So when to buy?

No - but definitely not before 1/09 and probably much, much later.

Last year I almost closed, but the broker was so greedy that she burst the deal..:)
What a huge favor she did for me :)

Will be a different answer depending on the particular buyer (tax bracket, type of apartment, number of years to stay in apartment, etc.). For some, it might make sense to not buy anytime soon (if the immediately declines aren't enough, and we're looking at a flat couple of years).

But, I think its safe to say that with the exception of a crazy below-market deal, we are talking well into next year. Bonuses need to hit, and then you need the month or so for Q4 numbers to hit to show that... then Q1 2009 will see some more action. So I figure folks have until Q3 2009 pretty safely before they have to react... and there is a value in the "option" of being able to choose later.

switel...you'll know when to buy when everyone else, sensing a bottom, rushes to buy driving up prices...Buffet just called the bottom in financials.

ohh and I forgot the fed injected, money supply driven, MASSIVE INFLATION that will drive up prices also.........get ready..:)

-50%!!! when it hits half price, pull the trigger.

yup, it's true.

It's impossible to say. It is absolutely true that we appear to be seeing only the tip of the iceberg right now--things will definitely get far worse before they begin to improve.

Personally, I'm planning to sit on the sidelines and watch for a while; that said, if the right place comes along (I have very specific, hard-to-fine criteria) I'll pounce.

ohh and also when your wife can't take the waiting anymore and wants her own place now!......"You've been saying the market will come down for 9 years now i want my own place!!!"......."Yes Dear"

steveF, you are right. let's all buy NOW before we are PRICED OUT FOR EVERRRRR

btw, please point me to your over-priced listing that's been sitting on the market for the last year, and I'll make an offer of 20% more without even taking a look - it's in manhattan, and we know prices here never go down!!

gumball- how did you came up with 50%? I hope you are right!

"switel...you'll know when to buy when everyone else, sensing a bottom, rushes to buy driving up prices...Buffet just called the bottom in financials."

I think its the opposite... the bottom is when everyone is scared shitless and running the other way. Its what last week looked like in the stock market... Buffet is coming in after the fact...

make sense

chart a graph of rent v.s mortgage (30 yr fixed) in the past 20 years, when the graph approaches the historical norm over that time.... good time to buy. Of course unless u find a killer deal..

And how can I find the historical data?

am I priced out forever yet?

When prime Manhattan is $800 sq ft., Brooklyn and Queens New Developments are $400. About 40-50%. But who's actually keeping track.

This ALL ASSUMES that the person is not affected by the decrease in the Jumbo Conforming loan limit set to occur on jan 1--going from $729,750 to $625,000. Once that happens andyone borrowing above $625k will have interest rates from .5 to 2% higher, depending on the lender, etc. That makes a HUGE difference regarding (a) monthly payments, (b) interest costs and (c) the calculation regarding how much further down things need to go for it to be worth it to wait.

I personally think that even in current market the more desirable units will sell in the course of the next year in desirable locations so is it worth it to wait 6 months to 18 months to save $50-75k to pay it back in higher interest rates or, worse, find yourself in a situation by saving money but not getting what you really wanted. For me, I think that even if the price goes down about $75 k (which may happen in a year if the unit I want is still available), it does not make up for the cost of a higher interest rate being paid over 7 years (the length of time I intend on staying at the unit I want to buy)...the fact that congress is going to make it more difficult to buy given the current crisis is beyond me but they are:

see below:
>>>>>>>>>>>>>>
The limits have been raised in some counties to a high of $729,750 and a national average of $329,000. F.H.A. loan limits will range between $271,050 to $729,750. There are 75 areas in the U.S., out of a total of approximately 3200, that will be eligible for the highest loan limit of $729,750. Previously, FHA's loan limits in these very high-cost areas were capped at $362,790.
The increased loan limits are considered to be temporary. The loan limits are temporary through December 31, 2008.
<<<<<<<<<<<<

http://ezinearticles.com/?The-Raising-of-FHA-Loan-Limits-Have-Raised-Hopes-For-Economic-Recovery&id=1225077

and not to mention that mortgage amounts over $1mm are not tax deductible and increasingly difficult to get on income with a base/big bonus structure

you buy when you feel you found a place you want to live in for a long time at a price that is acceptable to you and in line with all the comps you have seen.....the market turbulence means nothing....you can wait it out and rent or you can pull the trigger, it's all an individual decision based on current financial and personal needs. Because NOBODY really kmnows what will happen in the future.

