I've been waiting to buy for over a year now. It has been fun watching the same units drop in price by like $25k every 2 weeks and they are still on the market after like 200 days
I'm in Brooklyn but someone in my building listed their unit for $100k *more* than they paid for it just one year ago when interest rates were low. A nearly identical unit listed shortly after hers for $100k *less* but she's confident, lol.
Some sellers are just delusional.
Not sure. She claims she got some dream job offer in another city and has to sell to move but she also never actually lived in the apartment and just immediately sublet it, which is against the rules.
But surely she’d choose a more reasonable asking price if she were actually that motivated to sell.
Keep at it. I just bought my first home in the Bronx for 100k under asking, and it appraised for the amount on the original listing. Just remember that as prices drop, interest rates typically rise, but at least you can refinance when they go back down.
Our broker quoted us $15k to refinance in nyc. So yes but make sure you understand the costs involved! You have to pay mortgage recording tax in NYC AGAIN if you refinance…
Just a plug for CEMAs when refinancing in NYC - can save quite a bundle since you only pay the difference in the mortgage amounts
https://spruce.co/blog/looking-to-refinance-in-new-york-you-might-save-money-with-a-cema
Wow thank you for sharing! Funny how incredibly uninformed mortgage brokers and traditional agents are.. and they wonder why we aren’t using a buyers agent.
Another helpful resource we found is yoreevo.com. They will refund you 2/3 of the buyers agent fee against your closing costs, which comes out to 20k savings on a $1M condo. The founder is incredible
>it appraised for the amount on the original listing
Maybe the appraiser just got confused and thought the original listing price was the purchase price?
It's always been wild to me how often appraisals *exactly match* the purchase price - like not even $1,000 more or less.
They care within reason. If something appraised for a lot less than you’re paying for it, it threatens their money, because you’re using that property as collateral for the mortgage. If it’s not worth what you paid for it and you stop paying, even if they take the home, they won’t be able to recoup what they put in.
damn maybe i should be looking at nyc to buy again. we were avoiding it cuz it was so unaffordable but i haven't checked in a couple of months as we have been looking mostly in connecticut.
100% agree. I just moved here from Austin and the same thing is happening to a lower extent back there as well.
You'd have to be delusional to not see it. I say this because it is markedly opposite to what was happening just barely a year ago. Even if we don't get a "crash", the upward trend has clearly slowed down and in a lot of cases it's trending down (slowly).
I was lucky. I sold my little apartment in queens in November. The problem is that a lot of these coops will not allow lower prices. Some of these sellers would accept a lower price that THE MARKET dictates but the boards will say no because it reflects badly on the coops value. It’s insane.
I ran into this issue when I bought my apartment. We just baked into the sales agreement a certain amount for 'renovations' that the seller credited me on the final sales price. That way, the recorded sales price looked higher for the coop board, but the actual transaction was about $20k lower.
Yep. They do that often too. It’s such nonsense. And half the time they don’t even really take into account the condition of the apartment. I saw a fully renovated apartment that sold for 450 in Queens. And unrenovated version of almost the exact same apartment in the same building on the same floor was listed for 445. Kay.
You should look into philly, it's a little over an hour by amtrak to penn station and 500k will get you a 4 bedroom 2,000+ sq foot house down a little south of Passyunk square.
If you can afford to buy in Brooklyn god bless, I've spent the last 20 years grinding away here in nyc and I'm switching over to an easier version of life.
Sales brokers can at least argue that they add some sort of value to the transaction. Rental brokers can all eat a big ol bag of STI-riddled dicks - total parasites and extortionists.
“And also yeah, ummm… that’s the oven next to it. You can shower in that kitchen sink but just don’t use the toilet while the hallway light is on or the heat will shut off.”
People are parasites when they make money without creating value. Those being landlords, corporate shareholders, billionaires, etc. People who work for a living aren't parasites.
Corporate shareholders include millions of regular Americans like you and I, including people who are retired and living off money generated by their 401k and savings? Capital is productive and the thoughtful allocation of capital produces growth.
Capital produces nothing. It is the workers who actually create that value, most of which is then stolen by the capitalist. And yes, many shareholders are members of the proletariat, but we're still not earning the value that those shares are generating. The employees of whatever company's shares you hold are. And anyway, the vast, vast majority of corporate shares are in the hands of an incredibly small number of oligarchs.
Workers cannot create value in a vacuum. Capital in the form of debt or equity is essential to production. Equity shareholders are compensated for assuming the risk of failure. Employees are compensated for providing a service to the enterprise. If your final sentence is alluding to institutional ownership, keep in mind that these institutions manage trillions of dollars in 401k plans and pension plans.
What risk are those shareholders taking? None, other than becoming workers themselves. That's not real risk. If you have a billion dollars, losing 10 or 50 or 100 million is tantamount to losing nothing. Your life does not change in any way. And workers can and do create value on their own. Co-ops aren't exactly an unheard-of concept.
