Mad Men Moving to Wall Street Digs?

What gets left out of the discussions of salaries is that there are many people relying on existing capital - not just salaries - to finance purchase of new home. So, these people might in fact have relatively modest salaries but are still looking to buy up Brooklyn real estate. However, for those seeking to trade up from apt to townhouse (even a modest one with rental income - I'm in this group), a big part of the financing that is relied upon is income from sale of the apt. What seems to be happening right now is that apartments are taking a bigger hit than houses, probably due to pure supply and demand - there are just more apartments on the market than houses. But, it seems inevitable to me that eventually, the dampening of the apartment market will affect the townhouse market, esp if salaries are not making up the gap between the apt sale and the townhouse cost. If potential buyers are getting less for their apartments, and are nervous about stagnant wages and/or possibly losing their jobs, how would they possibly stretch to trade up? The only people who are exempt from this argument are those who either are making huge & growing salaries (and there will certainly be fewer of those in the near future) and those who already have cashed out - I doubt there are many in latter category since most people prefer to wait to sell until they've identified a new place to buy. In this market, though, esp if you're going from apt to townhouse, that's a very risky proposition.

Posted by: Miss Muffett at September 24, 2008 2:25 PM

P.S. Another group who might be exempt from softening apt market (and are relying on capital to buy a bigger place) are those with family money. But again, in this climate, even the financial cushions some families have are shrinking - I certainly know many people whose families are suddenly in quite a different place if they were relying on their investments to help them through retirement, family assistance, etc. This is why I can't understand how some on this blog act as if NYC will just be immune from all that is happening - sorry, but that does not seem possible to me. It seems prices **have** to soften considerably.

Posted by: Miss Muffett at September 24, 2008 2:28 PM