The people saying "Sometime in '09" are smoking it. More like 2019. When NYC real estate started crashing in 1989, it didn't start going up again until...1997! And that decline was much less painful that this one is going to be.

not true - started rebounding in 1993 - it just didn't reach 1988 levels until 1998.

"so is it worth it to wait 6 months to 18 months to save $50-75k to pay it back in higher interest rates"

Uh, YES! You can always refinance your loan at some point in the next 30 yrs when rates dip. But if you lock in a purchase at too high a price, that cash is gone forever.

p.s. $50-75K? Try 30% on an avg $1.5M purchase...that's about $450K. Are you a realtor?

and there wasn't that much softening in 1992 for the matter - maybe 2-3%- mostly just sluggish sales

kspeak has a good post:

http://www.streeteasy.com/nyc/talk/discussion/5247-perspective-nytimes-articles-from-the-1990s-slump

If this is like the last bubble bursting I'd have to say April of 2014 is the time to jump in.

I highly doubt things will go dowqn 30% in 1 year. that's is a bold prediction. it has already gone down 6% and that is at a time of very restricted credit. you must be joking regarding refinancing. given refinancing costs it is necessary to have a fairly significant drop in interest rates to be worth it and frankly interest rates are very low and likely to remain low in the next several months. therefore hoping to refinance after playing the market and assuming that property in NYC will go down a significant 30% is fairly risky. i am no realtor trust me. If i was I wouldn't be pointing out the possible problem with buying new devs that are closing next year. if you buy a new dev relying on the current FHA loan limits, which will decrease on Jsn 1 it is my understanding that yo may be getting yourself into a bad situation of having to later get a mortgage at a much higher rate, which is an expensive development.

I'm sorry but I just dont see $1 million apts in Manhattan going down to $700 in 1 year. I think that is highly unlikely but I guess thats because I still think there are enouh people out there that will buy at prices in between $1 million and 700k. i know a lot of people on here are alarmists, like beeing very negative and think themselves experts on everything but these are all, including mine, mere speculation and so we will see and I just think 30% drops will not happen in just 12 months, in NYC.

I still think NYC is a much better place structurally than in 1987 with lower crime, more attractive neighborhoods and a better budgetary structure -- in NYC, not the state. We shall see. 10 years of downtown is also an extreme outlier opinion and makes me wonder if the person even lives in NYC.

"and there wasn't that much softening in 1992 for the matter - maybe 2-3%- mostly just sluggish sales"

Nope. Price per sq ft for a 2 BR fell from $389 in 1989 to $322 in 1992.

Nice try. But all the data refuting your attempted misdirection is right here:http://www.millersamuel.com/data/form-1.php

Are you a realtor/realt-whore?

"not true - started rebounding in 1993 - it just didn't reach 1988 levels until 1998."

Sigh. More miserable crap. Source??

Here's one source posting the truth; i can post 20 others if you'd like. http://www.housedata.info/NY/

Admiral your sense of humor is more apt for a teenage site. You're being a silly guy, you know?

The shills on here spouting their crap have ***ONE*** singular purpose: to separate you from your money. Whether they are realtors trying to gauge an undeserved 6% out of you or simply are owners trying to unload an OPT (over-priced turkey) they foolishly bought themselves last year, the end objective is the same.

