Slim pickings

Blame the weather.

I think it's deeper than that. A good chunk of "average" inventory replenishment took a big hit by way of the serial movers for profits on to other forms of income.
A substancial amount of "flippers" have nothing to flip.
7000 is the new 9000 (inventory)

Prediction:stale market at least until elections are over.
Nobody knows what their healthcare or taxes (even job security) will look like in a year or 2.

Yeah, I would think that with the market getting hotter (or at least warmer) as all the brokers try to tell me, side-line sellers would want to take advantage of the de-thawing and sell? Only seeing same old stale listings and very slow movement. Some taken off and re-listed...

Any predictions on how much new inventory will hit the market in 6 months or so due to:
1) Bank foreclosure deal?
2) Programs at Fannie, Freddie, FHA?

I'm a downtown owner who ponders selling pretty often. To be perfectly honest I would love to sell now because I'd like the cash for something else -- but I am not going to put it on the market until prices come up. I am sure there are plenty on this board who will laugh and say that will never happen in our lifetime, but I'm not quite so pessimistic. In the meantime, I will sublet.

I do not know what I will be eating in 12 months, but I do know nyc re prices will start doing the drift down to Pre Bubble prices.

Can I sublet your apt. It's my short position to your long. I will take my pot of gold and invest in sprint. I will double my money while you pray for the bubble windfall.

If you want to win the lotto, you better play the lotto. Re ain't lotto. It was until 2007.

I love it. The more sublets, lower the rents. The higher the risk of rising interest rates. Which all lead to => lower purchase price

Flmaozzzz

Economic recovery (and financial market performance) may allow people the freedom to take more economic risks than they were comfortable doing six months ago.

I wouldn't underestimate the psychological and financial implications of the recent market moves. We may see more listings this spring than we had in past selling seasons.

if you were thinking of selling is there a better moment this year than now.

yes, I can see it now, "your 401k is up, why don't you borrow against that".. lmfao

it was not the the stock market that propelled RE higher during the bubble, it was easy financing, and exotic mortgage products.. don't kid yourself. Income's are still going down, so is RE.

heisenburg, From your previous post, it seems that you are looking for a 2 bed apartment in prime downtown. These has been a lack of such inventory for years unless you want to live close to west side highway, North/West Tribeca below Canal or West Chelsea. It will take you some time (6-2year) to find what you like at the right price. I do not mean a deal by the right price as they do not exist in prime downtown. Of course, by talking about shortage you are making the bears angry.

Angry. If it wasn't for the 'hide the salami' underwater prepaid renters I wouldn't be up $70k on my sprint trade in a month. Flmaozzzz. That's 16% up. Oopps. Forgot to net out my $20 transaction cost.

Mercer if you buy it bf Heffenburger than you could sell it to him for a higher amount as there are only 2 apts left worth buying. You'll corner the mkt... The ole silver squeeze, eh? Hide that salami. Now you see it... Some lube. now you don't! Shazzaam.

Falco - I agree if I were to sell this year, I should have listed already because I know there is a huge lack of inventory downtown. But I have decided to be patient for once in my life and I *think* it will pay off in the long run - prices have started to rise in my building which I mostly attribute to the inventory situation. Its certainly not easy being patient, though!

w67, will you confess that you are a complete idiot if the prices at the end of the year are higher? If your argument like Nada buy vs rent for high-end properties, I understand but perma-bear??

ill take that bet 300. confess you are a complete idiot if px's are lower at the end of the year. you're on!

brooks, you do not matter as I am not sure you can afford to buy what you would like. W67 clearly can. I already have the bet with real money as I recently purchased an apartment.

humm, and you draw these conclusions how?

post was addressed to w67.

