Buy or wait?

Don't overlook Bay Ridge. The prices are very reasonable and the neighorbood is great. Lots of folks moving here from Park Slope, Carroll Gardens, Prospect Heights.

Posted by: guest at September 11, 2007 4:07 PM

Additionally, dont over look Bushwick, Cypress Hills, Ridgewood, lots of gorgeous Brownstones and tree lined blocks and reasonably priced,

Posted by: guest at September 11, 2007 4:15 PM

Don't try to time the market - you'll never pull the trigger. When prices are going down, you'll wait for an even better deal, and when prices are going up you'll wait until they go down again.

If you are buying a house that you will live in and will make you happy - and not to flip for a quick gain - then you will most likely do well in the long run. Yes, houses are expensive and you don't want to overpay, but when you find a place that works for you logistically and financially, jump on it. It's about your overall happiness in life, not whether it was the best deal ever.

I have a friend who was always trying to time the market. He came within $10k of buying a beautiful house in Ft. Greene a few years back. But.... he didn't, and now he's paying 6K PER MONTH for a place that's big enough for a family of four in Manhattan. Don't be that person......

Posted by: guest at September 11, 2007 4:17 PM

My place is just about to go on the market in BS. E-mail me at M_FIRENZE@YAHOO.COM if you are interested and we can both reap the benefits of a brokerless transaction.

Posted by: guest at September 11, 2007 5:10 PM

They are now saying that in the worst case scenario, NYC prices would drop 11% over the next year.

There will be few to no bargains.

Even with the correction.

Agreed about not trying to time things. If you have the money now and want to own, I'd say move forward...

Posted by: guest at September 11, 2007 5:53 PM

Prices don't drop in New York.

Posted by: guest at September 11, 2007 8:04 PM

I agree with WUBMN. If you are looking in the areas you say you are you should have more of a selection based on the sub prime mtg problems. That's if you can wait it out.

But if you see something you just have to have I say buy it. Otherwise, you should pass.

Posted by: guest at September 11, 2007 11:54 PM

What about in Fort Greene?

Posted by: guest at September 12, 2007 12:04 AM

bed stuy is hardly going down in price, at least in the areas that you'd want to own in. are you kidding? we just had our house reappraised, and after 4 months of owning it, it was appraised at 150, 000 more than when we purchased it. as someone said earlier, prices don't go down in ny. if you've saved the $$, buy now.

Posted by: guest at September 12, 2007 12:11 PM

Well, anyone who was an adult from 1987-93 knows that real estate prices do go down in New York. I know people who lost money then, but they were people who bought recently and who suddenly had reason to need to move (divorce, another kid or two, job moved, etc.). (Oh, and in the 80's everyone said you could't lose money owning property in NY.) Those people who didn't need to move did all right in the end (although, contrary to mythology, it's rare anybody gets rich owning a house). So if you're pretty sure you'll be owning for 5-10 years, I'd say buy when you get something you really like. And don't jump for something that you've got questions about.

David

Posted by: guest at September 12, 2007 12:31 PM

10:08, your link to article is not working. Would you be kind enough to summarize the salient points and/or paste in some excerpts?

Posted by: guest at September 12, 2007 3:35 PM

The comments that David made about the market in NYC going down 1987-1993 are true. My neighbors and I own pretty much the exact same wood framed houses near Greenwood Cemetary. In 1987 one neighbor paid $148,000. In 1995 another neighbor paid $127,000. In 1999 I paid $172,000.

In 1995 I looked at the house on my block that sold for $127,000 and decided not to purchase. I regretted not "pulling the trigger" and waited 4 years for another house on the block to go on the market. The house I purchased needed alot of work, but we loved the block and I wasn't going to miss another opportunity to purchase a house.

When I purchased I was paying close to 35% of my income on a 30 year mortgage with PMI. With refinancing and raises I now pay 18% of my income on a 20 year loan with no PMI.

I guess my point to giving you these numbers is that things might seem tight now, but if your income is increasing you might not feel so squeezed in the future.

Stu

Posted by: guest at September 13, 2007 5:07 PM

Actually, prices did not start coming down (or perhaps more correctly, did not reach their low) until some 18 or so months after the Oct. 87 stock market crash. Which puts the start date of the long low price slump in 1989 sometime.

And prices did not reach their 1987-88 height again until 1997 (in Park Slope anyway). I'm talking about coops (there were hardly any condos to speak of then), which is what I was looking for then, houses being out of my range.

In 1996, multiple people were trying to sell Park Slope coops (nice ones, 2 bedrooms, sometimes 3) for which they paid $150-160 K for $120-130 K. That's a big percentage hit they took, and selling wasn't a fast process for them. It was my understanding that prime brownstone house prices were not hit anywhere near like coops were, but that they dropped maybe a tad, and then just sat there (not to imply that history ever repeats itself exactly - things could happen differently the next time, in either direction.)