Real estate in Manhattan is unheaded unambiguously in one direction, DOWN, and not by a little, but by a lot. Regard anyone who tries to brush it off with a "oh, it's only 2-3% ...and then it will start going UP again!" with extreme suspicion. They're trying to feed themselves by taking food from your family.

Mimi: I'm not joking. This country is in the worst mess in 80 years, and if you haven't noticed, it all relates to ONE thing: Residential real estate. A lot of unethical leeches - agents, mortgage brokers, appraisers, etc -- helped put us in this position and goaded a lot of ppl into pissing away money they couldn't afford to lose. Now they have lost it, and the rest of us have to bail them, and the country, out.

In some third world nations, realtors would be swinging from trees by now...

Admiral, it flattened out by 1992-1993. But your point is taken. There is zero rush and people should look for 30% down from peak minimum. If we got 30% down, we'd almost not care if it were flat for a while because the buying over renting advantage would be reason enough to own, even without appreciation for a few years.

"SHOCK & DENIAL".....that's the first stage and that's where we are here in mid-September, 2008. Everyone knows that illiquid assets that aren't spectacular have already lost value. Auction prices for the best material (art) are going for record prices as the flight to quality has begun. I presume the same is true with real estate. Things that are average just aren't selling at all.

"REALITY" should set in by the end of the year when bonuses don't happen and layoffs become real. It's one thing to know it in your head and it's quite another to feel it in your checking account.

SO MY SENSE is that there will be a certain amount of paralysis between now and the start of the new year but with the television pounding home the point that the world is falling, people are starting to try to make liquid anything they own that's illiquid............and Cramer is yelling "gold".

Between FEBRUARY AND MARCH should be the time when the esteemed Manhattan real estate market will become flooded with product and sellers will be talking about TAKING ANY DEAL THEY CAN GET that they can swallow..........ESPECIALLY CO-OP SELLERS who have to be concerned about Board Approvals.

I am a buyer who just walked away from a better than average 2 bedroom apartment in the Lenox Hill area because the seller wouldn't renegotiate the price to which we'd agreed at all after the world changed last week. I don't need an apartment. It's a luxury and, frankly, now it's an investment. I have to believe that I'm not the only person in this position out there so, in the words of the 80's, there will be a PREDATOR'S BALL to which people with good balance sheets will be invited. My invitation is date the AIDES OF MARCH, 2009.

THOUGHTS???

Admiral, your NY data is not Manhattan data. Corcoran used to have a report on their site with Manhattan data, but they took it down because it actually showed a decline. I think kspeak is correct. It may have taken till 1998 to equal the 1988 peak, but in doing do, it made a 1992-1993 investment excellent... Obviously $100 (1998) / $70 (1993) is +30%....and what it did from there is insane.

dca1125- WOW. someone who gets it, that was awesome. You have restored my belief in the buyer. Good for you and if it matters, you are 100% on the money. Picking a bottom in RE is not hard. The "NYC RE Marketing Machine" will make you believe it's hard, but nothing can be further from the truth. RE markets take lots of time to adjust in both directions, as everyone can see, and it will give you the same indication at the bottom. It will be YEARS before we reach any sense of a bottom and I suspect a 30-40% decline at the bottom. Good luck dca, I have no doubt that you will do very well.

switel, you will probably get your first good fence post in the aftermath of the 2009 spring selling season. If that's weak as hell, then one waits for the 2010 results. There is a lot of nervous inventory out there plus quite a bit of new construction. Until those two variables are addressed by market forces, relax and collect interest on your down payment. One thing that I've learned over the years...every bull market plants the seeds for the next bear market & bear markets can last longer than one's ability to stay solvent.

Admiral, totally agree with your last post. I get a sense that too many folks do not have a grasp on what should be a disturbing economic situation and that it will take a long period of time to emerge from this mess. Cash is not trash & being highly liquid is not a poor alternative.

So we're talking right now of waiting a year or two to buy or maybe even a few years? Given that you want to buy near the bottom.

