budgeting extremely difficult, Bloomberg reported."
http://therealdeal.com/blog/2012/01/05/transfer-tax-revenue-has-dipped-more-than-2b-since-2007-report/

2011 is probably higher but how much? $1.3b?
At what point will NYC prefer frequency of sales to price of sales?

to consider the ability to renovate an apt one owns to be an advantage is dumb, unless you like throwing money away

renovations are expensive, esp in NYC, and, whether youve destroyed a renovation in the process of living in a space, or it's merely gone out of date; when you sell after your 10 years in your apt, any buyer will price that your apt needs renovating--figure as much as 40% of face to be value of recent renovation--just another dent in the cheap suit of the "it's cheaper to buy" fools/key sherpas

renovations are comsumption items---mine is provided free by my LL, who did a pretty decent job, prior to my moving in

Then why are we layig off so many bankers?

@reny. Ya wanna see the size of my little sailboat? Flmaozzz.
Pipe dream contest! Awesome.!!!!!!
1) $1mm portfolio of 50% laddered treasury strips, 25% growth stocks (eg apple) and 25% div stocks (eg coned) => $2.8mm in 21 yrs at 5% yield.
2) $1.4mm 2bdrm midtown condo => $3.8mm in 21 yrs.

Which is a bigger pipe dream?

Who wants to buy my $3.8mm 2bdrm within walking distance to MOmA? Hahajjajajajajanas. I'm gonna pee

RENY, someone buying a $1.2M place has income that puts them above AMT. So none of that $1900 in monthlies is tax deductible. On the loan at 4%, only the $40K in interest on the first $1M is deductible at 28% Federal, plus around $25K at 7% on state/city. So about $1100 a month in deductions.

So if you buy and borrow $1.2M at 4%, you spend $1900 in monthlies, $2900 in interest after-tax, and $1000 to amortize transaction costs over 10 years, so $5800 a month. Figure in another $700 a month to maintain constant condition on the place ($70 a sq ft over 10 years), you're looking at $6500. So $48K a year to rent vs. $78K a year to borrow & own.

Do you figure this place has $30K a year in appreciation? On the one hand, 2.5% a year is inflation-ish, so not that crazy. On the other hand, the math is all being supported by 4% mortgages that are explicitly being supported by govt policies for this express purpose. A move to 5% mortgages increases the cost of capital by 25%, eating up a decade of 2.5% inflationary increases. So if the rosy scenario is that we continue with 4% mortgages and 2.5% inflation forever, just to break even, what's the point?

"inonada: One other thing, never rent from an individual owner. The rents are generally less expensive, but you live at the whim of the owner. He can decide not to rent to you again after your 1 or 2 year lease expires, it can be difficult to get repairs done, he can raise your rent through the ceiling at lease renewal."

I completely disagree. I have a 3-year lease with a one-sided option to break on my part, with 3% increases pre-negotiated. Repairs are done instantly (happened several times), managed by a third party. Normalized to a $1M price, I pay $2500 in rent whereas just the monthlies on the place run $1250. And that's with a pretty conservative assumption on the sales price of the place, BTW -- it would not be implausible that someone would pay 25% higher than what I assumed.

iononada: You mean to tell me you're are paying $2500 for a 2 bedroom/2 bath in a doorman building in Manhattan? You do have a great landlord!

Hope you plan to move out at the end of your lease, the landlord might decide to sell and/or give you a huge rent increase.

"someone buying a $1.2M place has income that puts them above AMT"

Not necessarily, lots of people have high net worth but an income that falls well below the AMT.

Every case is different.

w67: Hope you realize your 2.8 million in 21 years will be worth 1 million in today's dollar.

You still won't be able to buy a 2 bedroom apartment. LOL!

All hat and no cattle!

RENY, I don't have exactly that. I'm saying the rent I pay is $2500 per $1M of apt price. I got this place a year ago, could've done a 5-year lease if I wanted (the LL has no intention of selling) but I prefer mixing things up -- for me, life is too short to forsake the chance of different experiences. FWIW, with previous places I was renting from individuals, renewal increases (not pre-negotiated) were perfectly reasonable even during the height of the market -- 3-4% for several years up through 2008, followed by a 20% drop in 2009.

Did you really post this last one RENY??

Think of what you just wrote.

> (1) have a long term time horizon...10 years+
> (2) can do so consistent with a reasonable and prudent budget based on current and conservatively
> projected income along with an ability to weather some rainy days along the way
> (3) can do so consistent with a long term savings strategy and financial plan for retirement.

This could all be true, and it still might be a very bad idea. This says you can afford it.

That doesn't mean it is a wise use of money. One should compare the actual costs to other options.

"Not necessarily, lots of people have high net worth but an income that falls well below the AMT."

Your problem is this. Suppose the income of this person is, say, $150K so that the purchase is below AMT and therefore the $950 in taxes is deductible at 28% - $266. On the loan side, the person would be approved for no more than $500K (which works out to $2400 in mortgage plus $1900 in monthlies, for $4300 housing payments, or 35% of gross income). So $266 would be gained in terms of deductions on the tax, $550 would be lost in terms of deductions on the interest, leaving only $816 a month in tax benefits.

So yes, it's easy to say "Every case is different" and hope for the best. But if you actually analyze the cases, I don't think you'll get anything better than $1100 a month in tax benefits.

Can you think of a case where you would? The one situation I can think of is if you first got the $1.2M loan with the assumption of a $300K+ income, but then your income drops to $150K. Then, you'd have your $1100 in interest deduction benefit and your $266 in property tax deduction benefit. Of course, your take-home paycheck would be $7500, not even covering your $7650 monthly housing nut.

Renting 1M of apt for $2500 is a great deal. If that deal is really out there then buying does not make a lot of sense.

I disagree that amortization should be included in buying "costs." I think it should be pulled out as the owner is likely to get that money back if and when they sell.

I don't have all the new data yet, but overall median seems to be down 5.5% QoQ per Miller Samuel... which brings us back down to 16.6% below peak.

That is actually as bad or worse than any point in 2010... and about the middle for 2009.

"I disagree that amortization should be included in buying "costs.""

I simply include it as it's a known quantity, and you can use it to get back to a break-even target for when the apt is sold. The transaction costs are pretty well-known a priori, the loss/gain is not. Why convolve a known with an unknown?

Well there are a lot of unknowns in comparing rent vs buy. Amortization is commonly excluded from costs in financial analysis.

football: the reverse stone pass
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