So what do you think happens to the numerous 2+ bedroom apartments the people purchased over the past 2-3 years that are now being listed for rent at astronomical prices? I keep on seeing 2 bedrooms being listed in some of the new developments for $8k+/month. Clearly the owned is trying to unload the property to cover their cost/mortgage/monthlies. Do you believe that is sustainable? What will... [more]
So what do you think happens to the numerous 2+ bedroom apartments the people purchased over the past 2-3 years that are now being listed for rent at astronomical prices? I keep on seeing 2 bedrooms being listed in some of the new developments for $8k+/month. Clearly the owned is trying to unload the property to cover their cost/mortgage/monthlies. Do you believe that is sustainable? What will happen to those apartments/prices? If someone bought a $2mln apt a year+ ago and now cannot afford to carry it and is unable to rent it out...do you think the owner will take the loss on the sale or the loss on the rental (drop the rental to say $5k/month but still own it hoping for a turnaround in a few years then sell making up for the loss?) In this market it just seems absurd to rent an apartment for $7k+/month but that is all I am seeing these days. (Relatively new building, full service etc etc). Do you think it is possible to bid them well below ($5,500 vs. $7,500 ask and lock in a 2 year)?
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Response by stevejhx
about 17 years ago
Posts: 12656
Member since: Feb 2008
nybits.com - real market rentals, and their prices are falling.
You can ask anything you want, but how many people can afford $8,000 a month in rent? Not too many, methinks, so if these potential landlords try to market their apartments just to cover their costs but can't, either they'll be bleeding quite a bit or they'll be forced to sell. Of course with the huge overhang of inventory also at ridiculously high prices - because owners don't believe real estate prices fall because they haven't in years - this leads to a vicious cycle that is eventually broken by falling prices.
For the time being I'd stick with no-fee market-rate rentals.
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
this apartment was sold then listed for rental
22 West 15th Street #9A
STREETEASY HISTORY
01/11/2008
Listed in StreetEasy by Elliman at $2,200,000
02/20/2008
Price decreased to $2,100,000
03/06/2008
Price decreased to $1,995,000
07/09/2008
Elliman listing entered contract
07/09/2008
Price decreased to $1,895,000
09/17/2008
Elliman listing sold
22 West 15th Street in Flatiron
STREETEASY HISTORY
06/20/2008
Listed in StreetEasy by Elliman at $9,980
07/28/2008
Price increased to $10,050
07/29/2008
Price decreased to $9,800
08/04/2008
Price decreased to $9,070
08/17/2008
Price decreased to $8,800
08/25/2008
Price decreased to $8,500
09/25/2008
Price decreased to $7,900
10/16/2008
Elliman listing no longer available
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Response by kspeak
about 17 years ago
Posts: 813
Member since: Aug 2008
Personally, I would need a discount to live in somebody's condo. I think it would be irritating a bit -you don't have a super in the same way, you can't renew as easily (they may sell or move back in)
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Response by mbz
about 17 years ago
Posts: 238
Member since: Feb 2008
I personally believe rents will fall dramatically. They have already started but I'd say we're in the 2nd inning. And yes, I think you can make low bids with a decent chance of success. I have a friend that recently bid 30% off asking in Soho recently and got it because he was the only bidder (for a rental).
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
what was the price range?
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Response by aboutready
about 17 years ago
Posts: 16354
Member since: Oct 2007
Doesn't any loss become tax deductible? Depending on the tax bracket, they may be willing to take a fair amount of a loss monthly, write it off, and hope that in two or so years the market will rebound and they won't have to short sell.
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
tax deductible off of a capital gain
plus, a tax deduction is only a dampener to a loss, not a wipeout of the tax loss.
personally, I wish to remain a hefty tax payer in my life ... means I'm making money
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Response by anonymous
about 17 years ago
Rents coming down. Wait till Tuesday and you'll see tons of condo chops. That still won't mitigate brokerage fees and the 2 months free that most buildings are giving now.
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Response by Admiral
about 17 years ago
Posts: 393
Member since: Aug 2008
I agree that we are in the early innings here. Most people price these things now to meet their monthly nut. Unfortunately, that's not where the market is. Some of these investors will need to unload their properties, and take a huge haircut to do so. Others will try to hold on to their properties (or have to b/c they can't come up with the cash to close the gap btwn what they paid and what they can sell for)...they'll try to gauge $8K for a 2BR w/ a market price of $5K, but will have to come back to earth. And they will...
By Sept, you'll see rents down 25% from their peak, and sales prices down 50% from peak.
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Response by julia
about 17 years ago
Posts: 2841
Member since: Feb 2007
the service you get in a rental bldg. is much better.
nybits.com - real market rentals, and their prices are falling.
You can ask anything you want, but how many people can afford $8,000 a month in rent? Not too many, methinks, so if these potential landlords try to market their apartments just to cover their costs but can't, either they'll be bleeding quite a bit or they'll be forced to sell. Of course with the huge overhang of inventory also at ridiculously high prices - because owners don't believe real estate prices fall because they haven't in years - this leads to a vicious cycle that is eventually broken by falling prices.
For the time being I'd stick with no-fee market-rate rentals.
this apartment was sold then listed for rental
22 West 15th Street #9A
STREETEASY HISTORY
01/11/2008
Listed in StreetEasy by Elliman at $2,200,000
02/20/2008
Price decreased to $2,100,000
03/06/2008
Price decreased to $1,995,000
07/09/2008
Elliman listing entered contract
07/09/2008
Price decreased to $1,895,000
09/17/2008
Elliman listing sold
22 West 15th Street in Flatiron
STREETEASY HISTORY
06/20/2008
Listed in StreetEasy by Elliman at $9,980
07/28/2008
Price increased to $10,050
07/29/2008
Price decreased to $9,800
08/04/2008
Price decreased to $9,070
08/17/2008
Price decreased to $8,800
08/25/2008
Price decreased to $8,500
09/25/2008
Price decreased to $7,900
10/16/2008
Elliman listing no longer available
Personally, I would need a discount to live in somebody's condo. I think it would be irritating a bit -you don't have a super in the same way, you can't renew as easily (they may sell or move back in)
I personally believe rents will fall dramatically. They have already started but I'd say we're in the 2nd inning. And yes, I think you can make low bids with a decent chance of success. I have a friend that recently bid 30% off asking in Soho recently and got it because he was the only bidder (for a rental).
what was the price range?
Doesn't any loss become tax deductible? Depending on the tax bracket, they may be willing to take a fair amount of a loss monthly, write it off, and hope that in two or so years the market will rebound and they won't have to short sell.
tax deductible off of a capital gain
plus, a tax deduction is only a dampener to a loss, not a wipeout of the tax loss.
personally, I wish to remain a hefty tax payer in my life ... means I'm making money
Rents coming down. Wait till Tuesday and you'll see tons of condo chops. That still won't mitigate brokerage fees and the 2 months free that most buildings are giving now.
I agree that we are in the early innings here. Most people price these things now to meet their monthly nut. Unfortunately, that's not where the market is. Some of these investors will need to unload their properties, and take a huge haircut to do so. Others will try to hold on to their properties (or have to b/c they can't come up with the cash to close the gap btwn what they paid and what they can sell for)...they'll try to gauge $8K for a 2BR w/ a market price of $5K, but will have to come back to earth. And they will...
By Sept, you'll see rents down 25% from their peak, and sales prices down 50% from peak.
the service you get in a rental bldg. is much better.