Are you buying in order to see a profit, or do you plan to die in the next home you buy?
Are you buying with a large downpayment, a larger downpayment, or cash only? Married? Kids?

I am not buying to see a profit, but I don't really want to lose either. Obviously, I would like to get a good deal and I don't think there's anything wrong with it. The price drop can make a difference between getting a one-bedroom or a two-bedroom. And the bigger unit we get the chances that we stay there more than 5 years would be higher. How long do we wait though?

Ask your Mom!

> it has already gone down 6% and that is at a time of very restricted credit.

It was 6% mean, 7% median, and that was after a 3% decline the quarter before. So you're already talking 10%... and that was through August. You HAVE to figure the panic has given it another 10%

i think it will go down another 10% over the next year, but i don't think it will go done 30% from where it is now...that is just crazy talk by the typical guys on this site who scream constantly, not just in this thread but throughout, that the sky is falling. i just don't think NYC and its real estate is quite the same as it was in 1987. maybe i am wrong. i am still going to buy, likely in first quarter of 2009 but will have to put 105k more down to get the same rate as I would today because of the REDUCTION IN THE FHA BACKED CONFORMING LOAN LIMITS.

30% down from the top is only 20% from here, if we accept that we are already down 10%. First quarter of 2009 is clearly too soon...and why would you ever buy in Q1, the seasonally strongest quarter. Some people will still get bonuses this year, why compete with them? People like you are why real estate takes time to hit bottom. There will be people buying early all the way down with rationalizations.

cleanslate - gotcha - how about keep saving more money and start investigating, so that when you feel the stars are aligned for you you will have already done your due diligence - my bet: wait until mid to late 2010, but you'll never be able to pick the bottom perfectly - if you're determined to pick the bottom, you will only know the bottom after it's over - it's easier to know exactly what the perfect apartment to buy for your needs is

"i don't think it will go done 30% from where it is now...that is just crazy talk by the typical guys on this site who scream constantly, not just in this thread but throughout, that the sky is falling. i just don't think NYC and its real estate is quite the same as it was in 1987."

It's not the same - it's much more over-valued relative to rents, incomes, etc. 2 yrs ago, people in Miami said they could not fall 30%. "The sun! The beaches! The immigrants!" They fell more than 30%, and they aren't nearly done. They'll be down 50-70% when it's over, NYC 30-45%.

Here are the numbers from the aforementioned Corcoran report (the copy I had only went through 2004, but it shows the dynamic in the last crash nicely). I believe these are nominal.

$ Price Per Square Foot in Manhattan, 1975-2004
1975 50
1976 57
1977 67
1978 112
1979 150
1980 187
1981 210
1982 183
1983 223
1984 295
1985 315
1986 328
1987 369
1988 368
1989 367
1990 374
1991 337
1992 362
1993 289
1994 301
1995 294
1996 299
1997 340
1998 386
1999 450
2000 543
2001 624
2002 631
2003 688
2004 778

So what's the lesson....25% down, and really NOOOOO rush. 1993-1996 basically flat at the bottom. The time to buy was really the late 1990s when rents started to accelerate up and the purchase prices started to lag. Also the bottom in 1993 was equal to 1984...So 2004 prices (-30% from top) seems a reasonable expectation in the 2010-2011 time frame. I think this tells us that 2009 is likely too soon. 2010 may even be too soon. In the information age, however, this could play out much more quickly so who knows.

People are forgetting that this is not a normal downturn. Most are trying to compare this to some other correction. This is nothing like we have ever seen. This correction is going to make the 90's look like a joke.

Not saying that. Saying that it will be at least as bad as the 1990s. If you know it will be worse with high degree of certainty, then you should be making a ton of money off that view in the markets. 1982 was a terrible recession and it appears prices held up fairly well. But that's because interest rates were already so high and started falling. We're in the opposite situation. To call for much more than 40% down seems too aggressive. I can't however deny the possibility. My bid sits at $778, the 2004 price.

thats generally how real estate markets work. All the intertia that kept it going even while things went down, will keep it down for a while while even when things overall have turned better.