300_mercer, why wait until year-end? For the last 12 months, normalized to a $1M purchase price, here's my story using your favorite form of financing (35% using 3.25% 5/1 ARM and hoping for the best):

Rent:
-$30K rent paid
+$35K return on downpayment (per SPY)
-$1K transaction cost amortization

Buy:
-$15K cc & tax
-$21K interest
-$20K capital loss (per SE condo index)
-$5K upkeep / reno amortization ($150K over 30 years)
-$10K transaction cost amortization (8-10% over 8-10 years)
+$5K income tax benefit

So renting was net up $4K, versus buying which would have been net down -$66K. A difference of $70K per million. That's a 20% loss on the $350K per million of downpayment. Yikes!

nada, two issue which we have discussed many times before.
1. Not every one has comfort to invest every thing they have into SPX. What is you bought financials even last year when XLF was $17.
2. You may be renting a very high end property to afford $2.5 rent per mm per month.
3. Rent is closer to $4 per million. Say you rent a nice (no special view, no brand new luxury rental) 2 bed room rental with doorman in a good location with 1100-1200 sq ft space (reduce at least 10% from the rental listing as rental listing tend to inflate sq footage more than sellers) for $5-5.5K month. The same place will cost you $1.2-$1.3mm. Let me revise your calc in the next post.

>-$30K rent paid
>-$15K cc & tax

Commons and tax are 50% of rent?

>+$35K return on downpayment (per SPY)
Or if this was 3 months ago, then with the S&P entirely flat for 2011, should we recalculate some other scenarios?

>-$1K transaction cost amortization
Is this the 12% broker fee?

>-$20K capital loss (per SE condo index)
Ah, so basically the overwhelming majority of the analysis comes down to prices declined this year and the S&P is up smartly in 3 months. Otherwise you have trouble proving your case.

But wait there's more:
-$5K upkeep / reno amortization ($150K over 30 years). The number is likely about zero for these couple years. But then they go up. And there's maintenance and renovation in a "luxury" rental too that will translate into rent increases not reflected in your static rent analysis
-$10K transaction cost amortization (8-10% over 8-10 years). So there's a full transaction cost to sell, but the calculation on the rental transaction costs is practically excluded

$1.3 mm (including $25K for minor reno, painting etc) 2 bed apt with 1200 sq ft space in excellent condition but no special view. Close to the subway. Down payment $400K
Rent:
-$66K rent paid ($5.5K per month min, which is a great deal for a good 2 bed room in the city, luxury prices much higher)
+$12K return on downpayment post tax 3% per year (muni bonds, some equities, some T bonds)
-$3K transaction cost amortization (2 year rental to 10% broker, $5500 for two years, or 15% to broker but stay 3 years but rent would not be same)
-$1.5K (moving cost 3K every two years)
=$58.5K + Pain of moving and rent increase sword hanging over you every year.

Buy a coop:
-$20K cc & tax (40% tax deductible)
-$27K interest (3% arm I/O on $900K)
-$10K capital loss (per SE condo index 0.89% loss)
-$5K upkeep / reno amortization ($150K over 30 years)
-$8K transaction cost amortization (6% = broker rebate going in at 1-1.5%, 5% selling commission, 1% mansion tax, 1-1.5% sundry), over 10 years)
+$10K income tax benefit (28% on 27k + 8k)

= $60K - no rent increase hassle, ability to decorate the way you like.

Virtually the same. The above statistics can be verified easily by doing the SE search and looking at the average listing. There are good deals for rentals from time to time as there are for buying. We are less than <$1000 per sq ft for our apartment using 50% of exterior walls in calcs.

Also, what happens, if the property prices tick up 2-3%?

the opposite of what happens if prices tick down.

Nada,
- Should add $2k per year owner's insurance vs $1k per year renter's insurance.

- So buying even managed to cover the property prices down, which in my view will not be the case going forward for $1-$3mm coops.

- That said, if you can make 10% return every year on stocks, buy vs rent will never work for you.

Bottom line is if you think real estate prices are going down, you should not buy.

and if you are not reasonably certain of being able to stay in the same apartment for at least ? yrs?

of course, cc.

and if you see a likely possibility of maintenance going up significantly faster than rents because of the difficulty of landlords raising rents in an environment of flat to declining incomes.