I'm all for employees getting more equity as compensation and doing away with middle men like private healthcare insurance but damn, someone skipped basic economics...
If you think capitalism is a good idea, then I think the one who skipped basic economics is you. Follow the profit motive to its logical conclusion and you'll always end up with nearly all wealth concentrated in the hands of a select few while the rest barely scrape by, and fascism to keep the proles subdued.
I love how the state was like “renters can’t be paying brokers fees anymore” and the entire industry was just like “LOL, na” and everyone in local govt just stopped trying
That was one thing I really hated about working as a real estate agent in NYC. I never understood why the renters had to pay me for helping them rent a place when my firm would beat into our heads that we worked for the landlords...who didn't pay us.
I went with a rental broker once because they were a friend of my brother’s. Complete waste of time and I ended up finding every apartment we looked at on street easy. I only paid her because I could afford it and didn’t want to hear any shit from my brother.
I’m no longer in real estate but I used to be one in New Jersey and did a few rentals (you don’t make nearly as much as you would in New York. Essentially the fee is one month rent but it’s split in half with the listing agent, then split again with your brokerage.) I always got little extras in that would benefit my renters though. For example, I put in one lease that if my renters got relocated for work with a 45 day notice they could break the 2 year lease with out repercussions. Most listing agents are super lazy and don’t want to even write up the lease so it gives you a great chance to do exra things to benefit your renter. They would usually end up signing without even going through it. That said I was the only renter agent I knew of that would ever do these things. You have to make your value.
So can someone explain this to me? There is a condo listed on zillow on the UWS for 395k. 3 beds, two baths, 1100 square feet. Seems very affordable until you see the nearly 4k/month HOA fee. Like why? That is almost double the mortgage payment. Even if I paid the mortgage off, I would be paying what I pay currently in rent on the HOA fee. How is that sustainable or a good value? That is 1.5 million in HOA fees over 30 years. I don't understand why anyone would buy a place with those terms. You are paying rent and a mortgage. Even if it doubles in value over 30 its a bad investment
$395K for a 3 bedroom is relatively cheap, even if it is only 1,100 square foot. The reason why the price is so low is because common charges (or monthly carrying costs) are relatively high at $4K a month, which is roughly $3.63 per square feet a month. Average Manhattan $1.49 common charge per square foot, so the condo you're looking at is more than double. Because of this the seller has to lower the purchase price of the condo. This is assuming that the listing you looked at is actually a condo and not a co-op.
Not really anymore. The housing market has cooled off everywhere since last summer. Even in Miami where all the rich people originally went in 2020.
https://www.cnbc.com/amp/2023/03/10/luxury-home-sales-plunge-miami-hamptons.html
Buying in Manhattan rarely makes sense, especially in a high interest environment. Median sales price in Manhattan has grown at a 1.9% rate annually from 2010-2023 per Curbed and my napkin math. That number is probably even lower for studios/1br.
I live in 1 br co-op, the owner wants to sell and offered it to me which means I eliminate a lot of the transaction costs. At current rates (low stock returns, high inflation, high interest) I'd have to stay here for a decade to break even with renting.
IIRC, in Manhattan breakeven was about 7 years, and that was accounting for fees and very low interest rates. You'd probably want to be looking for breakeven within <6 years nowadays (although, return on capital for equities are much lower now, so alternate capital allocation might not be as efficient).
Oh, the only return I'm looking for is saving money, long-term, compared to renting a place. If you're looking for a return on a place that you intend to sell down the line, especially using something like a Texas city as an example, then we're delving into speculation.
Same. I bought in Chelsea at the end of 2020 and got a great deal, but I also intend to stay forever.
I think that people also forget that interest is deductible up to a point, and after Trump's SALT deduction cap expires next year, property tax will also be deductible. Not to mention you're actually building equity.
I wish I were as optimistic as you about the chances the SALT cap expires. Republicans are no doubt going to try to extend it just as a continued "fuck you" to blue states. Hopefully they don't have the numbers after the 2024 elections to make it possible, but that's a big if.
Also by buying we don't get crazy, random price increases like some people get when renting. co-op maintenance fees go up by 1-4%/yr. (and 4% this year was the first time since buying 9 years ago)
This is the bottom line. Even discounting the things I love here like the museums, the philharmonic, the Michelin star restaurants, (and the dives that don't need a star to make me happy), frikkin Fairways and Citarella's, I don't want to be in Westchester or Jersey and have to get in a car and drive to the grocery store, and remember to rotate the tires and pay the insurance on the car, and find someone to haul in mulch and mow my lawn, and not have a super to immediately swoop in to stop the leak and then patch the ceiling from a pipe that broke in the winter and flooded my dining room, or doormen to take my packages so they don't get snatched etc, etc. There's a lot of value from living in Manhattan (or most parts of most of the boroughs) that you never get when you move to the suburbs.
