Answers for the low-budget buyer

I will buy when:

1) It is true cheaper to buy than rent

and/or

2) Prices start going up again - which is the only way you know it is the bottom. They usually don't spike, just trickle up, so you have time.

But everybody is different. There's something to be said for not timing the exact bottom if you love a place. For me, though, I'm at the point in my life where I can buy the place I want for 20 years - but also am in the process of nailing down a great rental where my family and I could live comfortably for the next 5 years. So I'd like to get the best possible place for my $$$, do it once and do it right and not trade in and out after that. It's a personal decision though. For some - people who hate moving and people who won't be upset if they miss the bottom - it may make sense to buy sooner.

kspeak,

care to share some info on the rental you are nailing down? i am starting to look for a new rental myself while i wait out the decline in prices on a place to buy. any advice?

You can't do 90% financing, especially if you are buying a co-op.

Smooshie- it's virtually impossible to get 90% financing now & even 80% is hard. Most banks are only willing to loan 75%. That being said, you should really talk to an experienced Manhattan mortgage broker to find out what you can afford & if you'll be able to get a loan for 80%. While prices are coming down the "starter" apartments or "budget" apartments are the only things selling right now and I don't think the prices for that segment of the market will come down much more. Over 70% of the deals that my company did last month were for apts under $1M. It's really the higher end, luxury apts that are experiencing the greatest price reductions. You might want to start looking at apts now just to see what's out there in your price range.
sophia.anzaroot@elliman.com

While Sophia is correct, there are some ways around the banks' requirements. I have some craft clients who are working an FHA loan for their down payment. Sure, the biggest price reductions are on the high end, but the government's (admittedly crappy) attempts to restart the housing market are focused on first-time home buyers in the conforming loan range.

If you are that type of buyer, now is the time to be preparing to buy. Speak to a mortgage broker and do your homework. The sands of the mortgage market are so shifty that I now have my clients talk to their banker or mortgage broker before we even begin our property searches. It's just weird out there, but there are good mortgage products out there for buyers with brilliant credit and low expectations.

So: should you buy now? Yes, if you do your homework, get your paperwork together, prequalify for a great loan, and are ready to strike when you find a place that will be cheaper to own than to rent. A tall order, but people are indeed finding these deals. If you don't qualify for a great mortgage, though, it may make sense to wait for prices to come down. If you wait, chances are you'll pay less for the apartment, but at a higher interest rate.

^^^by craft, I meant crafty. Although they may be knitters, too.

smooshie, i`m in your boat. looking for 2bed apartments in the $400K to $550K range. hoping something decent comes up on the Upper East or West Side but being more realistic with wash heights/inwood. we are willing to take a little gamble that prices fall a little more in the next year. also, as a 1sr year teacher in NYC am also waiting to see if bloomberg sh*tcans me before we buy!