300_mercer -- Just want to mention you talk about renters moving every 2 years (moving cost), on owning side you take best of both worlds:

* Assuming very conservative returns for renter's money. Did treasury bonds, munis and equities (in any combination really only return 3% last year)? What is the right mix of these to consider for a 10yr time horizon

* Lower cost due to ARM I/O financing, but don't talk about very likelihood of much higher interest cost after ARM terms expire especially if market stays stable.

* Taking a discount on seller broker fees but yet full fees for renter. Also assuming renter will move every 2 years... (Is that the average tenor of your renters?)

If the market stays relative flat, I can use your and inonada calculations as see its above flat to slightly better for renter...

I wonder what they would look like if Real Estate goes up say 25-50% over next 5 years. Of course need to consider where do you think stock market will be in 5 years in same scenario? And ARM I/O interest rates? Would like to see the math in the "high" real estate returns/market returns/interest rates...

and if it turns out that manhattan is actually no different than the rest of the country but much slower to decline because of the relatively high liquidity enforced by co-ops. and therefore in manhattan we are currently just approaching the decline rather than having passed through it.

and if all the dire predictions related to state and municipal obligations inevitably cause a prolonged upwards spike to property taxes that also contribute to maintenance increases significantly outstripping rent increases.

cc, declining incomes was last year for wall street. 2012 is whole new year. look at the bank stock prices. BAC up 40-50%. People at BAC are ecstatic as they got a lot of stock which they can sell in the first year.

>and if it turns out that manhattan is actually no different than the rest of the country but much slower to decline because of the relatively high liquidity enforced by co-ops

So Manhattan is different.

columbiacounty
6 minutes ago
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>and if you are not reasonably certain of being able to stay in the same apartment for at least ? yrs?

And what about the assumption you have to make as a renter that the landlord will increase the rent above market in the 2nd or 3rd year, which is why you see people moving with that frequency?

its not even the end of march...talk about counting chickens, etc. mercer---what actually happened to the mountain of toxic assets? they certainly did not get written off in their entirety. where are they hiding? how long can interest rates remain negative? what happens to all the pension assets chasing 7-8% returns? do they just keep selling each other equities? forever? does any of this feel real to you?

Wow, all those reasons make me wonder why anyone would be plugging a positive return from the stock market into the equation. apt23? inonada? w67thstreet?

just to be clear. anyone who is buying with eyes wide open and the financial ability to take a significant hit based on the possibility of price declines, god bless. its your incessant trumpeting of the fact that buying is the same cost if not less than renting that i think is highly misleading. you don't know and i don't know with any degree of certainty what will happen to asset prices.

i am pointing out my reasons for caution. other than BAC being up 50% (but of course still down 50% from 2 yrs ago), what is your evidence for assuming any possibility of prices remaining steady much less ticking up?

(unless w67thstreet reversed course again)

columbiacounty should address inonada's misleading assumptions too.

"+$12K return on downpayment post tax 3% per year (muni bonds, some equities, some T bonds) "

Why are you playing make-pretend? Look up some actual returns March 17, 2011 to March 17, 2012:

SPY (S&P 500 Index ETF): up 10%
TLT (T Bond Index ETF): up 24%
NYF (NY Muni ETF): up 10%

Your choice of asset mix, not mine, averages out to a 14.7% actual return over the past 12 months. That's $59K on a $400K downpayment in the real world, not the $12K in your fantasy-land.

You want w67th to admit he's an idiot come year-end if prices are flat, yet you cannot even acknowledge a $47K discrepancy between your imagination and reality?

How did the S&P do from 1/1/11 to 12/31/11? Should we run a few scenarios?

Bond index ... everyone talking about how rates will go up, what does that do to the bond index?

Muni index ... everyone talking about the dire situation in municipalities, what does that do?

A lesser fantasy: if your income affords a $900K mortgage, you are in AMT and you don't get to deduct taxes. If it is above, you get hit by interest dedictibility cap. Take out $2-3K.

bonds go down(rates will go up), if munis go down (because of their credit), taxes go up. So if rates go up, and taxes go up, while the economy continues to stagnate, what will happen to Real Estate?

