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November 16, 2008
Williamsburg Edge v. Toren (Downtown brooklyn)
Ok so I know that lots of people will say this choice depends on the individual and their preferences, but to be honest, all else being equal, we love both buildings and so are thinking about this in terms of which is the better investment. We would be living in this apartment for about 5 years and would then look to sell, so potential resale value in that timeframe is a huge consideration for us.
Each building has pros and cons and much of this decision will come down to location. The Williamsburg area is already "past its prime" with regards to investing, from what people say, though the waterfront area seems to just be getting a facelift now due to rezoning (I believe). On the other hand, the downtown brooklyn area, though not so amazing right now will likely improve dramatically in the next five years or so.
Asides from location, the Edge has fantastic amenities (though the Toren also has good amenities, they are not as nice). However, transportation is better in the downtown brooklyn area as it is a major subway hub.
Any thoughts/advice/further questions? Thanks in advance for the help!
Comments
Any thoughts/advice/further questions? Thanks in advance for the help!
If you "invest" in anything right now. You will have a live chainsaw shoved up your ass, sideways. Hope this helps...
The What
Someday this war is gonna end...
Posted by: Return of The What at November 16, 2008 1:16 AM
You should be able to rent in both in a few months.
Real estate does not bottom like equities. It isn't like there will be one day where everyone screams "BOTTOM" and there is a 20% rip in real estate prices. If you are actually considering buying, because to be honest you sound like a broker, do so in a year or more when the lay of the land is more clear. Forced sellers and buyers, along with a few who are indifferent to price, are the only ones moving in this market. Anyone who tells you otherwise is a fool, crook, or both.
Posted by: actually works in finance at November 16, 2008 8:41 AM
Sebb?
Posted by: lechacal at November 16, 2008 9:34 AM
Thanks for the comment, but I actually thought this might be a good time to buy considering the market is depressed and prices seem to be at a low point. Why do you think its necessary to wait a year? Thanks again.
Posted by: jik118 at November 16, 2008 10:32 AM
Thanks for the comment, but I actually thought this might be a good time to buy considering the market is depressed and prices seem to be at a low point. Why do you think its necessary to wait a year? Thanks again.
Posted by: jik118 at November 16, 2008 10:35 AM
jik118, if you make your financial decisions based on anon blog posters, you're in for a tough time. THe fact is that no one can predict the future. If you need a home, buy one. If you're buying as an investment over five years, maybe you'll make out, maybe you won't.
Now, I'll forget to take my own advice and suggest that Downtown Brooklyn may or may not 'improve' in the next five years, if by 'improve' you mean substantial development. Even if AY happens, it ain't gonna be done in five years. And not much else is gonna happen either. But see para 1 re anon blog posters!
Posted by: denton at November 16, 2008 11:11 AM
I wouldn't be thinking about real estate in terms of investment right now.
Too many unknowns, too much potential for future disappointment.
I would think about this decision only in terms of where I want to live, transportation, etc.
Posted by: vanburenproud at November 16, 2008 11:35 AM
I'd go with Toren.
The Edge is in an already gentrified neighborhood (I know...hard to beleive considering how hideous most parts of Williamsburg still are) but Downtown Brooklyn still has tons of potential for growth, I think.
Plus the addition of 20,000 new condos in Williamsburg over the next couple years is going to really depress prices there for a long time to come. Think Miami...
Posted by: 11217 at November 16, 2008 11:37 AM
The air is going to get sucked out of the entire NY market in the next 12 months. Prices have just started falling and are not even close to bottoming. Even properties with a compelling long-term story (such as Toren) are a major risk in the next couple of years. If you are really doing this for investment, then wait. If you just want a place to live, then decide where you want to live and buy there, and accept that you are probably making a terrible "investment."
This will be a long slide to the bottom. There will be a lot of people like yourself who think that a few percentage point drop means it's time to buy. In a few years almost all of these people will be wishing they had more patience.
Posted by: lechacal at November 16, 2008 11:50 AM
The air is going to get sucked out of the entire NY market in the next 12 months. Prices have just started falling and are not even close to bottoming. Even properties with a compelling long-term story (such as Toren) are a major risk in the next couple of years. If you are really doing this for investment, then wait. If you just want a place to live, then decide where you want to live and buy there, and accept that you are probably making a terrible "investment."
This will be a long slide to the bottom. There will be a lot of people like yourself who think that a few percentage point drop means it's time to buy. In a few years almost all of these people will be wishing they had more patience.
Posted by: lechacal at November 16, 2008 11:50 AM
you should wait because missing the absolute bottom in real estate is not nearly as painful as catching a falling knife. This is the greatest financial crisis since the great depression, and the effects will not be known for years. In 1929, after the crash, things shambled along for a few months and then fell out of bed in 1930.
