Rich Dad Poor Dad Robert Kiyosaki

I'm sure he specifically mentioned Manhattan, didn't he?

I don't think he meant "buy anything today." He was making a point that you should be buying in a buyer's market, not when real estate is going up, mortgages are easy to get and everyone else is buying. Kinda makes sense, if you think about it...

No, Steve, H didn't mention NYC. Manhattan is still crashing/nose-diving/plummeting. Don't worry.

Why waste your time posting on here? You could be out buying. Buy Buy Buy!

Wow, I guess you showed me who the boss is...

Why waste your time posting your time posting on here? You could be out, spending all the money you are saving by renting. Why aren't you in the US Virgin Islands? Or on your way to the Hamptons... In your Lamborghini... With your girfriend, who is definitely hotter than mine...

The problem is that prices are still so high in NYC that renting out an apt. to a tennant won't even come close to cover the monthly mortgages+tax+cc, making it difficult for investors to buy with only a 10% or 20% downpayment. Still though, this maybe as good as it gets for a buying opportunity, a lot of European investors with big $$$ and americans with big$$$ are coming to NYC, keeping the prices up there.

I dont understand why europeans are buying here in the USA.

Sure 'some' of the upwardly mobile are keeping it empty for 44 weeks of the year and just like to have a place in NY to crash when in town or to lend out to friends but how are the rest of the purchases being funded?

Also as an overseas purchaser do you have to pay tax on any rental income earned on a property here in the USA? (or capital gains when you sell)?

What happens if a property is owned by someone living overseas but earning income in the usa?

Anyone have any concrete information on this rather than folklaw heresay?

tia,
Dean

"I dont understand why europeans are buying here in the USA."

Because they're not. It's another realtor hype lie.

*** Also as an overseas purchaser do you have to pay tax on any rental income earned on a property here *** in the USA? (or capital gains when you sell)? What happens if a property is owned by someone living *** overseas but earning income in the usa?Anyone have any concrete information on this rather than ***folklaw heresay?

There is no escaping Uncle Sam for "foreigners"
http://www.irs.gov/businesses/small/international/article/0,,id=96403,00.html

Or NYC's special UBT.

Nonresidents are subject to obligatory withholding.

http://www.nyc.gov/html/dof/html/business/business_tax_ubt_faq.shtml

There is probably no reason to rush to buy real estate outside of Manhattan. Take a look at monthly, quarterly, and annual S&P Case Shiller price data since inception. Real estate prices do not turn on a dime. Unlike stock market returns (uncorrelated monthly returns) residential real estate prices "trend" (very positive serial correlation of returns in statistical terms). Wait until real estate prices, in general, have at least bottomed out for a period of time. (You won't miss the boat!)

We are all familiar with the $1 billion subprime mess. The August 16 issue of The Economist has a fascinating article, "Ticking time bomb," discussing $500 billion in "option ARMs" whose interest rate resets ( 50% to 80% interest rate increases from initial 'teaser" levels) will be peaking in 2010 and 2011. This will put even more upward pressure on current record (since the Thirties depression) default rates. Residential housing futures (admittedly an illiquid market) are pointing to a further 15% decline over the next couple of years. So far they have been an excellent predictor of what the S&P Case-Shiller index for various metropolitan areas does. (I should point out that The Economist article, in general, was suggesting that the worst is probably over and we are at least approaching a bottom.)

All real estate is local. Some markets like Denver have held up well. Others like Miami have been a disaster. Manhattan, unlike the rest of the country, has just started its correction with quite small price concessions from very lofty levels. Right now there is a growing "buyers' strike." Lots of pent up desire but dissatisfaction with prices. Meanwhile, sellers are in denial but starting to gradually lower prices as a result of waning demand and competition from new construction. Much of that construction is temporarily being withheld from the market to prevent flooding but developers' inventories are increasingly bulging. Feels a bit like a game of "Chicken." Who will blink first?

Generally, falling real estate "sales" precede falling "prices." Sales have fallen and will continue to fall. Prices have started lower and will continue lower.

I'm frustrated as I'd really like to buy. Just doesn't seem prudent at these price levels. I keep a chart of Manhattan real estate prices from 1988 to 1997 in my Organizer and refer to it each time I get the urge to buy now.

Caveat emptor.

Usually in a market correction, prices fall very little, but then they fall a lot. When the correction first started, prices only fell 1%-3%. People were laughing at such a small decline. But they are not laughing anymore with prices down 30% in areas like southern California, Vegas, and Phoenix. Although I will say that I am surprised at how well prices have held up in the NYC suburbs, which are only down 7.9% per the Case Shiller Index. Considering the economy, you would think prices would be down at least double that much.

"how well prices have held up in the NYC suburbs, which are only down 7.9% per the Case Shiller Index."

It depends on where - the index includes everything from Bucks County, PA through Hartford. Things aren't so pretty in Suffolk where I'm sitting right now.

"I keep a chart of Manhattan real estate prices from 1988 to 1997 in my Organizer and refer to it each time I get the urge to buy now."

So do I - but as a permanlink to the Case-Shiller national chart.

"Who will blink first?"

Usually, no one "needs" to buy - you can always rent or move someplace else. People need to sell, and they don't have the flexibility of moving somewhere where the market is firmer.

I was referencing Bergen County, NJ where I am sitting right now. Bergen is considered to be the premiere county in New Jersey. On the other hand, the market in neighboring Passaic County is doing much worse since their foreclosure rate is 4 times higher than ours. Their foreclosure rate is roughly the same as California's and Nevada's.

Ditto Nassau and Suffolk - Suffolk is suffering much more. Not so much my part of it - a decline from last year's highs, but nothing substantial (yet) - but even the Hamptons are in bad shape.

"Usually, no one "needs" to buy - you can always rent or move someplace else. People need to sell, and they don't have the flexibility of moving somewhere where the market is firmer."

Good point, Steve.

I don't know Steve. I have heard of situations where the wife says to the husband "Buy this house or I will divorce you." In that case, you NEED to buy.

...or find a good divorce lawyer.

> Ditto Nassau and Suffolk - Suffolk is suffering much more. Not so much my part of it - a decline
> from last year's highs, but nothing substantial (yet) - but even the Hamptons are in bad shape.

Nassau is down at least 10% already in all the more expensive spots.... Great Neck, Five Towns, etc. Fire Island, I don't know as well, but that is a fairly small inventory and a pretty unique spot. Call if the 15 CPW of nassau. ;-)

But, I'd certainly call that substantial. I'm seeing formerly typical $750k one families listed for 15% less than what they sold for in 2007.

has anyone figured out that EddieWilson and Stevejhx are the identical person?

Same positions
Same style of posting a negative article as worthy of its own discussion topic
Same argument style
Same style of rebuttal, interspersing the original quote and his response
Same claim to have worked at an investment bank, but seemingly not in the investment banking group itself
Same language style and pedantry related to language
Same self-corrections of their own posting
Same level of anger
Same reference to "they" and "them" as out to get people who don't think real estate is going up
Same argument with LICComment

what else is the same ... anyone care to point it out?