Economy in NYC is stagnating?
And if it is, will rates go up?

it sure is. Unemployment at 9.3%, incomes down 10% in 2010'.. now with Walls street bonus's down 40% which the city derives 30% of it's revenue, I'd say yes.. it is stagnating.

If you want to play Jan 1, 2011 to Jan 1, 2012:

SPY: +2%
TLT: +34%
NYF: +13%

Averages out even higher: 16%, $64K on a $400K downpayment.

Mercer, your fantasy is that cost-of-capital was and will be 3% forevet on a risky long-term asset. The fact that banks charge 3%+ for a short-term 5/1 ARM that is buffered by 30% equity and then some due to value of personal credit should clue you in on this. If you cannot understand the economic arguments of this, the reality of historical performance of your own asset mix should make it clear.

Over calendar year 2010:

SPY: +13%
TLT: +9%
NYF: +0%

Averages out to +7%.

2009?
2008?

Over 2009:

SPY: +23%
TLT: -20%
NYF: +10%

Averages out to +4%.

Over 2008:

SPY: -36%
TLT: +29%
NYF: +0%

Averages out to -2%.

So your portfolio, averaged out over a cherry-pocked 4 years to include the worst financial crisis seen since the Great Depression, averaged over 6%. Even in the absolute worst year, -2%. Guess what happens if we don't cherry-pick?

Over 2007:

SPY: +6%
TLT: +10%

No NYF ETF at the start of 2007, so excluding. Averages out to +8%.

How does those market returns compare to corresponding nyc real estate returns?

Over 2006:

SPY: +16%
TLT: +1%

Averages out to 8%.

And also, it is ok to look back 5 years, but the question is what are the possible forward looking returns for investments vs nyc real estate?

Over 2005:

SPY: +5%
TLT: +9%

Average out to +7%.

Over 2004:

SPY: +11%
TLT: +10%

Averages out to +10%.

Over 2003:

SPY: +25%
TLT: +7%

Averages out to +16%.

Over 2002:

SPY: -20%
TLT: +10%

Averages out to -5%.

So over your 10-year holding period, your own choice of a portfolio averaged 7%.

>your own choice of a portfolio averaged 7%.

good or bad? fair compensation for market risks?

nada, two questions
1. If you are looking since 2002, you would have made very good money in real estate despite big downturn in real estate.
2. More important question is LOOKING FORWARD, you can not assume real estate will go down. 3% return on real estate with 3 to 1 leverage is in the ball-park of 7% you post.

Clearly if you are bearish on real estate prices and bullish on equities, you would never invest in real estate.
Hence buy vs rent today looks very good.

See the next post with above assumptions.

but you still have not given one reason for real estate to go up---other than you want it to and now need it to in order to justify your decision.

LOOKING FORWARD using 7% post-tax investment returns and 2% real estate returns

$1.3 mm (including $25K for minor reno, painting etc) 2 bed apt with 1200 sq ft space in excellent condition but no special view. Close to the subway. Down payment $400K
Rent:
-$66K rent paid ($5.5K per month min, which is a great deal for a good 2 bed room in the city, luxury prices much higher)
+$28K return on downpayment post tax 7% per year (muni bonds, some equities, some T bonds)
-$3K transaction cost amortization (2 year rental to 10% broker, $5500 for two years, or 15% to broker but stay 3 years but rent would not be same)
-$1.5K (moving cost 3K every two years)
=$42.5K + Pain of moving and rent increase sword hanging over you every year.

Buy a coop:
-$20K cc & tax (40% tax deductible)
-$27K interest (3% arm I/O on $900K)
+$26K capital gain mostly tax free (3% per year)
-$5K upkeep / reno amortization ($150K over 30 years)
-$8K transaction cost amortization (6% = broker rebate going in at 1-1.5%, 5% selling commission, 1% mansion tax, 1-1.5% sundry), over 10 years)
+$10K income tax benefit (28% on 27k + 8k)

= $24K - no rent increase hassle, ability to decorate the way you like.