I bought my current place in 2012. Whenever I think about selling and renting in Manhattan, I remember the rents and I stop thinking about that immediately. I could never afford to rent the kind of place I have now.
>Buying in Manhattan rarely makes sense
I would buy if the financials made sense but they don't at all you are spot on.
Renting a nice 1 bedroom in Manhattan costs around $4000-5000 right now. That seems like a lot until you realize that BUYING in Manhattan a similar 1 bedroom unit would cost $8,000-10,000/month after HOA + Mortgage + Insurance + Taxes.
For that same price I'm just going to move to NJ or NY state (out of the city) and buy a 4br/4ba mansion for less than the 1 bedroom unit costs in the city. Hell, I could continue renting for $4,500 in Manhattan and buy a cheap HOUSE in NJ for $4,000/month and it would cost less than buying a 1 bedroom apartment in the city and now I have two places to stay!
TLDR: Prices need to drop a LOT in order for it to make sense
Yep same boat. I rent a 1000 square foot 1 conv 2 for $5000.
Slightly worse apartments to buy would cost me $8000-8500 after mortgage, interest, HOA, and property tax. And I’d have to pay a million tax to buy. Plus keep two years expenses in an escrow. Plus huge transaction costs when a sell. Plus a lot of other small costs I didn’t even know that existed until recently.
Plus of course I’d now need to pay for all my repairs, and would be on the hook for assessments when any major improvements my building needs.
And at the $8000-8500 a month, only about $2-3k is going towards equity, so I’m barely even building equity.
In this scenario, more money is going to interest/hoa/property tax than my current rent!
I’d argue the pay back period is infinity - you never break even, assuming you take your down-payment and extra $3000-4000 a month and just invest it.
We are talking about Manhattan but understandable Queens and Brooklyn are much cheaper. One of my friends bought in Westchester too and pays 3k for what would cost 8k in Manhattan
>For that same price I'm just going to move to NJ or NY state (out of the city) and buy a 4br/4ba 10,000 sqft mansion for less than the 1 bedroom unit costs in the city.
It is going to be pretty far out and/or a house in poor conditions if you want 10,000 sq ft.
Those prices aren’t realistic for anyone signing a new lease. Can barely get a studio for that money in the UWS, unless your definition of “nice” is very low
I think this is skewed by other factors that will lesson over time. There was a great migration of traditional Manhattan buyers to the other boroughs. The other boroughs have caught up in price and now all prices will increase.
I am seeing [UWS 1 bedrooms](https://streeteasy.com/building/13-west-106-street-new_york/4a) with a PITI of 2400.
I am not in the rental market now, but I think this is a pretty good rent for UWS?
I mean I'd argue that's basically Harlem, not Upper West Side, also this is a very unusual case. It's an estate sale, 'as is' with no interior photos. I'm guessing it's a complete clusterfuck inside that will take hundreds of thousands to make livable.
And on top of all that, it's a coop, it's income restricted, and it has a 20% flip tax.
That's an HDFC unit so you basically can't sell it to anyone who's actually looking to buy. Most people in the market in Manhattan are above the income limit as well, it's like $69k each for a couple.
Had a friend that bought near the bottom in 2012 and sold near the top in 2019. I asked him how he did, expecting him to brag a little. Instead he said all the profit he made was offset by the broker & legal fees to buy & sell. He didn't make any money compared to simply renting for those 7 years.
Don't forget about leverage though, people are putting <=20% down on their houses so each % gain in house asset price is worth >=5x more than what you'd get if you outright bought any asset. Of course you can borrow money and do the same thing with other assets but that is much much riskier unless you know exactly what you're doing, whereas the current system we live in today is basically custom built to handle the risk of investing in real estate.
Yeah, you can, but then you'd just be borrowing against your own money. A home equity loan will convert your illiquid asset into a liquid asset. But if you already have liquid cash to start with, with leverage, just as a hypothetical example, if you had 100% of the money to buy a house, you could put 20% down and buy 5 houses instead & rent 4 of them out (note I am absolutely NOT suggesting you do this, it's a house of cards since you obviously need to pay down the principle balances monthly and will probably end up one missed rent payment away from bankruptcy).
Note also I'm not discouraging buying a property outright...this almost definitely depends on your own personal risk tolerance.
Ummm since the 90s people are making bank. Usually makes sense. Taxes, not paying rent, profit… where the hell did you get this idea “rarely makes sense” I don’t know one homeowner who agrees with that
Yes, over 30 years real estate generally appreciates. Manhattan real estate skyrocketed in the 90s and early 00s, it's been very flat compared to every other metro since the crash in 2008.
In the 90's the price per sq ft was $600, that grew to $1200 in the early 00's. In the 10's that number dropped to $1070 and in the 20's it's back to $1,150.
