Manhattan Market predictions

Crime is pretty well recorded so we'll eventually have our answer. We're making huge changes to how we police our city, and how we detain people once they are charged with a crime. Concurrent to these changes, we can't seem to house everyone who needs a home, and we're unable to treat all the mentally ill people who need services.

You can't call the drop in crime a permanent trend until you go through a recession. That's the test. But also NYPD has become so conscience of the stats that they are spending a lot of energy massaging the numbers to make them look as good as possible. For example in the past 2 years there have been 2 mugging sprees on the LES which got way downplayed. Citywide NYPD has systematically underreported rape statistics for years.

I used to take the number 32 bus into the city from Nutley, New Jersey in the late 70s to go to places like Golden disc records, bleecker Bob's etc to buy David Bowie records (superfan / collector). I also used to trek over to Essex Street to buy T-shirts for my silk screening business from Eisner Brothers, 'the little shaygetz from New Jersey is here again :) '

I'll always stand up for New York, even in the 70s when things got pretty bad it was still a wonderful place, and one of the greatest cities in the world! I've never felt unsafe in this city, even when I go to my grandmother's office at 1 Wall Street starting in 1972. Jeez I'm getting old...

BTW due to the change in RS from June, landlords are already warehousing thousands of units hoping to prevail in overturning the new law. At some point the government will do something to force them to rent them out at the legal rent. If that happens thousands of potential buyers who "hit the lottery" and get these apartments will effectively be removed from the pool - try doing the "rent vs buy" calculation when you have an infinitely renewable lease on a 2 BR/2 bath apartment at $1,500/month capped at RGB limits.

Kevin, I get that you've seen nothing but price appreciation in Manhattan for your entire adult life. My in-laws have lived in Manhattan since shortly after the War and have seen the same thing. I agree that paying $300K for a townhouse in the Village in 1980 was a good deal. But now I'm being asked to pay $6 million. Really different story. Since Dinkins left office, NY has been through a multi-decade macro cycle of improving quality of life, declining crime, rising business confidence, somewhat better governance, growing population (including both poor and rich immigrants and the echo boom), declining interest rates, tax abatements, federal subsidies (SALT deduction, mortgage interest deduction), better schools under Joel Kline, and return of business from CT and NJ. All of those factors are now reversing or have reversed. If the next Mayor and Governor are more like Dinkins and Lindsay than Giuliani and Bloomberg, Manhattan real estate prices will be lucky not to suffer a substantial correction. You say that rich people own - but this is less true among the 1% in the Under 40 crowd. I have a few friends who are continuing to rent in NYC while owning in Jackson, Miami, or New Hampshire, mainly as a way of stashing away a spare million or two in an interesting asset. It's a shift in generational attitudes from yours to mine that could have a profound impact on real estate going forward.

*Keith, not Kevin...

Prices for real estate have gone up since the day of the colonies. And that will continue into the future. Crashes? Setbacks? Recessions? Yes.

will my grandparents paid $17,000 for their house in 1958. They thought that was a heck of a lot of money and how much more expensive could things get!? When 99 Jane Street opened up and prices were $500 a square foot, people thought that was insane!

Perhaps in the present moment it's hard to imagine, but if you have that imagination then you're one of the rare ones.

So I'll politely disagree with you George. Long-term prices go up....

And when you do start getting older, see more people you know get sick, more people die. life's too short to run around with a spreadsheet looking at a home to live in in my humble opinion. But to each his own said the farmer who kissed the cow. Anyway time will tell.

Keith

If the well off always buy then who is renting all these >$6,000/month apartments (representing >$250,000/year income). My best guess is there are over 50,000 of those.

Long-term, prices do go up. But that doesn't mean buy anything any time just because. If I'm going to plonk down several million in an illiquid asset with high transaction costs, the least I should do is run a spreadsheet and assess which way pricing is going.

Plenty of people got burned buying NY real estate in the 1980s, and prices didn't recover until the 2000s. Even trophy assets like Rockefeller Center went bankrupt - unimaginable today, but not that long ago. BTW, when the Japanese bought Rock Center, they envisioned rents of $100/ft vs. $33 at the time. They were right, but their bad timing wiped them out.