Also important to note... there was no decline in 2000-1. And I think that was part of the problem. There was no shakeout, and folks learned (mistakenly) that downturns were no big deal... because they didn't actually see a RE downturn.

I think this one is going to be more painful because its 13 years of bubble... definitely the longest stretch on this chart...

HA. So you guys all found a nice place to rant ande rave. again, i just dont see it going down 30% from where it is now in the next year...other than that, could it go down 30% over 3 years, maybe but i think its more likely to, over the next year, go down another 10-15% and remain down at that level for a couple more years then start creeping up again...

That said I am interested in a unique unit in a particular building in an area where I think I will live from in between 7-10 years. i really like this particular unit so I am only competing with those who want this unit and think that it behooves me to wait a few months. if an offer is made i may jump in earlier, who knows, but I am not buying to hold and sell in 2-3 years and no I definitely do not expect the downtown in NYC to last more than 3 years.

in my building where I am renting an expensive 1 bedroom rents have gone way up so i think if this is a pattern city wide it will also be a countervailing force to the acquisition market...i know for a fact that the same one bedroom i have a two year lease on with termination rights would now be available -- in my bldg for almost $1000 more per month and in fact two people just moved in paying that much which i think is crazy since I started this lease just 4 months ago.

That seems like a big time increase.

thrinald...a little education for you.....below attachment caused the 30% decline combined with cold war induced recession and crime more than 3x worse than now......simple facts for a simple mind..you understand it now right? Until we get that perfect storm again with inventory levels that are un-effin- believable! we are flat to up.....Glad I could help you learn something...:)

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1132752161iuzhS&Record=6

No one said 30% next year you moron. No one cares about next year. People are trying to talk through where it could bottom and when. And your expectation that the downturn will likely end within three years is silly. There is simply no history to support that belief. Idiots like you are why this market will take time to bottom. All along the way there will be an idiot like you to transact.

Steve, I probably paid more in taxes than you earned last year. Only a fool would present opinions as facts. In case you haven't noticed, we have a perfect storm. Inventories will likely balloon as sales continue to grind lower. We don't need the same perfect storm, we have a new version. As history always repeats, but varies. A cold war induced recession? WTF are you talking about? Who told you the early 1990s recession was cold war induced? What does that even mean?

easy big fella, easy...go take your medication... your really not a creative guy are you, not much of a vocabulary either. use the word idiot 3X....I'm sorry I upset you so,... guess I got to you huh :) I luv it! blood pressure up alittle, not good for the health. take deep breaths now........ I think you are wrong that we will bottom fast and sideline buyers will be rushing in. Every buyer is watching and waiting to pounce..just like you. btw your oct rent is due.

"A cold war induced recession? WTF are you talking about? Who told you the early 1990s recession was cold war induced? What does that even mean?"

okay genius do you remember the soviet union? do you remember that since the end of WWII the world was on the edge of nuclear armeggedon? Do you remember?...okay you got it?? need a little more time?? ya know nuclear ballistic warheads..ring a bell??...fine you remember. Well, the country relied heavily on defense buidup which went away in the late 80's with Gorbachev and the breakup of the soviet union. So defense spending dropped off a cliff inducing a sharp recession....Man i feel like I'm teaching a 5th grader

Sorry. No one with any sense attributes the end of the Cold War to that recession. They actually refer to the end of the Cold War as the beginning of an era of "peace dividend". That recession was brought on by a real estate correction and a contraction in the financial industry. Sound familiar? Don't you have an open house today where you sit and cry alone, wondering why no one is willing to leave the office midday any longer, if they have a job at all?