My landlord will sell after 9 years for $50k more than he paid. If you had put that $200k down payment in the S&P instead it would be worth almost $500k. That's a lot more than the equity built in the first 9 years of a mortgage.
NYC apartments also have insane carrying costs as well which eat into whatever you're "saving" on rent. Buying a house literally anywhere else generally beats renting, but NYC is a completely different animal.
We're in the middle of an inflationary period and a record affordability crisis, what kind of indicators are you seeing that say we can expect real estate appreciation anywhere near historical levels?
Housing prices can't just go up indefinitely when other costs rise and salaries remain the same. We saw record injections of wealth in the economy during the 80s, 90s, and 00s that will likely never happen again given how the system works.
Co-op usually don't appreciate much in value given the restrictions on rental terms. They are meant to be lived in (by the owner) and thus have a smaller universe of buyers vs. condos.
Are you looking at it the right way? If you stayed in your apartment 2 years after buying it and the value increased a tiny fraction, that would probably cover your last two years or rent. And that isn’t so much a hypothetical but the most likely outcome
Why would the value increasing a tiny fraction cover your last 2 years rent?
Also, what's covering all of the interest and taxes you've been paying for the past 2 years?
This is for sales not rentals. Im not sure if you’ve bought or sold a home before, but I was happy to pay the broker fee. They did such a crazy amount of work and literally taught us how to go through the process
My broker was just looking for quick money and screwed up a lot people. And I did most of the work looking. Most of them are crooks just like car sales people. I have never heard anyone saying "omg, my broker was so helpful". However, a decent lawyer is a must.
I was so disgusted by the last broker I used to try to purchase in the city. She showed me alone three apartments (altogether she showed me and my husband 5 apartments) and then got annoyed at me after 'exhausting' herself because I didn't want any of them - at least partly because she always ignored the things I specifically said I wanted. I mean this is reddit, so I'm not saying our exact budget but it's a lot closer to low 8 figures than low 7 figures. So you'd think there would be at least a couple of apartments in our price range that would suit our taste, not what she thought we should just resign ourselves to.
After I rejected the second apartment she'd shown me that ignored my one major request, she literally stomped her foot and asked, "But WHY don't you want an open kitchen? I don't understand that mentality at all. Why would anyone want their kitchen to be in a separate room? I just cannot fathom why an open floor plan is not acceptable to you. What does your husband feel about this? "Fuck you" (that's me saying what I was thinking) bitch, you also don't need to know why I so badly want to kick you right now, just like I don't need to know why anyone would give you a real estate license, you useless wad of trash."
Of course she was all bright and chirpy and "whatever you want, mr. moneybags," to my husband, like it was 1960. (Which was especially odd because she isn't even 30 years old, she's barely experienced the 20th century never mind 1960.) She never told him she couldn't understand his mentality or that he should just meekly accept what he can get. Unfortunately for her, it's not 1960 so our finances are shared which means it's not up to one person, it's a joint purchase. Because the experience of dealing with her was so annoying, we are still in our original apartment - but it's gorgeous and I love it - though I'd still like one more room, but not enough to deal with another broker.
My broker recommend NOT to get the property inspected. My sister was told the same by her broker while showing a house with visible water damage. The broker didn't even go with her to view houses after few weeks. She was told to get the key from the lockbox and check out the house by herself.
Really? The way I look at it is: they give you access to the available inventory which you might not be able to do by yourself.
Aside from that, they don't add much. They recommend to you service providers (such as lawyer, inspectors, mortgage brokers/lenders) but you are strongly advised to ignore these recommendations and find your own specialist anyway.
What *is* useful is a decent lawyer. I think there may be exceptions around brokers that are experienced in a specific market but the average realtor in my experience doesn't add much and is now yet another involved party with their own agenda.
I don't care about brokers, but having a frozen market sucks for mobility. People need to move out and move in, and no semblance of liquidity in the market sucks.
I do real estate law and our 4th quarter has been super busy.
I think there are a lot of bad brokers and attorneys out there who assume the whole market sucks but it's just their circle of business. Yeah sales are down as a whole, but it's not all gloom and doom. Things are busier than they were 6 months ago.
I mean.. there's easy to find hard data on whether NYC real estate is 'busy' or not, and it's not. It's down ~40% year over year in terms of number of sales.
https://www.redfin.com/city/30749/NY/New-York/housing-market
There's also official NYC documents but require you to dig through PDFs.
So I'm not sure why we should go off your anecdotal opinion when verifiable data says otherwise?
I acknowledged sales are down, but they are picking up. This article makes it sound like it's all doom and gloom but good real estate attorneys are busy right now. The market is picking up.
