Quote of the Day
So the lesson I learned today is that in my early and late 20s, I should not experience all the city has to offer (nightlife, dinner, culture ie things that cost money) in order to buy an overpriced, depreciating asset. Then, ideally, I should procreate and bring my spawn to the bars/restaurants with me so…
So the lesson I learned today is that in my early and late 20s, I should not experience all the city has to offer (nightlife, dinner, culture ie things that cost money) in order to buy an overpriced, depreciating asset. Then, ideally, I should procreate and bring my spawn to the bars/restaurants with me so I’ll be the old dude with a kid. Then what exactly is the point of living in NYC if you don’t experience it? I would have a much easier time sitting at home on Saturday nights if I lived in Smithtown, Long Island – rents are a whole heck of a lot cheaper too..
— from Not-So-Bitter Renters Embrace Brooklyn
Interest rates can’t really go up, because if they do no one will be able to afford to get a mortgage, therefore no one will be able to sell, therefore housing prices will plummet.
However, since we have already have inflationary pressure on pretty much every other sector of the economy…
I have no idea what will happen, but I think it will be rocky.
Wow, this “quote of the day” ranks as the dumbest comment ever on brownstoner, and regular readers know that is no small feat.
“So the lesson I learned today is that in my early and late 20s, I should not experience all the city has to offer (nightlife, dinner, culture ie things that cost money) in order to buy an overpriced, depreciating asset.”
This is not an “either/or” thing. Most people sacrifice when saving for the down payment and then enjoy life thereafter. They, my friend, have the best of both worlds, and to say that their asset is depreciating is downright ignorant. I’ve owned my apartment for four years and it has increased in value by 35%. If I were a flipper, I might concede your point, but those of us who are in it for the long haul know that we will come out ahead. Unless you can show me a NYC property that was worth more 30 years ago than it is today, you have no case.
I’ll never understand the people who somehow think that having the privelege of paying $20,000 a year towards their landlord’s mortage is more intelligent than sacrificing in order to own a home.
Folks, the point is inflation is going through the roof.
Rates WILL rise, it is only a question of when.
With the coming collapse of Lehman Brothers, the bankers and the lawyers who served them will soon be making much less money.
Residential real estate is almost entirely driven by income and interest rates. When income declines and rates rise, sales prices necessary get lower.
While some would like to believe Helicopter Ben is going to go Weimar on us, it just can’t happen. Hyperinflation would indeed help New York City and the bankster class, but it would destroy the rest of the country and ultimately result in a deflationary spiral that would affect everything, not just national housing prices.
In short – there is no hope for Wall Street. Now is not the time to take on the risk of a mortgage. Wait a year or two at least and wait for some signals as to how things are going to move forward. If you really want to buy real estate – get some farmland. That was the best performing real estate asset over the past year.
Hey What, so there was no spread back in 1987-2001?
By historical standards, mortgage rates are still low.
When I was looking to buy a house in 1999-2000, I was looking at 30 year rates of close to 8% vs. the 6.4% rate you’re talking about today.
That’s not “The What”. It’s the fake “what”.
“The What is not correct about 30 year T-Bond rates which are 4.8% not 6.4%. Contrast that with rates of 8%-9% back in 1987-2001 when the NYC real estate market was the weakest I’ve seen.”
Come on down! You are the next contestant on the “Asshat is right”
There is a thing called a “Spread”, Ok good… The Spread between 10 year Bond and the 30, 15 Mortgage rate has gone up.. Why you ask, Asshat? Because there is more RISK involved!
Lookie here, Stupid–> http://www.bloomberg.com/markets/rates/index.html
The 10 year is at 4.27% and the 30 Mortgage is at 6.30% That’s 203 Basis points higher. This Spread is going to blow out pretty soon, around this Fall. I think after the Olympics the Chinese are going to start dumping their Debt on the Market (1.7 Trillion). This going to get good……
The What
Someday this war is gonna end…
“On the certain side is that your rent will increase over time and if you’re not rent controlled/stabilized, it is certain that it will go up significantly. I rented for 18 years and found that my rent was on pace to double every 10 years”.
Not 100% true. I lived in a non stabilized building in Carroll Gardens for 13 years. My initial rent was $1000, and I had only two increases and the rent was only $1200.
Jesus, that is about the worst written sentence I’ve ever read (all posts by the what excluded, of course). That gets quote of the day?
“Its called embracing middle class values and sacrifice. Something America once stood for.”
Yes, America once stood for the protestant work ethic that proposed that hard work was a good in and of itself regardless of the return. Thank the nonexistent god that we figured out what crap that idea was. If someone in their 20s wants to spend the money they work hard to earn, let them enjoy it. If you enjoy congratulating yourself on your “sacrifice” go ahead with your self-flagellation.