All depends on your forward looking assumptions. All you need is 1% real estate price appreciation vs 7% post tax investment return assumption.

Woops, correction for over 2002:

SPY: -20%
TLT: +20%

Averages out to 0%.

So that's 7.5% over the last decade.

nada, i put 28% tax deduction which is true for AMT. Mortgage interest deduction is before AMT is calculated. "A lesser fantasy: if your income affords a $900K mortgage, you are in AMT and you don't get to deduct taxes. If it is above, you get hit by interest dedictibility cap. Take out $2-3K."

Only cap is $ amount of mortgage on which you can deduct interest. If the rates go up, you can deduct the same percentage.

"1. If you are looking since 2002, you would have made very good money in real estate despite big downturn in real estate. "

Geez, continue the fantay much? There was a massive bubble followed by a modest downturn. It left prices increasing at 4% per annum over the decade, about 2% higher than inflation or rents or any other rational economic metric. Even after all this, it would have only yielded 7-8% per annum on a 30% downpayment, about the same as your portfolio. Remember, rates were 3-4% higher.

"2. More important question is LOOKING FORWARD, you can not assume real estate will go down. 3% return on real estate with 3 to 1 leverage is in the ball-park of 7% you post."

Who cares about LOOKING FORWARD. I'm happy to talk about just last year, when you "placed your bet" and assumed a 3% fantasy return when reality was 14-16%.

300_mercer, you don't get to deduct property taxes under AMT. I'm not talking about mortgage interest.

>Who cares about LOOKING FORWARD. I'm happy to talk about just last year, when you "placed your bet" and assumed a 3% fantasy return when reality was 14-16%.

Hmm, should we look at 1 historical year, not look forward, or do what columbiacounty says? This is so confusing. Even apt23 is seeking permission to buy as her rent went up. Columbiacounty and Brooks say things are bad, inonada supports equities as does w67thstreet. So confusing.

"LOOKING FORWARD using 7% post-tax investment returns and 2% real estate returns"

I don't even want to get into the fantasies on that one. 3% I/O ARMs as far as the eye can see? Woohoo!

Try again, except use actual values since you "placed your bet". When you admit you were a "complete idiot" for being wrong to the tune of $70K per million over the past year, I will join you in your calls for having w67th admit himself a "complete idiot" if NY RE prices go up by year-end.

nada,
1. Now you are avoiding the reality that it is not the current prices, which have already come down, but you forward view on real estate vs alternative investments which drive which way buy vs rent will go. I used your investment returns and used similar period real estate returns (in fact a lower using SE condo index).
2. We bought in the second half of last year with a good discount, due to the flexibility we offered the seller, and I see the prime village where we bought in on fire. Just look at the recent sales in Devonshire and new St Vincent's condo all with 8.5 foot ceilings.

>I see the prime village where we bought in on fire. Just look at the recent sales in Devonshire and new St Vincent's condo all with 8.5 foot ceilings.

Yes but what about Sutton Place? What about Sutton Place?

BTW, how's my call for the last 2-3 years worked out? Flattish RE prices while stocks go up. You remember, right?

So we don't need a 7 year hold period?

- I do and I had a similar opinion on stocks on which I have profited handsomely but reduced the exposure now that in my opinion stock are at fair value (I still have plenty of exposure to stock market via unvested stock and by working in financial service).

- As I was suggesting to OP, if you want to live in prime downtown, it takes a long time to find what you really like without overpaying.

- So that you do not avoid the forward looking example, where I used your historical return assumption on 7.5% (changed it to even post-tax) and used a lowly 2% real estate assumption (+$26K capital gain mostly tax free (3% per year) has typo as it is actually 2% on 1.3mm), buying is much better. SE condo index 1.23 to 1.88 in the last 10 year is more that 5% on notional and with 3 times leverage on which you do not get a margin call as long as pay your mortgage, is 15%. I am just using 2% to evoke a little honesty in you.

>to evoke a little honesty in you.

That's below the belt.

