Buying an Apartment in NYC

First time buyer here currently looking at studio condo apartments in NYC in the

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Ozymandia

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5y

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That market isn't moving much. The ultra high end luxury market is way oversupplied and is absolutely a buyer's market, and that is exerting downward pressure on other luxury units (think TriBeCa instead of 57th St), but when I was last looking at this (3-4 months ago) it hadn't managed to penetrate below the $1-3mm range. Those apartments actually saw an uptick in velocity.

For that price you're probably restricted to being way east in the 50's and 60's and FiDi. My advice is to wait. You're buying a studio, so this isn't a long term buy (I assume). You're going to want to move into a bigger space eventually, whether that's better financial circumstances or needing more space for a family. I doubt you're paying much less than 4,000/mo once you factor in common charges, taxes, and your mortgage. Why not go live in some sick one bedroom, basically anywhere you want, for that? With the way the luxury rental market is giving out concessions, you can probably live in a better, bigger unit in a better location, in a newer building, for less money. No, you're not building home equity or anything... but that isn't much of a sunk cost. Take 300/mo that you would have paid and invest it somewhere else, it'll do better for you.

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5y

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Well it’s just leveraged. If it’s a bad housing market or bought poorly that leverage works against you.

Well, it's not "just leveraged", it's leveraged without the MtM margining or forced liquidation. That means that you are not exposed to the same path dependency due to variance as you would in the financial markets. Assuming that it's an asset with long-term positive expectation (equities, housing etc), it's a pretty smart trade (e.g. Warren Buffet and his puts followed a similar line of reasoning).