<p>NYC is very different. Its market is more diverse. A condo in NYC is not the same as a condo in a suburb, they are completely different markets. In the last few years, NYC’s market has held up relatively well because of foreign investors. Smaller units (1 bedrooms and studios) have not done as well. In NYC, there is no option to buy a house, only condos and coops. There are a lot of people who want to be in NYC, so one could always rent out unsold apartment to cover expenses.</p>
<p>That’s is good info Oldfort. Thanks.</p>
<p>By the way, 1 million for a one bedroom, and the prices haven’t held up?</p>
<p>How expensive were these 1 bedrooms at the top of the market?</p>
<p>dstark, my friends apartment was a studio - didn’t even have a separate bedroom - and it was 750k. again, he just sold it for a profit over it’s original purcahse price 7 or 8 years ago which I believe was about 700k. his building fees each month were more then the cost of my mortgage+taxes+insurance each month for my four bedroom home in suburbia.</p>
<p>NYC is crazy.</p>
<p>fendergirl…yeah…that is pretty crazy.</p>
<p>there are people that lived in his building that took their balcony and converted it into a small (and I mean small) bedroom for kids. I’m not sure what that does to resale value.</p>
<p>It was nice to have a doorman though!</p>
<p>“It was nice to have a doorman though!”</p>
<p>Lol</p>
<p>I have a hard time getting UPS to leave my packages on my back porch instead of on my front door step where anyone can see them… at least there paying those ridiculous building fees gets you someone to bring in your packages. I started paying the neighbor kid 5 dollars to bring in packages if I knew they would be coming while I was at work!</p>
<p>Well, would you rather pay 100,000 or 5 bucks a pop?</p>
<p>I like porches.</p>
<p>
Slight correction - that’s really only Manhattan, where there probably are only a handful of detached houses, and not too many townhouses that have not been broken up into apartments, however there are plenty of townhouses and even single family houses in the other boroughs. You can find single family houses within walking distance of subway stations in the Bronx. I don’t know the other boroughs as well, but I’m pretty sure Queens and Staten Island have more options than the Bronx.</p>
<p>I didn’t know we were talking about any where but Manhattan proper. 
Not that many foreign investors would look outside of Manhattan, so those boroughs’ market would be pretty similar to NYC suburbs.</p>
<p>“NYC is crazy”…$700k for a studio. </p>
<p>My goodness, unless you’re a Wall St whiz or incredibly successful business owner, attorney or doctor, who the heck can afford to live in something with bedrooms? </p>
<p>We need to bookmark this thread to show all the heavy-debt NYU-Tisch-bound kids who think they’ll easily pay their big debts off while living in NYC waiting for their big break.</p>
<p>There are studios in Manhattan for much less than that. Look at corcoran’s website.</p>
<p>Condo financing has gotten much tougher over the past 2-3 years. Condos used to be easier to finance than co-ops, but FNMA has tightened their requirements lately for condos.</p>
<p>Manhattan prices have been holding their own compared to some nearby suburbs.</p>
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<p>I drive into Boston on Thursday or Friday evenings. Last week it took
me 90 minutes. The week before, 120 minutes. Without traffic, it’s 50
minutes. I’ve tried all sorts of routes so I get to see various
aspects of Boston but what I’ve seen is that there are a ton of people
in the city and surrounding suburbs and a lot of those people are
young and apparently working. We looked for a place for our son about
six months ago and I was shocked at how bad a lot of expensive
apartments are. I’m sure that it’s much worse in New York - but yes,
it’s simple ecomomics.</p>
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<p>If you want an inflation hedge, does it make sense to do it with your
primary residence or would someone be better off with a separate
instrument that provides a simpler calculation as being an inflation
hedge?</p>
<p>
</p>
<p>Maybe. That is one of the benefits of condo ownership. Most co-op boards are VERY strict about sub-lets. My building only allows one–no matter how long you’ve lived in the building. It can’t be less than 9 mos. or more than two years. Moreover, it’s only guaranteed for one year. It’s then renewable if the tenant hasn’t caused any problems…or the rules haven’t changed.</p>
<p>Plus, under NYC law, you can’t rent an apt out for less than one month. If you do, you’re a hotel.</p>
<p>That is why condo prices are generally 20% more than coop.</p>