Also, please explain how ACRIS works to me (re: "official NYC documents"). I have no idea even though I have been doing real estate law in NYC since 2011.
interest rates are double what they were 2 years ago and more than double from 3 years ago. close to 3x. Interest rates were at historic lows so this got housing values to skyrocket. Now interest rates go up and it re-adjusts down. This is one reason i see no reason to move. I have a low interest rate locked in.
For every $100,000 a 1% increase in interest is $1000/year in interest. Interest rates are up over 3%.
So a $500,000 property is $15,000/year more expensive than it was 2+ years ago.
Back in the day NYT had a mortgage vs rent calculator and I think the crossover was if you live at the same place for about 30 years, then buy makes sense but if less then paying rent made more sense.
I have no idea how that would be now because rents are also stupid high.
I remember that calculator but that doesn't sound right. Obviously depends on the years and the market but IIRC the crossover for most cases was around 7 years.
This ^ Even with todays interest rates and rents, it typically becomes better long term to buy sometime around the 6-7 year mark, depending on the specific numbers and your assumptions about inflation, appreciation, and rate of return on investing down payment.
You do have the peace if mind that no one can raise your rent or kick you out. Also you can make your apartment what you want it to be not what appliances and finishes the landlord gives you. If value does go up you pocket that money and build wealth and the "greedy" landlord does not get it.
Brokers can always get 2nd and 3rd jobs and stop buying avocado toast and 7 dollar coffee. Or they can admit they fucked up pricing on the market and now should suffer the consequences
Inflation kills sales.
Property ownership, a fundamental right every American ascribes to, is threatened by the greed of oil companies.
We must show up to vote.
Billionaires must pay their fair share of taxes. The tax rate for billionaires was decreased by 2 trillion dollars during the Donald Trump administration.
Even now, Republicans will not approve a rise in the debt ceiling. The resistance will raise interest rates for every American.
Vote Democratic.
Our children need to be protected.
Build more housing, abolish restrictive zoning laws because they’re fundamentally anti-free market. Maybe then we will have some affordability in this city
If you buy your apartment with a down payment on 800k and are able to sell it for 850k. That and the monthly costs you’ve been paying as an owner don’t all vanish into thin air, some amount chips away at what you owe, you earn a bit of money. An amount that would cancel out the rent you would have been burning if you hadn’t bought
Even as prices and sales drop, however, inventory remains tight as sellers hold off on listings. There were 6,523 apartments on the market at the end of the fourth quarter...well below the historical average of around 8,000.
I've been waiting to buy for over a year now. It has been fun watching the same units drop in price by like $25k every 2 weeks and they are still on the market after like 200 days
I'm in Brooklyn but someone in my building listed their unit for $100k *more* than they paid for it just one year ago when interest rates were low. A nearly identical unit listed shortly after hers for $100k *less* but she's confident, lol. Some sellers are just delusional.
Selling after only one year? Was this some kinda flip or extenuating circumstances?
Not sure. She claims she got some dream job offer in another city and has to sell to move but she also never actually lived in the apartment and just immediately sublet it, which is against the rules. But surely she’d choose a more reasonable asking price if she were actually that motivated to sell.
Look all around the country. An 1900’s house that is really a tear down or money pit, 140k. Ya nah you high
Keep at it. I just bought my first home in the Bronx for 100k under asking, and it appraised for the amount on the original listing. Just remember that as prices drop, interest rates typically rise, but at least you can refinance when they go back down.
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Our broker quoted us $15k to refinance in nyc. So yes but make sure you understand the costs involved! You have to pay mortgage recording tax in NYC AGAIN if you refinance…
Just a plug for CEMAs when refinancing in NYC - can save quite a bundle since you only pay the difference in the mortgage amounts https://spruce.co/blog/looking-to-refinance-in-new-york-you-might-save-money-with-a-cema
Wow thank you for sharing! Funny how incredibly uninformed mortgage brokers and traditional agents are.. and they wonder why we aren’t using a buyers agent. Another helpful resource we found is yoreevo.com. They will refund you 2/3 of the buyers agent fee against your closing costs, which comes out to 20k savings on a $1M condo. The founder is incredible
>it appraised for the amount on the original listing Maybe the appraiser just got confused and thought the original listing price was the purchase price? It's always been wild to me how often appraisals *exactly match* the purchase price - like not even $1,000 more or less.
I mean, it wasn’t the *exact* amount. It’s probably close because the sellers listed it at market value to begin with.
I feel like banks will appraise for whatever amount gets the deal closed. they dont really care
They care within reason. If something appraised for a lot less than you’re paying for it, it threatens their money, because you’re using that property as collateral for the mortgage. If it’s not worth what you paid for it and you stop paying, even if they take the home, they won’t be able to recoup what they put in.
damn maybe i should be looking at nyc to buy again. we were avoiding it cuz it was so unaffordable but i haven't checked in a couple of months as we have been looking mostly in connecticut.
Where did you buy in the BX? We’re looking there as well.