Our market, real estate and otherwise, just caught a left hand jab square on the nose. We're in the dizzy handful of seconds after the punch is landed and before resisters as painful. That, and there may be an uppercut in the offing. Wait it out, what you might lose in being too late pales in comparison with what you might lose in being way too early.
Posted by: actually works in finance at November 16, 2008 12:09 PM
I wouldn't wait if your goal is to find a home that you can legitimately afford and imagine yourself living in for many years. There are tangible benefits to owning that are not about the market: your tax situation might drastically improve, for example. Or you could lock yourself into a neighborhood instead of getting gentrified out as renters do.
You stand an excellent chance of facing the same negative equity problem most people posting on this board are probably facing right now, myself included. But this only matters if you find yourself forced to sell.
Your home's value is very conceptual until you want or need to cash in. If you seriously don't imagine cashing in and are motivated to buy for non-market reasons, then there is nothing wrong with buying.
Just don't think that you are going to be making an investment and don't stretch one dime past your budget.
Posted by: vanburenproud at November 16, 2008 3:51 PM
I think your comments have been quite helpful. I would like to just say that the reason we would be buying in this market is not necessarily for investment purposes but because we are getting married and are thus looking for a place to live once we do. Realistically speaking its hard to imagine we would be living in brooklyn for much longer than 5-7 years (at least as we see things now, though things can obviously change). Thus, since we know we want to live in brooklyn for that timeframe, we were just thinking about future resale value of whatever property we buy. So perhaps the word "investment" was a bit misleading. This would not be an investment property in the traditional sense, but of course we are looking to maximize profit (if this is possible) by choosing an area/building that may be in a good position when the time comes for us to sell. So again i guess this begs the question, williamsburg or downtown brooklyn?
Thanks
Posted by: jik118 at November 16, 2008 8:35 PM
What do you have against renting? Just wondering... I mean I always buy because I want to renovate and I love old houses which I saw as harder to rent. Why wouldn't you want to rent an apartment after you are married... just for a year?
Posted by: Aussie at November 16, 2008 10:47 PM
Didn't it take 10-12 years for prices to recover from the late 80s crash? Seems to me that you may very well be cruising for bruising if you are going to need to sell in 5 years. But what do I know? I live two blocks too far myself!
Posted by: Putnamdenizen at November 16, 2008 10:47 PM
there is value in any market but I cant believe that condos are a value right now at the list prices.
If you really want to buy, go and ask what they can do for you. they read the same papers as the rest of us. otherwise, i'd look towards renting. it still counts as your first home after marriage even if its a rental.....
Posted by: slick at November 17, 2008 2:48 AM
"So again i guess this begs the question, williamsburg or downtown brooklyn?"
Downtown Brooklyn. From what I've read there is a condo glut in Williamsburg. Downtown Brooklyn may also be overbuilt, but has better transportation, etc., and is not as developed. Also, imagine yourself 4 or 5 years down the line, married -- does the scene in Williamsburg seem as appealing?
It looks like you are set on buying, but renting and stashing cash ain't so bad either, especially if you are not in Brooklyn for the long haul. I defer to the economics people on this board, but everything tells me that cash will look good for the next year at least while people deleverage and asset values deflate a bit. If you do buy, extract some major concessions! There are price protection clauses floating around now, but I don't know how effective they are.
Posted by: theandrewlee at November 17, 2008 8:49 AM
You are thinking of buying apartments in unfinished buildings where there are 1000s of new units still inc cintruciton or sitting unsold to live in for 5 years? You are crazy. Condo prices haven't even started to fall yet. And you will be living like a renter among renters wherever, dependent on what the developer chooses to fund (forget amenitites). And when you want to sell, you will be competing against foreclosures and the developers.
Posted by: BH76 at November 17, 2008 10:04 AM
to reiterate what everyone is saying - you should find an apt you love and a location you love. You have that luxury right now. do NOT think about future returns and do not buy in a location that isn't good now but you are hoping will improve in the next five years because nothing is going to be happening in the next five years except probably a decline in quality of life. I personally think Wburg is much more fun than downtown bklyn which is really very dreary. On the other hand, if MTA cuts service, which it will, it will be a nightmare to have to rely on just one line.
Posted by: gkw at November 17, 2008 1:23 PM
In this market I would definitely rent if I was planning on moving in less than ten years.
Posted by: vanburenproud at November 18, 2008 1:01 PM
To answer your question I believe Williamsburg is a preferable place to live than downtown Brooklyn. Great restaurants, stores, parks. Williamsburg is full of new families, it really isn't hipster central anymore. All hipsters moved out to Bushwick. It is very baby-friendly in case you and your partner are planning on breeding.
Why not invest in a two-family and have some rental income? Certainly they are not making anymore 2 family properties.
Posted by: bqe1970 at November 19, 2008 5:47 PM
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