Buyers mkt., buy now or wait?

We just bought a 2BR a couple months ago after torturing ourselves over whether to do it. We were lucky to find a pretty good place in our price range (after we expanded it greatly). Our final analysis was that we would buy a place if we could legitimately stay there for at least 3-5 years. I'm hoping that that gives us time to ride out any downturn. We would not have done it if we thought we could only stay there 1-2 years. So I say buy if you are going to stay awhile and rent if you can;t find a place worth staying for a few years.

a website that has loads of articles for you is urbandigs.com

I agree with the people who bought the 2 BR that you should figure out what your time frame is likely to be. I just bought an apartment and I am very happy I did so. After taxes, I am paying the same as I did for rent. I would just make sure that you have enough saved to cover the closing, moving, and also have a cushion. Things always cost more than you think.

thanks for the helpful comments, 1 reason i think the market is changing (slowing down) is that now brokers return my calls and have time to talk to me during open-houses:)

It doesn't make sense to buy now. If you put 200k down on a property and take out an 800k mortgage and prices decline 20-25% (I think this is realistic before we see them go up again) - you've wiped out all the equity you have in your house. Now you have lost your 200k and have negative equity in the house. You also need to keep in mind that it will cost you 6-10% to see your apt (brokers fees + flip tax) and you may have to pay 2-4% of the purchase price simply to buy it (mortgage recording tax on condos, mansion tax on any 1mil+ property and closing costs). I think buying in this market is just asking to lose money. Think about the kind of interest/stock market gain you could have on that 200k down payment alone. The math just doesn't add up now unless you want to hold for 10+ years.

true, to the above post...
I am the original poster, my budget is actually around 300k for a jr4 in Harlem.
I have seen some "deals" in Harlem with HFDCs, but the flip taxes are very high...

I saw an apt for 125k all cash deal for a 2bedroom that needs total renovation in a bldg with horrrible finances and few crackheads on the first floor

I checked out urbantribe.com. His argument against buying is based on his personal experience as an equity trader; however comparing an equity trade to buying/selling a NYC apartment is like comparing apples to oranges.

If you're looking to make money off of this in the short term (2-3 years), with all the costs involved (brokers fees, flip taxes, prop tax increases) it's probably not worth it when you consder the alternative of renting (rent pmts + amount of interest you're earning off the down payment while renting).

But if you're looking to stay somewhere for at least a few years then it's probably worth it. Most people buy a house/apt to live in not for the sole purpose of investing. And many who have purchased 'starter' units have ended up staying there for over 5 years.

...so it all depends on your situation and perspective.

A 20-25% decline in price means that the US economy has completely gone down the toilet. If the economy is that bad, your hypothetical investment will not do so well unless you are the world's smartest investor. That is a doomsday approach and if you think that way right now, you're not buying for many years to come.

Even if your investments don't do so well, you won't lose the entire 200k and you can get a guaranteed 5% in CDs. Even if prices only decline 10%, you're still far better off renting unless you hold onto your property for 15 years or so. BTW I think we'll be lucky to get out of this with only a 20-25% decline in prices. I do think we'll look back at the real estate mania that has gripped this city one day and say "1.5 million for a 1bed/1bath apartment - what were we thinking??!!"

check the reduced priced at www.natefind.com you will see that asking prices have dropped 25%

lol, my prev post was deleted because i mentioned natefind????

Nope. We love Natefind. Your previous post was munched by the anti-spam bot, which has now been told not to do that again ;-)

I think you are looking at this from a purely invesment standpoint. People buy apartments for more than investment reasons - there is a psychological benifit to owning that you cannot put a pricetag on. According to your logic, nobody should buy for several years. That is not realistic or practical. I agree that you should not buy a place right now if you are doing it to make money or to sell it in a couple years, but people have to buy sometime. It is very possible that prices simply slow down or jus stay flat. If that happens, you would have lost the interest deduction for a few years and had to put up with rising rental costs/low inventory of rentals.

You can't trust people who give such blanket statements like " check the reduced priceg at www.natefind.com you will see that asking prices have dropped 25%". I checked the apts from 700K to 750K in www.natefind.com and found that the ones that were reduced (many have not been reduced and some have increased in price) were lowered between 1 to 4 percent. The highest reduction was around 6 to 7 % and they were clearly overpriced from that start. If and how much an apartment reduces its price depends on how well-priced or over-priced it is for this market (and if they need to sell now).

Check this web site: http://www.sheynkmania.com/housemath/

That site is neat, but it doesn't take into account brokers fees when you sell (6%) and any flip tax (1-3%). I like this site:

http://www.smartmoney.com/home/buying/index.cfm?story=rentown

As you can see - buying in this market is just asking to lose a TON of money...

The two comments above are clearly from brokers. I think the takehome message here IS not to buy for several years. I don't see how this is unrealistic - just rent like you're doing now!

I don't think buying is asking to lose money as long as you plan to be in the apartment for a few years and you can definately afford the apartment. By afford, I don't mean no money left at closing and taking on an arm. I mean putting 20-25% down and having several months expenses put aside after all closing costs. If you don't have the finances, you should not rush to buy in any market.

That being said, I would not rush to buy in this market. I think that over the next couple of years there will be more opportunities. Keep saving money and make sure that you can afford to ride out any fluctuations.

to the above poster, i hear you. thanks, you reinforced much of my thinking.

however, what i believe looks like an opportunity: harlem pre-war coop albiet comes along a flip-tax and hdfc requirements, has come along.

i love the apartment and the building, i just really need to get a grasp of the building financials, which hopefully a good lawyer can help with

I posted the comment above.

Apartment sounds great and I hope that it works out. Please just be careful. One big reason that the apt. is cheaper is because of the flip tax. In the future it will turn off a lot of buyers and depress your resale value. Who know where real estate will go but if you need to sell you want an apt. that does not have major drawbacks.

Call Ruth Weinstein at Rappaport 212-355-4175. Tell her Kim at Bernstein sent you. She was extremely efficient and walked me throught the whole process. She has been doing this for 20+ years. Also, her assistant Pat is very experience. You get a great team. They were the first one done with everything through the whole purchase.

To the poster buying - did you run the calculations in the buying calculator? Does it really make sense to buy in this market? Don't jump into this without careful thought - it could be a VERY costly decision....