To Buy or Not to Buy
We rent a two-bedroom in Park Slope for over $3,000/month. We have $120K sitting in the bank ready for a down payment and could easily make a payment of up to $4,500/month. We could afford to buy an apartment, but we are in no rush as we live comfortably now. When we do buy, we…
We rent a two-bedroom in Park Slope for over $3,000/month. We have $120K sitting in the bank ready for a down payment and could easily make a payment of up to $4,500/month. We could afford to buy an apartment, but we are in no rush as we live comfortably now. When we do buy, we are looking for a 2 bedroom w/ outdoor space. What are your thoughts about the market – should we hold off and sit tight until the market falls further, or should we jump in now? Is there a general sense it still has up to 30% to fall?
OH jeez, so sorry about that.
We are in Windsor Terrace and had some of the same experience as WTbound. We were in a 3000/mo apt here, with lots of cash in reserve. We missed our first opportunity which closed in 2 days (it was way under price), so on the second we jumped and placed a bid in the first half hour of the open house. The house was well-maintained and the price was low. However, we would never had known to move fast if we had not been looking for a year and were aware of what was out there. SO like everyne else has been suggesting, take you time–you’ll know when it’s right.
BTW, a house might be a better deal if you can swing it. Houses in this area can go as low as 750k, and for 800k you can possibly get a 2-family with tenant income. BUT you have to look like a hawk and jump fast.
WE are in Windsor Terrace and had some of the same experience as WTbound. We were in a 3000/mo apt here, with lots of cash in reserve. We missed our first opportunity which closed in a day (it was way under price), so on the second we jumped and placed a bid in the first half hour of the open house. The house was well-maintained and the price was low. However, we would never had known to move fast if we had not been looking for a year and were aware of what was out there. SO like everyne else has been suggesting, take you time–you’ll know when it’s right.
BTW, a house might be a better deal if you can swing it. Houses in this area can go as low as 750k, and for 800k you can possibly get a 2-family with tenant income. BUT you have to look like a hawk and jump fast.
WE are in Windsor Terrace and had some of the same experience as WTbound. We were in a 3000/mo apt here, with lots of cash in reserve. We missed our first opportunity which closed in a day (it was way under price), so on the second we jumped and placed a bid in the first half hour of the open house. The house was well-maintained and the price was low. However, we would never had known to move fast if we had not been looking for a year and were aware of what was out there. SO like everyne else has been suggesting, take you time–you’ll know when it’s right.
BTW, a house might be a better deal if you can swing it. Houses in this area can go as low as 750k, and for 800k you can possibly get a 2-family with tenant income. BUT you have to look like a hawk and jump fast.
Benson: Perhaps stocks are a bad comparison in this instance (although I do strongly believe that stocks are a vastly better investment at the moment that real estate). The point is not to get into a discussion of the stock market but to point out that some assets may experience inflation while others do not. I very much doubt that any inflation in the coming 10 years will accrue to the benefit of the housing market. Perhaps I will be wrong, but I have placed my bets accordingly.
I would also point out that historical anecdotes (my cousing sold his place for a big profit, I bought my place in 1980, etc etc) are probably not helpful guidance for anyone who is currently considering what to do in the future.
Looking is not buying and now is the perfect time to really LOOK. Look at non-prime areas that are set to appreciate in the next cycle; look for space and neighborhoods where you will be comfortable for the next 20 years. And, if you meet a decent broker along the way, let them know that you are able to purchase — but not deperate. If you are dead set for prime PS — no chance. But if you could imagine living on one of the beautiful blocks in Crown Heights, drive around neighborhoods at different times, try a local supermarket … see if you can feel comfortable. And then keep you eye out.
Getting back to a serious discussion…
Lechacal;
I’m taking aback by your statement that inflation might benefit assets like securities, but not real estate. Really?? Has there ever been such an economic environment??? I don’t think so. Inflation always accrues to the benefit of HARD assets(real estate, gold, commodities), and to the detriment of soft assets like stocks, but especially bonds.
Can you be so sure that the Fed is not inducing an inflationary period, given the money that is effectively being printed out? It takes a while for inflation to set in.
I do not claim to have sufficient knowledge to predict whether or not we are headed into a deflationary or inflationary period,and I doubt that anybody on this thread does, which goes to my advice to Miss Muffett: don’t lock yourself into a situation wherein you do not have sufficient “mental” and financial flexibility to adjust to whatever scenario may occur. In fact, this would be my advice to the OP. If you find a house now that is WITHIN YOUR MEANS, and you intend to stay for a while, go for it.
I purchased my first house in 1988,and put 20% down. Almost as soon as I closed, the market crashed by 20%, and stayed that way for 10 years. If I had sold my house during that period,I would have lost my down payment. I had no plans to move,the payment was within my means and I didn’t sweat the situation. I eventually sold the house in 2004, at a very nice profit.
Obviously you should keep saving and wait until the market drops, but it’s worthwhile looking around see what’s out there so you know when to pull the trigger.
You gotta admit it makes no sense that real estate prices are so high despite the near collapse of Wall Street and the widespread recent reductions in rents. It’s a waiting game. Sales prices have to fall.
The inflation argument Landlord makes may pan out, unless, of course, he’s completely wrong and we experience massive deflation instead; supposedly that’s what occurred during the Great Depression.
If you are up for exploring other neighborhoods, be aware that the brokers have not hit in full force in some of these other neighborhoods. We bought in Windsor Terrace last summer, off Craig’s List and significantly below market. The house was on the market for 5 hours, there was a bidding war (which we lost) but the seller liked us and felt the house should go to us. This happens still. I know of a handful of houses over here that have been sold recently on Craig’s List or by word of mouth, no broker involved and prices are good (not the inflated prices you see from Corcoran, et al). One on my street just sold by owner in less than a week for asking (but asking was way below comps). Something to think about. We bought even with the impending financial crisis b/c we knew the house was already 30% below comps, plus we loved it and it is a very long-term investment. In your shoes, I would look, look, and look some more. Be creative, look beyond the brokers on 7th Avenue, and when you find the right place and the right price (which yes, even in this market I think might exist, sometimes), buy it. If nothing seems quite right, wait until you find it. You will.