By 1997, when prices caught up to where they were in 1987-88, they barely paused and just kept going up - and up, up since. By 1998, those 2brm P.S. coops were twice what they were in 1996. (That's when I bought - in 1998 - though I'd begun looking in 1996 - it seemed scary as a first-time buyer to buy something from someone losing that much money on the sale - who knew then what was going to happen from 1997-2007? I knew they were a good bargain, compared to Manhattan prices, but who ever thought then that Brooklyn would catch up in desirability, and thus price? I preferred living in Brooklyn in the 80's and 90's for the cleaner air, more sunlight, more trees to cool the air in summer, and closer proximity to lower Manhattan than the U.E.Side and U.W.Side, but most people I knew then didn't (and nor did the market.) So if you think it will be easier for you to buy when and if prices start to fall, think again - it won't be - you'll just wonder if they will fall more after you buy, or when they will ever start to go up again.

Those who had to sell coops from 1989-1996 lost out - if they could have hung on until 1997, they could have doubled their money, even if they bought at the 1987-1988 height.

Which is why they say you should buy in any market (rising, stagnant, or starting to go down) if you like the place for your home, and that if you plan to stay in it for 10 years, you'll do OK.

That, of course, (1) implies that nothing unforeseeable happens to make you need or want to move sooner, and (2) that a slump won't last for more than 10 years. Anything can happen - the market (and life) is full of risk.

If you wanted to avoid risk, you'd just keep renting always, and moving to further-flung neighborhoods as your rent got to be more than you wanted to pay. Or, if you liked non-brownstone apartments, you'd get a rent stabilized place and stay there for 30 years (or until NYC does away with rent stabilization, which, with the way things are going, is likely to be sooner.) Renting is not a terrible strategy in this time...you can rent a nice place, with no risk, cheaper than you can own it with 20% down, which was not true in P.S. when I bought - once you took the mortgage interest tax deduction into account, owning a similar apartment was cheaper than renting then, even with 10% down. It was pretty much a no brainer on the monthly cost issue then.

But by renting you'd also lose the upside of appreciation that **may** occur in the particular years you own a place if you bought. But given the economics, you have to just **really** want to own a brownstone to buy one now, (which many of us do), as you can't justify it as cheaper than renting, and you have absolutely no way of knowing if you'll make more than you put into it through appreciation.

So, if you want to own a brownstone, and are willing to take the bet on appreciation, unless you are entirely risk averse, buy yourself a house. (I would if I could afford to right now, and I’m fairly risk averse. But then, I really want to own a brownstone.) I agree with the poster who said mortgage rates are still low, and that matters a lot - as I remember when the prime rate was over 15%. Demand for nice houses in brownstone Brooklyn is not likely to dry up any time soon, barring any unforeseeable catastrophic event.

The world is an uncertain place - sometimes we have to act in it regardless. Decide if you want to own enough to risk buying, and if so, buy. But don't do so just because you feel that you have to do the American dream thing and own, as ours is an unusual market for the country here in NYC, as here renting can be a better economic choice, with lots less risk (and less work - owning, while nice, eats into leisure time.) There's a reason more New Yorkers rent than elsewhere - and it isn't just because they can't all afford to buy - as unlike most other places, due to high housing prices in desirable areas here, it can often be much cheaper to rent in those areas than to own.

Also, decide if you'd rather rent a nice place to live (apt. or house), for cheaper than you can own a house, and invest your money elsewhere (remembering that stock, while more liquid, goes through similar slumps as the housing market where you have to wait it out sometimes to not lose out when you sell), or perhaps invest in a vacation house somewhere to satisfy the urge to own. Once you own a brownstone, you probably won't be able to do the vacation house thing for quite awhile, unless your income rises dramatically, as these brownstones cost a lot to maintain. (Everytime something needed replacing in my brownstone coop, it seemed it cost us $5,000.) And if you've never thought about a vacation place, well, I didn't either until after I bought a place - then I wanted a place to get away from it to!

To be a really smart investment, though, you'd have to buy somewhere, like further out than you are looking, or in another borough, where your monthly costs to own are cheaper than renting where you are now, and wait for the neighborhood to appreciate. I think if I were in a position to buy a house right now, much as I love Park Slope and nearby brownstone environs, I'd have to look in those further places and other boroughs now to see if I liked them, like I liked Park Slope in the 80's, and if so, I'd have to at least **consider** buying a cheaper house further out, and waiting for the market to agree with me on how nice the area is. Though I could wait a few decades, I know.

Posted by: guest at September 13, 2007 10:32 PM