Your parents place cost $151,000 in today's money. If I were being asked to pay $151K, maybe because I were living in some dumpy place like NY was in 1958, it would be an easy decision. I can afford to lose $151K. It would be really painful to lose a big chunk of what that place might cost today, call it $3 million. That's the generational difference that I don't think you appreciate.

Keith,
I don't disagree that in the long run Real Estate prices will go up, but as John Maynard Keynes pointed out "in the long run we're all dead." I would disagree with the concept that if 20 years from now prices are up 20%, but 3 years from now they are down 25% that "now is a good time to buy."

Also, perhaps I'm reading this wrong, but it seems to me people are using the behavior of those who are buying apartments which are a small fraction of their net worth to predict the market. Firstly, it seems to me that is the section of the market which seems to be currently tanking the hardest. Secondly I think the part of the market which we are trying to predict (which is also the majority of the market) are those who are buying units greater than their net worth.

^^ Exactly - I can lose $151K but can't afford to lose $3mm (or have it tied up in an illiquid asset). Prices have become unaffordable to run-of-the-mill mass affluent New Yorkers who drive the heart of the market in the low/mid single-digit million range, so buyers have gone on strike until sellers adjust down.

Now if we only had a crystal ball 30, and knew exactly when prices would fall 25% and when they would rise 25%... Unfortunately nobody does. My point is, you can buy a home that you can comfortably afford now. Or you can sit around waiting for the market crash. Free will is a great thing.

I wonder if Maynard was a renter?

Just curious 30, what were you saying in 2009, buy or rent?

Keith

A home that I can comfortably afford is not located in Manhattan. This is the point you keep missing or ignoring, and it's at the root of why Manhattan real estate is tanking and will continue to do so. When your parents bought for $151k of today's money, it was easy to afford that. If that same property today costs $3m, "a home you can comfortably afford" becomes somewhere in Tennessee. And I could comfortably afford a NetJets card (to visit NYC) with the savings on taxes and school tuition alone.

Then don't live in Manhattan. We just assisted buyers in Brooklyn with two very lovely townhouse purchases, one for $5MM and another for $3.1MM. And we just closed on another townhouse there for $2.45MM. Not to long ago we assisted a buyer with a $12MM townhouse on the upper west side. None of these buyers were stretching. The down payment was a small portion of their net worth.

For better or worse there's still a lot of very wealthy people in NYC. And these are very smart, educated and financially successful folks who understand the ramifications of purchasing real estate in New York versus renting. They are also capable of understanding what they can and cannot afford.

You made a reference about 6M townhouse. One thing you don't mention is the incredible growth we've seen in compensation from the 80s vs now. Buying a townhouse in Manhattan was not considered cheap in the 80s and only a select few could afford to do so. Compensation has just exploded....

Typical profile of a $2.5MM condo buyer; put down $500k from $1.5MM savings approximately $1MM invested in equities, bonds, cash etc. Combined income of $800k+. This is not a reckless scenario.

Bottom line if you want to rent you should rent, whatever floats your boat.

Keith

I'm tapping out of this thread :) whatever anyone decides to do, move, rent, buy or camp... Best of luck to you!

There's no one size fits all answer, that is for sure.

Hope politeness is not approaching Canadian levels soon.

Few months back there's a Canadian racist lady yelling racial slurs at minorities recorded on YouTube, and the Canadian police said it's freedom of speech

40 years of rising prices is a signal that things are overheated, not a signal that prices will rise forever. Buy low; sell high. It's good advice.

Rising prices are a function of rising incomes, rising wealth, etc etc. Manhattan homes are among the most expensive in the world right now as all these factors are deteriorating (ie: incomes are lowering, job security is almost zero, rising taxes, foreigners aren't buying). It's a signal that prices are overvalued, and will need to come down.

We are at the end of a decade-long historic expansion. If/when we enter recession, watch out. People will be forced to sell.

