The One That Got Away
Harvey Araton, a sports writer for the Times, penned an epic tale for the paper’s real estate section this weekend about making peace with his decision to sell low in Brooklyn Heights nearly 17 years ago. According to Araton, he wrote the article as a form of therapy, since he’s often kicked himself for selling…
Harvey Araton, a sports writer for the Times, penned an epic tale for the paper’s real estate section this weekend about making peace with his decision to sell low in Brooklyn Heights nearly 17 years ago. According to Araton, he wrote the article as a form of therapy, since he’s often kicked himself for selling his family’s co-op in the busted early ’90s market: “It has been 16 1/2 years since we sold a two-bedroom apartment in Brooklyn Heights, en route to the suburbs and the birth of a second child. Actually, I should say that we gave it away: We lost about $80,000 on a $240,000 purchase made in 1988.” The current value of the co-op is around $900,000. Araton gets in touch with other people who sold in the building—which Brooklyn Heights blog identifies as 157 Hicks Street—at around the same time. “After reconnecting with our old neighbors, the other thought I am left with—and hope to hang onto—is that as much money as we lost, judging a period of life by the bottom line is the road to existential ruin…I suppose, then, that the closure I have been looking for might be in the realization that the apartment was never just an investment. It was a place to live,” he writes.
A Brooklyn Apartment Sold Too Soon? [NY Times]
Photo from Property Shark.
Benson:
Bravo for calling out the NYT, and the FHA story is absolutely of more value than another navel-gazer on an Upper West Sider with boo-hoo-itis. Increasingly, the NYT seems to live unashamedly and cluelessly in their own little bubble…
fsrq, you can’t make those numerical assumptions for 15 years ago, they’d be A LOT LESS.
Furthermore, if he got a 15 year mortggae, he’s own this place free and clear by now. Think about that prospect!!!!!!
newsouthsloper -it costs ALOT to keep RE for 16.5 years, so far from 900K would be ‘profit’, what is the maintainance at a coop like that 12k a year average (probably more), what is the taxes on a coop like that, another 6k a year? that’s 18K a year – even after tax benefits that approx 160K over 16 years), think there were any assessments over 16 years?, think there were any repairs over 16 years? (try selling an apartment that hast been updated in 16 yrs and see if you get 900k in BH today) If he had a mortgage then he paid INTEREST for that leverage (you could also leverage the S&P investment if you want to compare apples and oranges).
So again HE MISSED NOTHING – the same investment in S&P and he would have done as well (or better)
further the writer doesnt say ANYTHING about the appreciation in his suburban home.
The article is retarded and perpetuates the same ignorant nonsense about RE buying/investing that caused millions to lose a fortune investing on myths and bad math.
I just realized that I quoted the wrong statement in my post above. I meant to quote Lechacal’s statement, as such:
“It’s a myth that the buy-sell-rent decision is not a major financial decision that has more impact on a family’s finances than probably any other since decision.”
“This article just perpetuates the myth that caused all the trouble to begin with — that home ownership is a ptimarily financial investment and not a decision about how and where you want to live.”
Lech;
True enough, but that is not what the artcile is about, at all. Would that the NYT RE section actually have such a meaningful story, perhaps even a tutorial on the basics of the rent/buy decision, it might be useful for something other than wrapping fish.
This is a story about a guy who sold an apartment for a lifestyle decision (bigger place in the burbs for his children, and all that), and incredibly, laments the “run-up” in the price of the old apartment. AS FSRG points out, however, if he would do some basic math he would see that the run-up is not that spectacular. A completely stupid article by a self-absorbed person, who happens to have access to the NYT.
Actually fsrq, 160K amortized at 8% for 17 years is only around $590K. Far less than the $900K it is worth now.
Also, he probably used a lot of the proceeds to pay of the mortgage, so he probably didnt walk away with $160k cash in hand.
…or rather that one should not conclude that the entire barrel of herring is red, or that just because it was red in 1993 it’s still red in 2010. I’m sure you get the point.
I fell asleep half way through the article. 2 pages…REALLY?
fsrg – It’s actually pretty hard to make that argument because you need to take into account the cost of renting. But my point stands that the entire barrel of herring is not red.