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Isn't money the only issue? That's like saying, if money was no issue, would you rather have a Ferrari or a Honda.
well, house prices are way down, if you can afford it, it would be a smart investment in the long run...
So what do you do? -I work for an investment banking firm. Oh okay; you are like my brother, he works for Edward Jones. -No, a college degree is required in my profession
cue Chicago troll's rants about the Manhattan housing market
http://www.drmarkklein.blogspot.com/
"well, house prices are way down, if you can afford it, it would be a smart investment in the long run..."
not in manhattan they arent
Meant inquisitively, not sarcastically.
While NYC is a bubble one would think that the price of condos would have to come down as those individuals who generally drive up condo prices (bankers/buyside guys) will be receiving reduced bonuses in the near term. With that said, it all comes back to supply and demand so with both remaining constant prices will likely remain stable and increase with the rate of inflation.
If money werent an option why would you really care +/- 10% appraisal value
I was discussing this with a guy at work today, the specific question was "why is the NYC market not follow national trends at all?" His view was basically that there are so many buyers at any price point, that so many people trade up/around and that there are so many sources of money that national trends have very little influence. If you're buying a condo in Manhattan, you most likely aren't too concerned with a few beeps either way on your mortgage. Finance may be doing poorly (again not all finance, but in general) you still have all the foreigners clamoring to instantly snap up with the cheap dollar. I don't fully buy his argument but overall think the dynamics are so completely different, the system defies other market drivers. Think of it this way- the typical home buyer in middle America is usually portrayed as a young couple, about to have their first kid. How many condo buyers share their buying priorities?
Well.. if money isn't an issue, then yes, buy a Condo in Manhattan.
especially at the high end. that's why mid end (800k-2m) has come down a little but 5m+ is still as hot as ever.
weak dollar, lots of foreign investment propping up demand as well
The Manhattan market is just lagging national trends. Yes, the average price has not come down but that is due to sales at a few very high end buildings. And yes, foreign buyers are still helping due to the weak $.
What is happening now is apartments are sitting on the market longer because the sellers won't reduce prices. Eventually, those that have to sell will have to lower prices. This is one of the first signs of a declining market. You'll notice it first in neighborhoods where there was a lot of building over the last cycle (e.g. UES). New condos buildings that are coming onto the market will be converted into rentals. It is very difficult to imagine a scenario where prices don't decline due to the following:
not even a question if prices will fall, just how much and over how long a period. As ex-banker points out, sales have plummeted for condos in Manhattan this year (we have a huge housing crisis in this country that just taught us how this pattern works out...sales plunge first, prices next over a period of time) and prices will follow next as buyers begin to cave. Will foreign buyers, deeper pockets, etc mitigate some of these losses...maybe. Don't forget how big a runup we saw in apartment prices in Manhattan over the last decade. Wouldn't be shocked to see the 1.5-3mm apartments down 20-30% peak-trough, the marginal buyer is in the process of getting whacked in NYC (myself included) and lenders will be extremely restrictive and not give much credit for year-end bonus payments in any sector
I wish someone would create an ETF to short manhattan condo prices. Manhattan definetely lags the rest of they country in condo prices, and this morning's drop in the case shiller doesn't help.
There is a lag time between when someone gets laid off, and when they put their house on sale. Most people wait, in hopes that they can find another job in the meantime. Wait 6-12 months and you will see a nice drop in condo prices. In addition to the lack of demand, there is a lot of supply coming. UES was mentioned by ex-banker, the Brompton and the Lucidia are two new luxury condo buildings within a block from each other on 86th street. Exiting rental buildings are struggling and are offering free months rent and many other perks to lure in new tenants.
Right now, there is some new cash, espeically some foreign cash looking for some relative value. This seems eerily similar to the SWFs and other investors seeing value in Bear, Citi and WaMu after their initial drop. Sit back and wait for prices to fall more.
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