I think people have to keep in mind that there are far more women in high paid jobs now vs 20 years back resulting in many high double income households with >$500k income. If both jobs are in the city, the commute to suburbs is much harder.

Separately, if you can’t afford it or are fearful of NYC real estate crashing you should definitely not buy. The latter part is no different from many people not wanting to invest in Equities.

However, given the explosion of luxury rentals at more than $6 per sq ft per month, there clearly are a lot of people who can afford to buy apartment priced around $1000-1700 per sq ft. I do think there is an issue with how many people can afford ultra-luxury priced at $3-4K plus per sq ft.

And people who are frugal, a virtue in my opinion, can buy an apartment in Manhattan which was renovated more than 15 years back but still is in decent basic luxury rental condition with every thing clean and functional. They can change to mid end stainless steel appliances, regrout bathrooms, change a few fixtures, refinish the floors, repaint etc for less than $50 per sq ft. There are always such apartments available at $900-1100 price range.

Until this thread I didn't know there were people who bought houses/apts that are more than their net worth in NYC! I thought that was a middle class suburb thing - for ex, young couple just starting out and buying a $200k home.

How the hell does a couple with $1.5m in NW think it makes sense to buy a $2.5m home? A bit mind-boggling to me. The friends that I have that own in Manhattan are almost all $30m+ NW owning a $3-6m apt. For them, I understand why spreadsheets are really unnecessary. It is a trophy, like a McLaren.

I wonder what % of owners in the $2-5m purchase range have apts with resale value worth more than their entire NW excluding the house? If I had to guess I would assume it was around 10% or less, maybe I am way off.

If you are 35ish with a child or two and making $750k-1mm household but were only making $500k 5 years back, your savings are not much (perhaps $1.5-2mm) but future earnings potential is a lot. They may buy $2.5-3mm apartment (3-4 times income) . Apartment purchase amount is a function of income, down payment saving, future earnings potential, and net worth. For older people, mostly net worth.

Two points, George, why do you think NY was dumpy in 1958? We were close to a cultural peak at that time and the city was very safe.
Which brings me to the second point. If you're buying a 6M property I'm guessing you are doing Uber/taxi everywhere so safety is not so much an issue, especially if your place is full service.

Note that this horrific crime took place within in the scaffold walkway of 200 Amsterdam, where pricing seems to start at $3MM.

https://abc7ny.com/woman-sucker-punched-in-violent-upper-west-side-attack/5630111/

Stache - my two cents on the crime part - uber and taxis doesn't solve the problem. You want to feel safe moving freely in the streets and parks, and you don't want to worry about your family and children.

I feel extremely safe living in NYC and I feel that my family is extremely safe. If that changed then I would leave NYC immediately.

If you want to get an idea if how violent crime isn't being represented by the statistics, Google Hassidic attacked and see how many recent stories come up. The underclass in NYC is feeling like they are being crowded out and I think the next recession will bring out a lot of ugliness. Did anyone listen to AOC speech today?

I think Manhattan is as safe or unsafe as suburbs or other cities. Columbine, Sandy Hook, Parkland. Massive police presence probably makes it safer than other places.

Low level crime may indeed be a little higher due to De Blasio’s policies.

NYC budget issues are going to lead to a combination of police understaffing and being underpaid - which will lead to increased corruption. Did you see this:
https://nypost.com/2019/10/12/4-dead-3-seriously-injured-in-brooklyn-shooting/

The spot was 2 blocks from the precinct, had been going on for over 6 years, and every6in the neighborhood knew about it. No way there wasn't a payoff going on.

If you want to live in a place where you have to take Uber everywhere and love behind a security perimeter, there are some lovely villas in the suburbs of Johannesburg. As for NYC, even a full service building doesn't take the dog out at night, and frankly it's scary. Not quite Tenderloin scary, but just today I saw a beggar sexually harassing a woman and people selling fake Louis Vuitton in the open on the street. Blas refuses to do anything bc we should tolerate homelessness, and the fake bag sellers are probably illegal aliens so they also can do whatever they please. Meanwhile if you drive 30 mph you get a ticket. The guy is undoing what made NYC livable in the early 1990s. And real estate prices will be similarly undone.

