Open House Picks: Six Months Later
Comment: Tough times at the higher end. Open House Picks 12/12/09 [Brownstoner] Previous Six Months Later Posts [Brownstoner]
Comment: Tough times at the higher end.
Open House Picks 12/12/09 [Brownstoner]
Previous Six Months Later Posts [Brownstoner]
Homey, I’m glad you love your home: more power to you. I’ve never denigrated anyone for buying at any time – it’s a personal choice. Folks like Wasder may have a tinge of wishing they’d paid a bit less, but in the grand scheme of things, there is no point in having regrets for what’s done, especially if you are (as you seem to be) in a house you love, can afford, and plan to be in for a long time.
But my situation, and that of many others that I know, is different. My husband and I chose rewarding, but not terribly well-paid professions. We work very hard, but don’t make much money for a city like NYC. Plus, we have small kids. So for us, the choice of a home, and the price point, is inextricably bound up with pretty much every other choice in our lives – most importantly, how much time we have for our kids (smaller mortgage = less income pressure). Am I miserable now in my rental? Far from it. It’s a lovely place, in a great hood, and we feel lucky frankly to be where we are. We also feel lucky to have NOT bought before the crash (we were considering it), but now that things are so clearly on the downside — or as I said, stagnating at best (for sellers) — it just seems foolish for us to plunk down tons of money since sellers IMHO are still often holding out for unreasonable asking prices. I might feel differently if I’d found the house of my dreams (and I assure you, they are not grand), but that has not happened. When it does, and if the price is something we’re truly comfortable with, we may indeed bite.
What I find strange is how a candid discussion of prices leads me to be reviled by people like yourself. Precisely because the cost of housing can often impact SO many other aspects of your life, I think it’s an important discussion to have. And that – the way cost does impact the rest of your life – is precisely why I am as obsessed as I am with real estate. It’s easily going to be the biggest investment my husband and I ever make (already was in our previous purchases and sales, and now we’re seeking the home to buy for the rest of our lives – the big kahuna, if you will). Not to mention the way in which real estate is so wrapped up in notions of home, family, identity, community etc. I share the view with some others on this blog that long-term, ownership beats renting, but that again is due to our particular circumstances – namely wanting to leave some financial security to our children (I might feel differently about renting if we didn’t have kids, but maybe not). That said, I think there are times — like now — when renting makes sense on a temporary basis.
I welcome other points of view – for this reason, I’m genuinely curious to hear predictions by the more bullish on this list as to their predictions for the next 12 months, 2 years, and 5 years, and the reasons behind their predictions.
I don’t understand the reactions people are having to Miss Muffet’s posts, which are among the most level-headed and least provocative out there. Even if you disagree with her opinions, she always strikes a perfectly reasonable and conciliatory tone.
Homey – do you really think your comment that “life is short, it will all be just fine” meaningfully adds to the discussion more than MM’s thoughtful, well-reasoned analysis of the market? If you disagree with her, feel free to say so and explain why, but if you would like to be “spared her insights”, stop reading. MM is an asset to these forums and I, for one, would like to encourage her to continue to share her insights.
MM, pardon my frankness, but you strike me as a bit self-righteous. (not because our budget is lower….)Wait as long as you like my dear, but do remember life is short. You could be hit by a crosstown bus tomorrow. I think people like you really miss the point. You are so focused on beating the market ( you have not true idea of where it is going – or where interests rates are going, I might add), that you forget the pleasure of living where you want to live just to enjoy your life. Did I overpay for my absolutely stunning, fabulous house in a great neighbor (a former SRO)? Perhaps, but we love it and living here is great. I think when we are ready to sell, it will all be just fine. There are good deals in this market. If you feel superior because you are waiting, comfy in your apartment, so be it. But spare the rest of us your insights now and then, please!
mm- thanks btw!
mm – certainly not saying that you would be cheerleading the market after buying a place – just commenting on the way a change in position has effected the way I WANT to read market reports etc etc
and yeah, I think 2004 levels is certainly a reasonable prediction as some of the harder hit places that I know of (i.e. condos in areas like clinton hill/bed stuy border, south/east williamsburg, harlem, especially harlem) seem to be in 2004/2005 territory already. I bought my place a noticeable amount under what an apartment in the same line in the same building went for in 2006 – so I think my price was ok, for now. although I am by no means ruling out further declines. in other words, my strategy and outlook fairly well paralleled your own. I chose to buy because I found a great apartment in a neighborhood I really enjoy, the price had already come down a bit – and for boring, complicated reasons it was time for me to buy.
Perhaps – congrats on your purchase. We are actively looking too, and contrary to what some people think, we are not really trying to time the market per se. If we got a good price on a place we loved, within a budget we’re comfortable with – we probably would buy, even knowing that the bottom is not yet here. The change in our mentality is that we are a lot more patient now, and the budget range we are comfortable is lower – not because we have less cash/income, but exactly because of the unpredictability you point out.
It’s certainly possible we will buy a place and see prices decline further (and no, I won’t then suddenly start cheerleading the market since, like wasder, I will know that I’ve bought a place to keep for life). But it’s also possible that we will stay in our nice/economical rental for a long time and just wait to buy again. Either way, we are certain that time is on our side. I agree that no one knows for sure what’s going to happen, in terms of how low prices will go, but I have yet to hear even the most bullish of bulls predict prices rising again anytime soon. If the most optimistic scenario (for bulls) is stagnation for a (long) while, and the worst is much bigger declines, I will stay on the sidelines until a compelling property at a truly attractive price presents itself (oh, and I’m not a fussy prima donna seeking a mansion on a prime block – modest house, modest block is fine as long as the hood/school works for us). And I’m not looking to buy a house for nothing – I’m placing my bets on prices returning to at least 2004 levels, and possibly lower (2002?) so that’s still a hefty price tag in historical terms.
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interesting to see this conversation re:vested interests and predictions. until about a month ago, i was in mm’s position, and then decided to jump in. many of my reasons for doing so were personal and not about timing the market – but I got a place that is well within what I could afford, bought mostly for cash, in a bluechip neighborhood (central park slope), that I can hold for an indefinite period of time with no worries.
even so, it’s amazing how much a change of situation changes your perspective. I do find myself wanting to cheerlead the market now, much more than before. watching this psychological change in myself and seeing how chaotic and unpredictable the economy is right now just makes me very cautious of any kind of prediction. the one thing that seems crucial to avoid is any attempt to buy a place that is at or near the limit of what you can afford – because with all this unpredicability that seems a recipe for disaster no matter how good the price might seem.
(a sidenote: as a condo-buyer not a brownstone buyer, I observed the opposite trend in the condo market from what some people have mentioned about brownstones – condos in more fringe areas seem to have largely stopped selling, whereas places in more established neighborhoods have fared much better. thoughts on this?)
thanks What for the article. good weekend everyone.