<p>Regarding the pricing for a nyc apt. of 2-3 million, depending on what type of building you want, the price varies. A “name” building on Central Park West, will be 2+ for 2 br. I think for 3mm someone could find a classic 7 with 3 br and ba, although maybe not in a “name” building. As a “hobby” my H absolutely loves looking at all types of real estate. We were in Manhattan in the spring looking on the west side. Maintenance can vary with building finances, so it is important to check these out carefully. Do they need a new chiller for AC? (is there even central ac available?)</p>
<p>I love the old prewar buildings, but it costs $$$ for a really nice apt. in one of the really nice ones, and they do not all have central a/c (which may be important for some). Some of the newer buildings have all types of amenities like a pool or health club (and certainly A/c, which may be preferable.</p>
<p>Even though a condo has less control over your investment than a coop, I would never underestimate the control that either of these boards may have on your investment. We have had both a condo and a coop years back, and the condo board was for a time by far the worst in a certain way. A group of owners actually had to stage a proxy fight to get rid of them. They had farmed out the building insurance and a few other big contracts to their own companies! We were able to get rid of them and their nasty contracts and lower the maintenance. In the coop, it was run by people who used a professional management company, and who tried to save everyone’s maintenance money. </p>
<p>Good luck to those looking. My best advice is to find a good, knowledgeable agent who really knows the market.</p>
<p>Anothermom2, I like you husband’s hobby.</p>
<p>That condo association sucked.</p>
<p>To address the question about hyper-inflation - which is a very remote possibility - no asset does well. Actual hyper-inflation is so rare, it’s tough to talk about it. Weimar Germany and Zimbabwe aren’t useful examples. Argentina would be the best, but they were on a specific currency peg - meaning set to a value as if Argentina was on the US dollar - and ending that peg brought about an end to their crisis. We are the dollar so not the same thing.</p>
<p>Most people mean something like what happened with 16% or so interest rates, topping at around 20%, under Volcker. That was designed to squeeze out the cost-push inflation created by oil price rises, embargo and then uncertainty. Real estate did well but the market conditions were very different than today. We have a large supply of housing, offices and retail today compared to then. By nearly any measure, America has a lot of stores per person, office space per person, etc. I would also argue that times are different nominally as well, meaning that inflation then was on a lower base. Incomes and every other measure of material well-being - like the number of TV’s and cars - were lower, at least in nominal terms. I mean you got paid less and had less, though with inflation the actual or real value of your pay may not have increased much since. I think it’s easier to inflate nominal values when they’re lower to begin with. My reason is that many values extend over time: pension contracts, annuities, investments and a host of other expectations. I’m not saying inflation wouldn’t or couldn’t happen with higher nominal start points but that we can’t expect the world to react the same as though inflation were a solely mechanical application.</p>
<p>I can’t see why the Fed would raise rates like the Volcker days. They can pull huge amounts of money out of the system other ways - because of how they’ve financed so much of their work to push down rates. But the good news for real estate might be that if the Eurozone falls apart or comes close, real estate here might do very well for a short time.</p>
<p>From what I have read about hyper-inflation, asset prices don’t keep up, so I agree with you. It’s more relative, which asset will do better?</p>
<p>We aren’t close to hyper-inflation right now. The odds are miniscule that we will ever have hyper-inflation in this country in our lifetimes.</p>
<p>“I think it’s easier to inflate nominal values when they’re lower to begin with. My reason is that many values extend over time: pension contracts, annuities, investments and a host of other expectations”</p>
<p>This is interesting. I am going to think about this.</p>
<p>Right now, we have too much capacity to make goods and we seem to we be well suppiled with most goods. Even energy is not a problem. The US has an abundance of natural gas and coal.</p>
<p>Inflation would have to be caused by the FED. Excessive money supply growth and an increase in the velocity of spending that money can lead to inflation. This country has the money supply growth cooking, but not the velocity. The debt overhang may keep the velocity down for many more years.</p>
<p>I do not have the faith in the Fed to turn off the money spigots at the right time, when velocity starts increasing.</p>
<p>I guess using the term hyper-inflation in my housing question is hyperbole. Maybe, high single digit or double digit inflation would be more accurate.</p>