300, your comment on women in the workforce IMO is a big big deal. None of my friends who are professional women who have kids want to commute to the suburbs. This is basically why we bit the bullet and put down good money for a family-sized apt in a good zone.

There was a similar thread in 2008 on the same topic. I thought it was illustrative.

George,
You can't get the NYC jail population down from over 20,000 to just 3,300 unless you just stop arresting people. At 3,300 capacity they can't even process the daily arrests, much less hold people.
https://www.ny1.com/nyc/all-boroughs/inside-city-hall/2019/10/19/close-rikers-island-plan-passes-elias-husamudeen-coba-correction-officers-union-slams-vote

Sluox, Thank you. As a dad, I do not want to see my child only over the weekend. And I am sure I am not the only dad who feels that way. 20 years back, suburbans dads made peace with that with an hour 15 minutes commute each way to nice suburbs like Princeton. I find that there are more fathers who do not want to do that even if their wife is stay at home.

As an example of more women in high paid jobs, HBS class of 1998 was 24% women. Now the numbers are running 40 percent plus for many years. It is too hard to fight that trend with most large businesses feeling that they are way behind in retaining highly competent women. And businesses do not want to be in the burbs as they can't get highly talented young people to work for them in the burbs.

De Blasio has only a couple of years left and crime reduction has deeper societal reasons (some conclusions like abortions are very controversial) than policing.

https://www.inc.com/magazine/19980601/940.html

May I add that children's playgrounds in Manhattan even 15 years back were dismal. Now there seems to be a new playground cropping up even year on the west side piers and I am sure in other areas I am not aware of. The number of private pre-schools have exploded. City has a pre-K program. While school choices and overall quality of schools still need improvement, charter schools to my knowledge did not exist much 15 years back. I also know of many new zoned schools opened by the city which are pretty good (Spruce Street, some other schools downtown). So overall much better place for families now than before.

Meanwhile, over in Chicago, the luxury market ($1m+) is about to turn in its 8th consecutive year of price declines.

"We keep thinking it’s not going to get worse, and it gets worse and worse. The higher end is taking a huge hit.”

https://therealdeal.com/chicago/2019/10/18/in-a-sputtering-market-luxury-brokers-in-chicagos-tony-suburbs-get-creative

300, the problem with buying in the zone for PS6 or whatever good public school is that the city can blow up the zoning in a flash and send your kid an hour away just because. And it seems they want to. The only way to guarantee a good public school is to move to a small suburb.

Families have been moving to burbs for years for better public schools for years. But it comes with commute, different life style and two cars. It is a good choice.

Most people I know or have known who move to suburbs have their wife stay at home, wife working in the burb, or have family / live in help (childcare is much harder to find in the burbs as the nanny needs to drive) who takes care of children if both commune into the city.

There is evidence that this trend slowed during the Bloomberg years and is accelerating again.

https://www.wsj.com/articles/millennials-continue-to-leave-big-cities-11569470460

"New York lost almost 38,000 people age 25 to 39 last year, a decline that was roughly twice the size that it experienced each of the previous three years. That drop coincided with the city’s first overall population decline in more than a decade in 2018."

Will appreciate any statistics for income of younger people leaving NYC.

And how many illegals who chose not to come to NYC?

The young ppl leaving NYC are richer than you think. Remember, rich people can move. Poor people can't. When a city has fewer people paying and the same people in need, property taxes or income taxes rise, and real estate gets hammered. One reason Chicago's property market is in the toilet is the insane property taxes in Cook County, typically 2-3% of market value and rising every year.

