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August 11, 2007
Market Predictions
As a potential homeowner who can afford up to a 400K apt, and who's willing to put down between 30% and 50%, would it be prudent to buy within the next year or within the next 3-4 years given the ridiculously overheated Brooklyn real estate market? aka how many people think the current mortgage crisis (and everything it brings) will weed out those who bought beyond their means.
Looking to buy in bkyln (cobble hill, brooklyn heights, park slope, carroll gardens parts of beorum hill)
Comments
Good luck buying any apartment in Cobble Hill or Brooklyn Heights for under 400.
Not sure what your comment about "weeding" out those who "bought above their means" even means??
Posted by: guest at August 12, 2007 1:44 PM
there is no reason to put down 30%-50% that's wasted money sitting in equity purgatory. you're not getting tax benefits on that, it's not liquid for if you have an emergency or other opportunity, and you could at least be investing it in low risk funds.
please get some professional advice before thinking you need to put that much down for a loan. i'm interested to know why you would want to do that?
Posted by: guest at August 13, 2007 9:19 AM
How can you tell a person not to put down 30-50% without knowing their income? Some folks are cash rich (relatively) and income poor. It may be unconventional to sink a lot of assets into one investment but an apartment is first and foremost a home and, to live in that home, you have to be able to pay the mortgage and maintenance each month. Sometimes a large downpayment is the only way to make the equation work. Tax deductions on mortgage interest can't compensate for lack of cash flow.
In terms of when to buy, the RE market takes time to catch up to the realities of the economy as a whole. It's largely because sellers don't want to be the first to blink and refuse to lower their prices until it's obvious that prices are indeed coming down. So start looking now but watch price trends like a hawk. You have to balance the lower price you're hoping for with rising interest rates. You may have to wait 6-12 months for things to settle out. After the 1987 stockmarket crash, RE prices held steady for almost 18 months before finally falling in 1989 and staying depressed until about 1996.
Posted by: NeoGrec at August 13, 2007 1:04 PM
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