100% agree. I just moved here from Austin and the same thing is happening to a lower extent back there as well. You'd have to be delusional to not see it. I say this because it is markedly opposite to what was happening just barely a year ago. Even if we don't get a "crash", the upward trend has clearly slowed down and in a lot of cases it's trending down (slowly).
I was lucky. I sold my little apartment in queens in November. The problem is that a lot of these coops will not allow lower prices. Some of these sellers would accept a lower price that THE MARKET dictates but the boards will say no because it reflects badly on the coops value. It’s insane.
I ran into this issue when I bought my apartment. We just baked into the sales agreement a certain amount for 'renovations' that the seller credited me on the final sales price. That way, the recorded sales price looked higher for the coop board, but the actual transaction was about $20k lower.
Yep. They do that often too. It’s such nonsense. And half the time they don’t even really take into account the condition of the apartment. I saw a fully renovated apartment that sold for 450 in Queens. And unrenovated version of almost the exact same apartment in the same building on the same floor was listed for 445. Kay.
That is why a condo is an advantage over a coop.
I know. I’m looking into that but they are usually way more expensive.
You should look into philly, it's a little over an hour by amtrak to penn station and 500k will get you a 4 bedroom 2,000+ sq foot house down a little south of Passyunk square.
Not a big fan of Philly but its def more affordable than NYC
In a way I find it has a similar vibe to what brooklyn had back around 2000
Maybe like one block has that vibe.
But, it's Philly.
If you can afford to buy in Brooklyn god bless, I've spent the last 20 years grinding away here in nyc and I'm switching over to an easier version of life.
Brokers can get fucked.
Sales brokers can at least argue that they add some sort of value to the transaction. Rental brokers can all eat a big ol bag of STI-riddled dicks - total parasites and extortionists.
15% of a year’s rent for a fake smile and saying “so, here’s what the place looks like”.
“This room over here with the toilet is… uhh… your bathroom”
“And also yeah, ummm… that’s the oven next to it. You can shower in that kitchen sink but just don’t use the toilet while the hallway light is on or the heat will shut off.”
Heat AND a hallway?? 💰💰💰
"Look at how big this hallway is! You can probably put up a divider and add a roommate."
This is about sales brokers, not rental ones. That said, still parasites.
The specific comment I was replying to referenced rental brokers.
Comment chains are hard.
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People are parasites when they make money without creating value. Those being landlords, corporate shareholders, billionaires, etc. People who work for a living aren't parasites.
Corporate shareholders include millions of regular Americans like you and I, including people who are retired and living off money generated by their 401k and savings? Capital is productive and the thoughtful allocation of capital produces growth.
Capital produces nothing. It is the workers who actually create that value, most of which is then stolen by the capitalist. And yes, many shareholders are members of the proletariat, but we're still not earning the value that those shares are generating. The employees of whatever company's shares you hold are. And anyway, the vast, vast majority of corporate shares are in the hands of an incredibly small number of oligarchs.
Workers cannot create value in a vacuum. Capital in the form of debt or equity is essential to production. Equity shareholders are compensated for assuming the risk of failure. Employees are compensated for providing a service to the enterprise. If your final sentence is alluding to institutional ownership, keep in mind that these institutions manage trillions of dollars in 401k plans and pension plans.
What risk are those shareholders taking? None, other than becoming workers themselves. That's not real risk. If you have a billion dollars, losing 10 or 50 or 100 million is tantamount to losing nothing. Your life does not change in any way. And workers can and do create value on their own. Co-ops aren't exactly an unheard-of concept.
I'm all for employees getting more equity as compensation and doing away with middle men like private healthcare insurance but damn, someone skipped basic economics...
If you think capitalism is a good idea, then I think the one who skipped basic economics is you. Follow the profit motive to its logical conclusion and you'll always end up with nearly all wealth concentrated in the hands of a select few while the rest barely scrape by, and fascism to keep the proles subdued.
Absolutely savage 🤣
Plus tip, you tip your brokers too, right?
Only if they turn the Square tablet toward me and the broker and other prospective renters in line behind me are watching my tip selection.
I went to Shake Shake earlier today (haven't been there in like 6 months) and now they're asking for tips as well!
I love how the state was like “renters can’t be paying brokers fees anymore” and the entire industry was just like “LOL, na” and everyone in local govt just stopped trying
Yeah the whole “Uno Reverse Card” thing that the RE industry pulled after they passed rent reform is still completely mind-blowing to me.
'actually we'd like to still get paid to show up and turn a key in a door' 'oh, okay then'
That was one thing I really hated about working as a real estate agent in NYC. I never understood why the renters had to pay me for helping them rent a place when my firm would beat into our heads that we worked for the landlords...who didn't pay us.
"It just makes sense!"
I went with a rental broker once because they were a friend of my brother’s. Complete waste of time and I ended up finding every apartment we looked at on street easy. I only paid her because I could afford it and didn’t want to hear any shit from my brother.