As for NYC:

https://www.dailymail.co.uk/news/article-7127803/Exodus-wealthy-millennials-Rich-35s-deserting-New-York-heading-west-coast.html

"Using data from the Internal Revenue Service (IRS) from the 2015 to 2016 tax year, SmartAsset deducted the number of affluent millennials departing each state from those moving in. The results showed that net migration to New York that year was negative, at almost -5000, leaving it at the lowest level of all 50 states."

https://patch.com/new-york/new-york-city/rich-people-are-fleeing-new-york-droves-study-shows

"More than 41 percent of those who left earn $150,000 or more, the largest proportion among the five income brackets in the study. By contrast, just 8.4 percent of now-former New Yorkers earned less than $50,000, the study found."

https://amp.lohud.com/amp/3153657002

"Cuomo is attributing an unexpected $2.3 billion fall in state revenue this year to what he fears are some wealthy people moving to states with lower taxes."

I don't have any statistics to back this up, but I suspect the majority of those buying ultra luxury units don't add much to NYC economy in terms of either income taxes or spending locally (because they can afford tax schemes to avoid high taxes and don't spend a lot of time in the units. For example I have a direct view of 432 Park Ave and it seems like exactly the same lights are always on or always off, and mostly always off).

30, Ultra luxury buyers do pay real estate taxes and use very little services as in schools etc. Whenever they visit, they do spend a lot keeping the economy going. They also indirectly employ building staff, housekeepers etc.

I am looking for income percentiles in NYC over time but can’t find the data. Ideally I would like to look at top 1 and 5 percentile cut off income.

Ultra luxury buyers always break social equilibrium and destabilize economic, they push up property price and harm most middle class working people.

Currently RE market won't drop, because the crooks started QE4 already (not officially in the name of QE4)

Top 1% income in Manhattan hovers around $800k to $1m depending on where you look. Don't have time to find data now.

I do know people who are moving out of NYC, but almost all of them are below $500k/income or with multiple kids. I don't know of any large exodus of people making over $500k or $1m in income leaving Manhattan. Below $500k, people are essentially priced out of the buyer's market anyways.

Not only that, if you look at what NYC offers in terms of QOL, there are not really many options in this country, unlike in Europe, where there are many large "walking" cities. I don't fully buy the NYC is going to crap argument. Things here seem to be continually improving. For perspective, I moved here in the early 2000s.

George, 300, unfortunately, the stats you cited are too rough and too low for comparables. i.e. 150k a year would be affluent in national statistics for migration, but it's not informative vis-a-vis housing market for family-sized apartments between 1-3M.

It may be useful for gauging rent for certain segments, but for unclear reasons rent continues to go up regardless of putative net out-migration in the recent years.

The really relevant statistic is families making between 200-~500k+, where do they purchase their primary residence, is it UWS or a comparable suburb (i.e. Scarsdale, etc). I have a vague feeling based on my unofficial statistics that two lawyers or two finance types or two doctors etc are not moving to Scarsdale in droves. This is also largely driven by the woman. People who make substantially more than this number is where public schooling becomes less relevant a variable and typically people have multiple residencies.

In sub 200k demographic, people are clearly moving away from Manhattan (and Brownstone Brooklyn). This is an old trend of "diminishing middle class". However, this seems to only make real estate MORE expensive, since professional couples seem to prefer to live in a smaller space than having a longer commute.

anonymousbk, agree 100%

SF used to be a viable alternative, but CA f'ed up and now their street homeless is approaching 3rd world levels.

Parts of Boston and Chicago may be comparable to a 2nd tier city in Europe, but let's be honest here. People come to the US to either live in NY or live in LA/Miami, which are not comparable to anything in Europe.

Sluox and AnonBK, I am sure you guessed, I couldn’t agree with you more. I like walking in the city and having breakfast and / or dinner with family (I am very old fashioned that way) is too important to commute to the burbs.

Also, these comments about how horrible the NYC govt is are overly dramatic. And I don't like Deblasio either.

Sure, it still smells like trash in the summertime, but that's not new.

