brownstone prices per sq foot - where from here?

Absolutely, prices will come down. The only way it makes sense is to buy something where you REALLY want to live and where you are not paying a huge premium over rent (assuming you're renting the same thing). We just bought a brownstone exactly where we want to live. Once it's renovated, our mtge payments would be about 20% more than rent for the same kind of place (triple-mint, etc.) and we don't have to deal with landlords who want to sell or whatever.

Sure there are no guarantees in life and we're prepared to lose our downpayment if we had to sell all of a sudden. But in the meantime, we get to live in a fantastic place at not much more than rent.

Posted by: Anonymous at June 30, 2006 8:03 PM

OK advice, I guess.

I didn't do that at all and made a lot of money.

I bought in a marginal neighborhood that is now trendy and experienced signficant price appreciation in a short period of time.

For investments, I bought in even more marginal neighborhoods at a cheap price and now that the neighborhoods are gentrifying, I am seeing big price increases.

All I am saying is, I don't believe in buying in the prime areas, but if you want to, go ahead, it's a free country.

Posted by: Anonymous at June 30, 2006 8:54 PM

I'm Anon 8:03 - it all depends on your risk appetite. We're quite risk-averse and not out to make $ on our primary residence. I'd be just as happy renting except we couldn't find a similar place to rent! And we got sick and tired of co-ops (and their policy of no/restricted sublets). The trouble with RE investments is that today the rent rolls don't cover mtge and I would hate to be subsidizing some place I couldn't quickly liquidate in a cool market.

Having said that, of course I'd be a fool not to look for a "good deal" if I can - we all choose our non-negotiable points and my cardinal one is location. I just don't feel comfortable living in an up-and-coming location.

Posted by: Anonymous at June 30, 2006 9:04 PM

Yeah co-ops depress me with their stupid rules and having your neighbors see your tax returns to get in sucks as well.

Condos with their plasterboard walls and cookie cutter layouts are mostly just as bad.

So that leaves townhouses, and replacing rent with cashflow-after-tax-deductions. People always say "buy what you like and you'll be happy" but how many of those people have done this and seen their equity dribble away over the subsequent 12 months as prices re-settle down to 400 a square and kept a smile on their face? real estate values are such a part of todays new york conversation (at least, if you are over 30) it is impossible to escape the news that your hard-won equity just vanished down a rabbit hole, and you are now spot-welded into your brownstone for the next six years..

Posted by: Anonymous at June 30, 2006 10:56 PM

I'm not old enough to have experienced the last RE downturn but based on the experience in my family - my dad tried twice to buy in an up and coming area.

And got burned both times - had to watch while prices went down to 1/2 and stayed there for 10 years before recovering over the last 8 (no, not NYC). He'd have done better sticking the same money into any index fund. Now, with our primary residence, prices went down 30% from the peak but buyers were always to be found within weeks because our family house was in a "prime" neighborhood. We were forced to sell due to relocation (your nightmare situation next to divorce or layoff) but at least were able to sell it within weeks as opposed to the other properties. If we hadn't sold, high-quality renters were easy to find.

Anon: you got lucky and maybe you have terrific foresight. I (perhaps due to the trauma of watching my parents go through this - at the age of 11, I already knew what prices were and how hard rent can be to collect) just don't have the stomach for trying to speculate on what the next up and coming hood is. Where I live is where a lot of people (not everyone of course!) wants to live. If there is another big terrorist attack, we are all screwed but barring that, I'll be fine.

Posted by: Anonymous at June 30, 2006 11:13 PM

What this discussion is missing is that most people, and I include myself in this category, can't afford to buy in the neighborhood they would like to live in. And this idea of buying in a place they "really, REALLY like" is absurd. I would really like my kids to live in a neighborhood in brooklyn where they could safely walk to their local, good public school, but to own sufficient space for a family in such a place is simply out of reach for most two earner professionals who don't work in finance. Thus, because we want to make a space a home and participate in the middle class entitlement of mortgage interest tax breaks, we buy in neighborhoods within walking distance of where we would like to live and work locally to improve the neighborhood (and hope that some lottery will allow our kids to get a decent education).

Maybe this thread only applies to those wealthy enough to see real estate (secondary residence)as an investment category, but it seems important to recognize that most folks don't have a full range of choices.

Posted by: Anonymous at July 3, 2006 2:36 PM