Go back to the cabinet where they keep the canned goods for the struggling brokers. Your is spelled you're in this context. And you're an idiot, yes an idiot, idiot. You must be a broker. I hope you socked away some dough. Think about the police academy. Crime is on the rise. "Every buyer is watching". Imbecile, do you see anything about the end of the Cold War here?

http://en.wikipedia.org/wiki/Late_1980s_recession

Steve, I probably paid more in taxes than you earned last year

thrinald, I'm a bull because I own, your a bear because you don't own. Yet you say you have more money than me? You are a BSitter. You probably do pay way more taxes than me as I shelter my income. Thanks for paying for the bailout!! :) I'm mopping up the floor with you thrinald your making it worse for yourself......it makes me feel so good your a bear.

whatever guy....

You're a brain dead broker. Make that 1 bed you own last a lifetime. Your (not you're) earnings power is going away.

thrinald is just a bitter dude...look at all of his negative posts, combine them with dco, eddie wilson et al...its the same thing over and over but newly created unsupported arguments thrown in...i will buy in the next year and stay put for 7-10 years an enjoy the nice apt with a low fixed rate 30 year mortgage and worry about where the market is in 7 years...bottomline is that i like the apt and area too much to hope for a material decline in the next year and hoper that during that time no one else finds and likes this place enough to pick it up.

"in my bldg for almost $1000 more per month and in fact two people just moved in paying that much which i think is crazy since I started this lease just 4 months ago."

is this really your example of rents across nyc skyrocketing? seems a little counter intuitive that rents for a 1bd would skyrocket $1,000 in 4 months given all the stuff that is going on in the city. but what do i know?

To be fair, its pretty clear that the bitter tag has moved from the bears to the bulls... the decline has already started.

Yeah I am only bitter in terms of being talked down to by a broker. The attacks on a simple analysis of how low we might go are pretty telling. Also the self aggrandizing "I own" declarations are funny. The idea that a real estate investment could be bad, or simply unwise or aggressive...to suggest such a thing is villainous, or spewing negativity.

On Housing Prices - Economists see the bottom in the 3Q09....then flat until 3Q10, when prices begin to clime again. Although - that is a national statistic - NYC is anyone's guess....but I'd say if you're a buyer, make your move within the next six months. And if you're picky and want all the bells & whistles, don't plan on a discount - there's always a market for fabulous. Rather, look for an ugly duckling, low-ball them and use your creativity to create a gem.

"Rather, look for an ugly duckling, low-ball them and use your creativity to create a gem."

You should run a dating service...

Umm, my boyfriend wouldn't think that was very funny....

no it is not evidence from all neighborhoods but just an example from one neighborhood in a desirable building just as the apt I am interested in is in a unique location in a desirable building...I have heard from others that rents have gone up or remained steady and all I was writing about earlier was the fact that rising rents will be a countervailing force to be considered. If you think rents are going down in luxury buildings in the desirable neighborhoods of Manhattan please let me know because I haven't seen that and would like to terminate my lease if there was a material downward move

everything i have heard (and i admit this is anectodally) is that rents have been falling across the board.

"its pretty clear that the bitter tag has moved from the bears to the bulls"

you must read a different board, not that there are any real bulls

right on Cheetah...buy, enjoy and build wealth. Thrinald I'm not a broker, genius...I own investment property.

> "its pretty clear that the bitter tag has moved from the bears to the bulls"

> you must read a different board, not that there are any real bulls

Yes, they are apparently now in hiding (or trying feverishly to sell).
;-)

"Bitter Renter" is now an oxymoron...

"I have heard from others that rents have gone up or remained steady and all I was writing about earlier was the fact that rising rents will be a countervailing force to be considered. "

Stop listening to those "others", then... the stats from a couple of sources - REBNY and the observer - show declines in rent YoY across almost all classes and neighborhoods in Manhattan of 5-8%.

hi all,

i'm trying to track high-end property being discounted since the credit crash. now, for some reason many properties under "recorded sales" state "No listing associated with this closing". why is that? i thought StreetEasy covered all listings available. is there any way i can check at which price these properties went for sale before entering into contract?

thanks!