Also agree the homeless population is increasing, but this is not in every neighborhood. It's primarily in areas like Port Auth/Times square, ie, tourist/transportation areas. In my hood in the west village, there is basically 1 homeless guy, he is nice (seen him for over 10 yrs). Most people give him sandwiches, coffee, cash, and he just hangs out outside. Never heard anyone make a big deal about it although I'm sure there is some transplant from the midwest in our building who has a banking job making $500k that probably doesn't love it, but it is not exactly a war scene outside.

I understand there are areas/pockets of crime but if you feel fearful in most parts of Manhattan or Brooklyn today (at least the prime areas we are all supposedly discussing), then city living is probably not for you. My wife has family from the South and they visited a few months ago, saw 2 black students smoking a joint outside near Stuyvesant and freaked out. I understand why they could not live here (nor have any chance getting accepted into Stuy, but that's a different story). But to anyone who has been in/lived in large cities, it's pretty safe.

Now are taxes a problem? Yes, but consider that for the person making $1m+ a year who spent over $1k on 1 dinner last week, that is not exactly the straw that breaks the camels back - at least yet.

3% on $1m is roughly what a shitty boring suburban country club full of average students from state schools will cost you in the hellhole that is the burbs. I would pay double not to see those people ever again! I know many who would pay multiples of that.

We have essentially every type of culture, food, night scene, day scene, etc. We have great jobs in almost every sector. Capital is abundant. You can raise money easily and fund projects. Exiting a business is easy as well. MOST IMPORTANTLY - the avg NYC resident is easy to transact with. There is not the same level of bullshit social nonsense here that you have to deal with in other places.

Hate to say it bc as a new yorker there is nothing more fun than bitching about things, but this place is incredible! Whether today is the day to buy is a different question, but I think 20-30 yrs from now, NYC will just be better. You can ask students in the top of their class at Harvard, etc, where they want to live. This is the place.

Let me say that $350k is enough money to live in Manhattan if you have either one child and two children of same sex in public school. You would buy $1.3-1.5mm 2 bedroom apartment coop.

https://nypost.com/2019/09/21/residents-claim-homeless-have-overrun-ritzy-lower-manhattan-neighborhoods/

Sad sad sad. (Kevlar vest?!!)

Does seem like a lot of things are broken, and this clearly isn't unique to NYC.

More drugs in Chelsea than 40 years ago? Really?

I think a lot of the perception is around the 23rd St C/E subway station which is a magnet due to tourists using it for High Line access. I think most of what this article illustrates is how intolerant people in Manhattan have become to the slightest issues. The reality is that 40 years ago things were an order of magnitude worse. But in the last 2 decades people have moved into neighborhoods (and even moreso in Brooklyn) without any clue as to the character of the neighborhood, and the expectation that as soon as they move in it will transform to what they want it to be. An example:
https://nypost.com/2019/09/21/residents-claim-homeless-have-overrun-ritzy-lower-manhattan-neighborhoods/
My point is that when things get marginally worse (and there is some evidence that this is already occurring) which is somewhat of a surety whenever the next recession hits, that the tipping point for current residents fleeing some if these neighborhoods is a hairs breadth away from where it currently is.

A few years back at about 4AM I'm sitting with my nephew in his truck on a fairly desolate street on the East Williamsburg/Bushwick border and here comes this little blond haired, early 20s woman walking alone without a care in the world and both of us are shaking our heads. I've spoken to many such young women who moved into "the hood" and heard them say how all the guys on the street "have their back." They have no idea how delusional they are. Most of those guys are one lost check, one arrest, one bump in the road away from taking it out on them.
I think way too many people are spending millions of dollars on apartments/brownstones on streets where I personally know people who have been shot or at least held up at gunpoint with no clue as to the fairly recent history of the area. I don't think we are far off from at least one replay of the Nicole duFresne incident.
https://en.m.wikipedia.org/wiki/Murder_of_Nicole_duFresne

Recent example of what's on the rise:
https://www.nydailynews.com/new-york/ny-police-seek-suspects-lower-east-side-muggings-20190917-wckzor7hdng7vgy5gpg22wpnn4-story.html

I've been in NY since the late 80s, and in terms of infrastructure, it's miles ahead of where it used to be (air conditioned subways, lots fewer potholes), but it has clearly slipped in the last 5-8 years. I'm seeing more homeless on Lex between 55th and 65th (and knew somebody who was nearly killed in a mugging @ Lex/67th 25 years ago), and the number of people collecting cans all over town has gone through the roof (assisted by buildings now sorting their recyclables). Taxis got better, traffic got a bit better, then a whole lot worse (thanks Uber/Lyft). Taxes have increased, generally with benefits to show for it, but recently it looks like taxes are buying a lot of expensive band-aids, rather than our leaders developing long-term strategies for ensuring the stability of the city into the next generation.