No. I am just looking for Nada to acknowledge that it the forward looking assumptions about real estate and stocks you make which will drive your buy vs rent. If you use historical assumptions as I did, buying is much better.

hburg, re sutton place, Nada was asking me about my purchase, which I think is a steal at $1000 per sq ft for fully renovated space with 12ft ceiling in prime village.

For Sutton place, buy vs rent works even better as you can find stuff trading at $900 or below per sq ft but it is not for me.

Why wait till next year, I'll freely admit to being an idiot with regard to huge swaths of my life. I wish I didn't raise my voice against my kids as much. I wish I was more considerate to my wife. I wish I didn't make snap judgements about people.

As to your little bet. You are so on. I have never in my life come across a trade more idiotic than bubble NYC re at these prices. I feel like a pearl trader at the peak of the pearl bubble knowing full well what is coming. What amazes me are ppl like you mercer who 'rationalize' buying these tulips. As more time passes and the more obvious it becomes how dumb the trade was -> the more value the lemmings put on in 'not having to move.' I gotta tell ya, my old banking boss lives in larchmont and bought at the peak 1987. He suffered through 14 years of living in a cramped 3 bdrm bf being able to buy a new home. Basically. It took the start of an enormous re bubble to get out. He never did the rent/buy math, but had he bought at 1995, he probably could've quit banking in 2007. Last time I chked he's still working as a 53yo slave to his lifestyle and mortgage.

well put w67. At least your views are clear that you are expecting the real estate to go down so why buy.

3 moves to be financially secure. Like w81's mom who's gonna sell her apt into a downturning mkt for $1.5mm and never consider the fact she could have sold at $4mm in 2007. $2.5mm extra to help her son buy a nice insider coop for $800k and still find her cats' trust fund with $1.7mm which she could live off of in Florida until the all you can eat plan that we are all headed towards.

When the tsunami came, the locals saw the fish flopping around as the tide went out and ran for the hills. The dumb tourists went in got their kids, wife and a camera to take some pictures.

Same data set.... Terrible outcome for some. Mercer I hope your camera is waterproof.

The bottom line is NYC real estate faces far too many headwinds and will be dead money for at least two years. Why?

1) A smaller, less profitable Wall Street going forward will seriously impact the 1MM+ condo / coop market.

FInancial regulation like the Volckler Rule and rules restricting leverage means the banks will be less profitable going forward. I am a banker and bonuses were down 50%+ at my bank vs. last year.

Some math? Let's say in 2007 you got an $800K bonus. In 2012 you probably got something like a $250K bonus, and only 20% of it was cash, or $50K cash. The rest is tied up in restricted stock and it vests over three years. If you leave the firm, which is very common, you lose the rest. Also 40% of the VP & Below level employees got zero bonus this year. These guys were making $250-750K / year all-in for 2007.

This is a significant drop in income levels at the biggest industry in NYC and will have serious implications on NYC RE going forward.

These bonuses just hit bank accounts within the last month or so, so the effects of lower bonuses will not yet be apparent in historic sales data.

2) The US Dollar is strengthening, which means NYC real estate becomes (much) more expensive for foreigners, especially Europeans.

Usually a stronger dollar would correspond to higher employment levels, but NYC is facing a different reality as Wall Street is suffering.

3) Loans are hard to obtain.

On the flip side, a few positives: 1) the rental market is hot, 2) the high-end sales market is hot although this only benefits the 1% of brokers / sellers. Overall though, the NYC market will either tread water or fall. Being a buyer you have all the power right now and new money coming into the market will slow to a trickle. The weakness here is going to start at the $1MM range and will pressure more expensive properties.

tomnevers, did you check DiNapoli's report about bonuses for 2011 and factor in a higher base which is almost 1.5-2x 2007 base?

300_m : How can you simply "assume" that prices will rise faster than rents indefinitely?

Your assumption implies on its face that ever larger arbitrage and profit opportunities will just get bigger and bigger without evoking any response. It's like assuming that if Helicopter Ben were to drop a hundred dollar bill in Times Square every minute, eventually there would be a large pile of them. Don't you need to consider -- not just assume away -- the possibility that someone will pick them up?

