Should we wait to buy?

Absolutely you should wait. Prices are just beginning to fall. Rents are also beginning to fall, which only hints that sale prices will have farther to go. If ever there is a time to wait and see, this is it.

There is nothing indicating that prices are going to go back up anytime soon--it won't hurt to wait a few more months to see how things pan out.

In the last real estate downturn, it took 3 or 4 years for prices to bottom. This time could be much worse. On the other hand, some of the buyers in the last downturn did very well only several months in. Remember, not all property turns over at new lower prices. Only 10,000 units or so a year trade hands, so you should be looking if you have the finances and flexibility.

A downtown 2-bedroom for $700k? You may be waiting a long time.

Far too much uncertainty right now for my taste. Data are showing we are 15-25% off peak and continuing a sure and steady decline. Even with these well known facts, some people are buying. Why? I have no idea. Maybe someone could offer their personal rationalization for purchase today in this market. Maybe I'm missing something.

I have been looking to buy for 3 months now. When I find something that I like, I put in bids and see if I get a counter. I'm not being unreasonable, but around $1000k/sq ft for condos, which I have been looking at. Some sellers don't like it, but I've done my research and found that seems to be the market price right now.

I don't know how much substantially lower they will go from here, maybe as low as 900? Not sure, but I'm not thinking it's going to be half off or anything drastic. This is still New York after all.

Some people have non-monetary reasons to buy now (e.g. they are moving, getting married, having kids) and don't want to wait to see how the market shakes out. Also, we've already been trending down for 18 months. We may not be all that far from the bottom.

I don't see the bottom being anything other than a long, drawn out affair, offering plenty of time to jump in. My choice would be to buy into the recovery rather than the decline. Just a personal preference.

Not a huge amount of quality supply coming into the market. $1000 psf should be the bottom. I think over a 5 year period we go back to the highs and beyond. Manhattan is a unique market. Yes the financial industry is very important to the local real estate market and prices, however there are many many other factors like international buyers, high profile celebrities, old money, etc that will influence and put a floor under the current downturn. There is still a huge demand to live on this tiny island and will always be.

tdadlai - Here comes the reaction to your post. Duck and cover!

Whether right now is the right time to buy depends on what type of buyer you are. The ideal buyer right now would be somebody who rents and has great credit to take advantage of the lowering interest rates and stimulus plan. The market may be still botomming out, but I recommend being at least prepared and finding your ideal home and location. I've heard usually 1 in 10 sellers are actually motivated and serious in selling below market price, so you or your broker has to do their research and be in position for that right deal. Overall, low demand, high inventory, and low interest rates are favorable conditions for most buyers. For an "all cash" or "cash heavy" buyer, low demand, high inventory, and high interest rates are favorable since prices are really pressured to go down at that point.

Manhattan is a unique market... international buyers, high profile celebrities, old money, etc...

HAHHAHAHAHAHAHAAHHA.

buy know or be priced out forever!
1000 sq ft is the sure bottom, maybe 900.
This is NYC.
Don't even consider the fact that in 2003 or 2004, when the world economy still existed and the US had a surplus, and rates were as low as now, 1000 sqft was, like, a price fit for 15 CPW almost.
BUY BUY BUY
Make an emotional decision with your life savings
Listen to your realtor. She is your friend.

> A downtown 2-bedroom for $700k? You may be waiting a long time.

Yes, it could be a good 30 seconds until the page loads...

Search "all downtown" under $750k....

found 71 listings.

Wow, that did take a while... it was 45 seconds to run the search.

smmgio, how is an 8k stimulus tax credit which phases out if you make 95k going to help anyone in the Manhattan RE market?

I would say that, based on the OP's query, they haven't been looking too long so my advice is to keep looking at streeteasy & start going out to open houses with no thought to buy now & just get a feel for the market, what's available & what prices are & take your time. You've got a flexible rental so just start gathering information & in a number of months you'll feel like you know what you're doing. Good luck & have fun!

I see that several old posters are taking new names. Congrats to EddieWilson (nyc10022) for at least only switching names every 6 months or so and only after making a big promise to streeteasy that he couldn't keep. The rest of you (and me too) are just a bunch of trolls. Admiral is one of the best ... anyone know what his other names are?

Dwayne Pipe is one

I am wondering what it will take for prices to really start falling. If someone bought in the last 5 years and wants to sell now, they will lose money, and may not even be able to pay back their mortgage, so why would they sell? I could see how deals might come to market if someone bought in the early 00s and can sell now at a small profit. But when are prices really going to fall? And how much are people offering now below asking, 10%? 20% Thoughts? Comments?

>>If someone bought in the last 5 years and wants to sell now, they will lose money, and may not even be able to pay back their mortgage, so why would they sell?<<

Because they need to 'upsize', are being relocated, lost their job... there are myriad reasons that force people to sell.

As to when prices will 'really fall', they've been steadily declining for months now. They will likely continue to fall, but we won't necessarily see a sudden crash; it'll be a drawn-out downturn. There is no set formula for offers below ask; it all depends on how realistic the asking price is to begin with. A motivated seller with a well-priced property will sell. A head-up-the-ass seller expecting peak will not.

> I am wondering what it will take for prices to really start falling.

We're down 20-25%. Thats the fastest decline in the country so far.

What do you define as "really start falling"?

old money? celebrities? that is good.

we live in a post-madoff era. a lot of old money doesn't exist anymore and is being forced to sell real estate, not buy it.
europe is in the same boat. a lot of countries over there are worse off than us right now. celebrities purchasing to help form the bottom and get things rising again isn't really worthy of a comment.

"however there are many many other factors like international buyers, high profile celebrities, old money, etc that will influence and put a floor under the current downturn."

Wasn't that same rationalization used to explain why we wouldn't decline in the first place?

> celebrities purchasing to help form the bottom and get things rising again isn't really worthy of a
> comment.

Whoops... yes you are correct. It is a pretty funny notion.

nikbean: There are people who, because of life changes, feel they need to buy. If you are not one of those people, do not buy now. Even taking the best case scenario (which I don't believe), if the economy begins to turn in 2009, real estate will stay flat. It is sticky, which means it lags behind the general economy. Even celebrities and foreigners have advisors that understand economics. The more likely case is that real estate will be going down for some time here, as nobody knows which shoe will drop next.

I think we'll actually be seeing a major uptick in celebrity bankruptcies. They manage to lose their shirts in all kinds of economies, but this one will be easier...

I think you are right: http://www.brownstoner.com/brownstoner/archives/2009/02/norah_jones_ste.php

Wow, don't know why Norah Jones would pay that much for a place on Cobble Hill. It's as if she has spent too much time doing Hoagy Carmichael renditions and not enough time managing her finances...

Oh, wait...

Celebs are generally the ones buying TOP of market, not bottom...