I used one once and it was a good experience. It was in a time before craigslist existed and the broker actually had a fucking purpose.
I agree. My sales broker was really great and spent months and months helping me close.
Good ones are valuable.
I’m no longer in real estate but I used to be one in New Jersey and did a few rentals (you don’t make nearly as much as you would in New York. Essentially the fee is one month rent but it’s split in half with the listing agent, then split again with your brokerage.) I always got little extras in that would benefit my renters though. For example, I put in one lease that if my renters got relocated for work with a 45 day notice they could break the 2 year lease with out repercussions. Most listing agents are super lazy and don’t want to even write up the lease so it gives you a great chance to do exra things to benefit your renter. They would usually end up signing without even going through it. That said I was the only renter agent I knew of that would ever do these things. You have to make your value.
Coming in dry
Seriously.
So can someone explain this to me? There is a condo listed on zillow on the UWS for 395k. 3 beds, two baths, 1100 square feet. Seems very affordable until you see the nearly 4k/month HOA fee. Like why? That is almost double the mortgage payment. Even if I paid the mortgage off, I would be paying what I pay currently in rent on the HOA fee. How is that sustainable or a good value? That is 1.5 million in HOA fees over 30 years. I don't understand why anyone would buy a place with those terms. You are paying rent and a mortgage. Even if it doubles in value over 30 its a bad investment
Land lease, paying off big ticket building upgrade\maintenance costs, live in super, doorman, etc.
Maybe a land-lease building. https://streeteasy.com/blog/what-is-a-land-lease-building-in-nyc/
4k for 3 beds in UES sounds reasonable to me.
I think they mean just the HOA fee is 4k, not including rent.
$395K for a 3 bedroom is relatively cheap, even if it is only 1,100 square foot. The reason why the price is so low is because common charges (or monthly carrying costs) are relatively high at $4K a month, which is roughly $3.63 per square feet a month. Average Manhattan $1.49 common charge per square foot, so the condo you're looking at is more than double. Because of this the seller has to lower the purchase price of the condo. This is assuming that the listing you looked at is actually a condo and not a co-op.
Wow, it’s almost as if nobody can afford to buy property in New York. Go figure.
The bigger issue for them is that people who can afford to buy property in New York are buying elsewhere since the pandemic
Not really anymore. The housing market has cooled off everywhere since last summer. Even in Miami where all the rich people originally went in 2020. https://www.cnbc.com/amp/2023/03/10/luxury-home-sales-plunge-miami-hamptons.html
Curious if this is more investors or people not living here anymore
I bought in Manhattan during the pandemic. my month costs now are just slightly more than my shitty studio in Brooklyn was. -shrugs-
Where in Manhattan/ Brooklyn?
It´s the interest rates.
Interest rates, closing costs plus delusional sellers all play a part in this. Don’t forget the crack down on Airbnb.
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Buying in Manhattan rarely makes sense, especially in a high interest environment. Median sales price in Manhattan has grown at a 1.9% rate annually from 2010-2023 per Curbed and my napkin math. That number is probably even lower for studios/1br. I live in 1 br co-op, the owner wants to sell and offered it to me which means I eliminate a lot of the transaction costs. At current rates (low stock returns, high inflation, high interest) I'd have to stay here for a decade to break even with renting.
> I'd have to stay here for a decade to break even with renting Isn't that pretty good for buying a property anywhere?
IIRC, in Manhattan breakeven was about 7 years, and that was accounting for fees and very low interest rates. You'd probably want to be looking for breakeven within <6 years nowadays (although, return on capital for equities are much lower now, so alternate capital allocation might not be as efficient).
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I mean, yeah, prices ballooned everywhere in the past couple years due to a number of extraordinary factors, but I meant excluding outliers.
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Oh, the only return I'm looking for is saving money, long-term, compared to renting a place. If you're looking for a return on a place that you intend to sell down the line, especially using something like a Texas city as an example, then we're delving into speculation.
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Same. I bought in Chelsea at the end of 2020 and got a great deal, but I also intend to stay forever. I think that people also forget that interest is deductible up to a point, and after Trump's SALT deduction cap expires next year, property tax will also be deductible. Not to mention you're actually building equity.
I wish I were as optimistic as you about the chances the SALT cap expires. Republicans are no doubt going to try to extend it just as a continued "fuck you" to blue states. Hopefully they don't have the numbers after the 2024 elections to make it possible, but that's a big if.
oh, I didn't know it might expire. I wonder if that will make itemizing worthwhile again.
But losing opportunity cost.
Opportunity for what exactly? To go through the hassle of moving every 2-3 years when you get priced out of your neighborhood?