If you think that markets don't work, why would you want to invest in the world center of market capitalism? Or do you have some alternative story about why NYC is such an extraordinary place to invest -- something about the inevitable victory of the vanguard of the bankertariot sweeping the professional classes into the ashcan of history, perhaps?

Hah. The bigger your base the bigger the bullseye on your back... 95% of bankers are walking HP Calculators. It's only when you get to MDs and above where you had industry contacts and a Rolodex to source deals, you becom a 'playa'. And even the playas are being sent to pasture as going forward the leverage, the grease that turns the financial world is being shut down.

But I assume most lemmings are like you Mercer. Just intelligent enough to think they know more. Who puts a bunch of bullet points in their re bull brain and pull the trigger:
1) I bought 15% below peak!
2) I plan to stay for 30yrs to break even, the hell with opportunity cost;
3) there are tons of richer people who'd love my apt;
4) the foreigners are coming!;
5) re always bounces back;
6) these are low interest rates;
7) I like being an 'owner';
8) wall street will always come back!;
9) can't live in my bank account!;
10) I lost $1mm in Pets.com Not gonna do that again;
11) damn, lost another million in Enron. At least I can live in RE.
12) I hate moving.

Meh, I hate not having money. I despise being at the mercy of a boss for a bonus. The feeling I can't just fly off to Europe for 5 years if I want. Or to buy an R8 for the hell of it $94.5k.

And finally. If you have a mortgage on your home. You are a prepaid renter. If I can't keep my kids in my 'home' if I pass prematurely I cannot sleep well at night. The way I have it set up. I drop dead. My wife can immediately stop working her part time gig. She can pull up stakes and buy whatever the fk she wants and my kids have plenty of funds to see them through graduate school and have something left over for a downpayment.

Tomnevers... I've been telling these bozo's that for months.. They keep ignoring the facts. let them, they've been warned

heisenberg slept here...maybe (science joke)

Mercer, how much money did you put into the market relative to the amount that put as a downpayment? When did you start fenceposting your downpayment, and what would you have done with it otherwise?

"SE condo index 1.23 to 1.88 in the last 10 year is more that 5% on notional"

That's 4%. There's this little thing called "compounding".

financeguy, in my first example, I put 1% loss to break-even. In the second example, 2% to be much cheaper than renting. When is re going up faster than rents of inflation.

"hburg, re sutton place, Nada was asking me about my purchase, which I think is a steal at $1000 per sq ft for fully renovated space with 12ft ceiling in prime village."

Yes, I'm sure in a market like the Village no one else could figure out the value of the listing. You should mark yourself up by 20% on the day you bought, in fact.

nada, I just used 2% instead. You are master of excuses and avoiding the real question I asked

"So that you do not avoid the forward looking example, where I used your historical return assumption on 7.5% (changed it to even post-tax) and used a lowly 2% real estate assumption (+$26K capital gain mostly tax free (3% per year) has typo as it is actually 2% on 1.3mm), buying is much better. SE condo index 1.23 to 1.88 in the last 10 year is more that 5% on notional and with 3 times leverage on which you do not get a margin call as long as pay your mortgage, is 15%. I am just using 2% to evoke a little honesty in you. "

Just admit it, Mercer. I plugged in rent vs. buy assumptions per 300_mercer's opinions on how I should invest vs. finance, and I came up short $70K per million. Effective rent was 3.3x what I actually paid over the last year. It would have taken a 7% gain in nominal price to make up the difference. Glad I didn't hold my breath. Even if I had paid an extra $20K per million in rent as you think is normal, I'd still be in the hole for $50K hoping for a 5% gain in nominal price to make up the difference.

Just say what you're asking w67th to say for next year should prices go up: "I am a complete idiot". It's OK, you can say "but I'll be proven correct next year", I don't mind.

"You are master of excuses and avoiding the real question I asked"

I'm tired of playing fantasy forward-looking estimates. I'd like to play reality of where you actually stand with your "bet" currently.