Okay I'm tapping back into this thread. @30 I've been coming into New York City; Queens and Brooklyn since the 60s (I'm 55) visiting family etc. I moved to the lower East side in 1981, 188 Norfolk Street second address was 633 East 6th Street near avenue C. I was a bit of a street kid, though a 'straight edge' punk rocker for context. My ex-wife was born, raised and educated in NYC as were two of my children.

The city has never been a safer easier place to live! You cannot even compare NYC of the 70s and 80s to what we have now! To someone like me the 90s were a cakewalk. We are living in Disneyland.

This is a great city to live in and it was a great city to live in then in my humble opinion. Quite frankly there are many things I miss about New York of old, where each neighborhood had a truly distinctful flavor. Boack then you certainly had to be a bit smarter about traversing certain neighborhoods in the wee hours, but that was part of the fun and excitement of NYC. I used to go to music shows in Williamsburg in the very early 80s before anyone even knew such a neighborhood existed.

New York City is not Scarsdale, it's not going to be for everyone and you're going to have to be a little bit smarter and a little bit sharper to navigate some of its nuances. But this city is far from falling to pieces, quite the opposite it's expanding and getting better and a much easier place to live and get around. However all of this has come at an expense, and that is astronomical rent and sales prices. But if you want to live in this great City you can still do it by being smart about where you are going to live, there are still affordable neighborhoods within the confines of the subway and bus system. And when enough people move into those neighborhoods they too will become hotspots.

I'll throw one out there for those on a budget, Ditmas Park/Midwood.

Keith Burkhardt
#iloveny

NYC is going to be better for the rich and the poor, but harder and harder for the middle class

Middle-class can live here Anton if they want a Subway commute to work. Try Inwood, Washington Heights (I lived here on Edgecombe Ave), Hudson Heights, Midwood, Astoria, Jackson Heights, Flushing,Forest Hills, Crown Heights (some amazing deals on Eastern Parkway!), Bayridge, Sunset Park, Sunnyside, LES(Hillman Houses) and plenty more...

This is totally a reaction to, and evidence of, the increase in fear:
https://gothamist.com/news/cuomos-new-subway-cops-wont-be-required-wear-body-cameras

23rd & 8th is bad. The shelter at 25th & 6th causes an expanding daytime radius of beggars, plus the action of Hiline has moved interest west to 10th, resulting in many vacant storefronts on 8th. East Chelsea is the forgotten stepchild.

Until it is known if Trump will be president for another four more years, i think it's difficult to make any predictions. Many people think he will be reelected. If that happens he will really up the trade war which will have terrible economic repercussions.
He hates New York especially since the Southern District of New York is really socking it to him.
So if reelected he will think of something to get even.

The last time a president started a trade war, the Great Depression followed; not saying that will happen, but another four more years can do a lot. I'll take Elizabeth Warren, but I don't think she can beat him.

I like the fake native princess too, but just her personality, none of her ideas

One topic that I'll raise again, but NYC's long term fiscal situation is bad and shows no sign of improvement. Since it can't print it's own money like the federal government, it's just a matter of time before it runs into major trouble over how to balance its books. You can look to what Chicago is dealing with now to see the eventual end game when a city runs into this situation.

is the sky really falling this badly?

Rome didn't burn in a day.

Please, don't compare New York to Chicago ; ) but seriously, Illinois is in much worse shape than New York in general.

Illinois is in bad shape today, but the two things killing Illinois property are both happening or going to happen in NYC: rising property taxes and declining population. We've discussed the latter a lot and know it's already happening in NYC.

As for the former, property taxes must rise. Blas is spending $73 billion of local taxpayer money this year, up from $56 billion in 2014. He can afford to do that bc of the epic bull market. But when the music stops, taxes will soar. NYC already has the highest income taxes in the country except Calif (double Chicago's) and a high sales tax rate. It's hard to raise the income tax much when the economy isn't good, since it accelerates flight. Bit since property owners can't vote with their feet, they get hosed.

Meanwhile, in Chicago, where property taxes run about 2 to 2.5% of market value, "a lot of homes in Chicago are selling at 2003 or 2004 prices".

https://www.ft.com/content/e579e7a2-9d88-11e9-9c06-a4640c9feebb

Regarding Chicago / Illinois, an unlocked article;
https://www.chicagobusiness.com/residential-real-estate/home-prices-peaked-here-2006-were-still-way-behind

Actually, the third and the worst thing killed Illinois property are happening here in NYC: the Obama-like ideology

Keith,
According to that article New York is also still down from the last peak right next to Chicago.

I saw that. I wonder if they mean the whole state?

Chicago's down almost twice as much as New York. Though I don't know Chicago boroughs that well. It would be more interesting to see how it breaks out by individual neighborhoods.

My point is that them saying NY is still down from pre-recession makes me discount anything they have to say.

Chicago varies by area just like NYC. The near-north shore is suffering badly, as it's full of too-big houses with huge property taxes (by local standards, low for NY). The schools there are as good as they get for public schools (New Trier). But sales are very slow and prices falling. West Loop is very hot and popular with younger ppl and increasingly by companies.

12 percent below peak for Chicago Metro is nonsense.

Putting on my journalist hat, you can't use Case-Shiller for major metros with a lot of apartments because Case-Shiller doesn't include apartments. Let's look at numbers from the Illinois Board of Realtors: 2006 Chicagoland PMSA Median Price 2006 $248,000. 2018 $242,500. That's down 2.2 percent on its face. It's actually full recovery if you adjust for the negative impact of the Trump tax bill SALT change.

Stats from here: https://www.illinoisrealtors.org/marketstats/public-archive/

ali r.

The SALT tax bill impact is very minimal. The real deal is FASAB 56, which protects the crooks to cook numbers

@Anton - I suspect I am not alone in having no idea what you are talking about. Can you direct me to some reading that might help me begin to understand your line of thinking?

@ali - Thank you for the counter argument and stats re Chicago.

It wouldn’t be me as I do not understand the rationale for what he says - but he is not obligated to provide rationale on a public chat board.

At the risk of supporting random claims of meaningful impact on housing prices, FASAB 56 relates to changes in how the details federal budget information are presented, to prevent the disclosure of potentially classified information. As a result of earlier changes in how the government's finances are required to be presented, it was felt that the presentation according to GAAP might disclose classified information. FASAB 56 negotiates the need for disclosure against the need to not disclose national security interests. How this affects housing prices is left as an exercise to the reader.

real estate prices are always cyclical. ny is "out" these days. prices are likley to decline by another 10 to 20%. but, ny will always attract buyers. just like london, paris, hong kong or manila. as with every investment, you need to make sure you are not over-paying. i think that's the key.

FASAB 56 allows crooks to cook data and reports in ways that don’t reflect the truth, under the guise of the very grey area of how information is classified and how such information is handled with respect to unclassified reports. FASAB 56 also undermines the reliability of government accounting standards and financial statements to such a degree, that from a public perspective they become worthless. It also allows the addition of misleading information and information to be omitted on spurious grounds. This lack of transparency is staggering, open to potentially serious abuse and was approved by the administration.

In a broader context, FASAB 56 is indirectly indicative of the US printing dollars Zimbabwean style and that there is actually tens of trillions more dollars in the system than conventional wisdom understands.

Fake good data plus excess cash, the result is the largest bubble in history. That's why housing prices hold up so well.