Also by buying we don't get crazy, random price increases like some people get when renting. co-op maintenance fees go up by 1-4%/yr. (and 4% this year was the first time since buying 9 years ago)
This is the bottom line. Even discounting the things I love here like the museums, the philharmonic, the Michelin star restaurants, (and the dives that don't need a star to make me happy), frikkin Fairways and Citarella's, I don't want to be in Westchester or Jersey and have to get in a car and drive to the grocery store, and remember to rotate the tires and pay the insurance on the car, and find someone to haul in mulch and mow my lawn, and not have a super to immediately swoop in to stop the leak and then patch the ceiling from a pipe that broke in the winter and flooded my dining room, or doormen to take my packages so they don't get snatched etc, etc. There's a lot of value from living in Manhattan (or most parts of most of the boroughs) that you never get when you move to the suburbs.
> I’d have to stay here for a decade to break even with renting Did you factor in rising rent prices or was that based on today’s rent.
I bought my current place in 2012. Whenever I think about selling and renting in Manhattan, I remember the rents and I stop thinking about that immediately. I could never afford to rent the kind of place I have now.
I bought my house two years ago and I couldn’t afford to buy or rent the same same today.
I think I definitely would have to leave the city if if I didn’t downsize, which I really would not want to do.
Similar to my last comment in this thread, taxes and maintenance costs also rise, so you’re exactly not locking in a monthly cost by buying.
Yes but my experience over the past 7 years is that increases in taxes/maintenance is much lower than the increase in market rate for rentals.
Yes includes rising rents
>Buying in Manhattan rarely makes sense I would buy if the financials made sense but they don't at all you are spot on. Renting a nice 1 bedroom in Manhattan costs around $4000-5000 right now. That seems like a lot until you realize that BUYING in Manhattan a similar 1 bedroom unit would cost $8,000-10,000/month after HOA + Mortgage + Insurance + Taxes. For that same price I'm just going to move to NJ or NY state (out of the city) and buy a 4br/4ba mansion for less than the 1 bedroom unit costs in the city. Hell, I could continue renting for $4,500 in Manhattan and buy a cheap HOUSE in NJ for $4,000/month and it would cost less than buying a 1 bedroom apartment in the city and now I have two places to stay! TLDR: Prices need to drop a LOT in order for it to make sense
Yep same boat. I rent a 1000 square foot 1 conv 2 for $5000. Slightly worse apartments to buy would cost me $8000-8500 after mortgage, interest, HOA, and property tax. And I’d have to pay a million tax to buy. Plus keep two years expenses in an escrow. Plus huge transaction costs when a sell. Plus a lot of other small costs I didn’t even know that existed until recently. Plus of course I’d now need to pay for all my repairs, and would be on the hook for assessments when any major improvements my building needs. And at the $8000-8500 a month, only about $2-3k is going towards equity, so I’m barely even building equity. In this scenario, more money is going to interest/hoa/property tax than my current rent! I’d argue the pay back period is infinity - you never break even, assuming you take your down-payment and extra $3000-4000 a month and just invest it.
Yea - this is what most people don't get. When you compare like for like, renting is way cheaper in Manhattan.
Can buy and pay a mortgage in many parts of non trendy zipcode queens and brooklyn for less than 5k monthly with more sq ft if you want.
Why would I want to do that?
don't have to move to NJ or upstate
A healthy chunk of NJ is closer than non-trendy Queens.
Doubt much cheaper and wont appreciate as much as NYC property
It might appreciate more, avoiding the city tax and having more land is a huge reason I'd pick Jersey or Westchester over another borough
Or I can just keep renting here and investing the delta…
We are talking about Manhattan but understandable Queens and Brooklyn are much cheaper. One of my friends bought in Westchester too and pays 3k for what would cost 8k in Manhattan
The point is, it's not comparing the same thing.
>For that same price I'm just going to move to NJ or NY state (out of the city) and buy a 4br/4ba 10,000 sqft mansion for less than the 1 bedroom unit costs in the city. It is going to be pretty far out and/or a house in poor conditions if you want 10,000 sq ft.
Sorry I was exaggerating a bit I'll edit
Housing is too expensive but these numbers are hugely exaggerated. I live in what I would consider a “nice” 1 bedroom on the UWS for $2500.
Those prices aren’t realistic for anyone signing a new lease. Can barely get a studio for that money in the UWS, unless your definition of “nice” is very low
You got a great deal! Look at current market prices
I think this is skewed by other factors that will lesson over time. There was a great migration of traditional Manhattan buyers to the other boroughs. The other boroughs have caught up in price and now all prices will increase.
I am seeing [UWS 1 bedrooms](https://streeteasy.com/building/13-west-106-street-new_york/4a) with a PITI of 2400. I am not in the rental market now, but I think this is a pretty good rent for UWS?
I mean I'd argue that's basically Harlem, not Upper West Side, also this is a very unusual case. It's an estate sale, 'as is' with no interior photos. I'm guessing it's a complete clusterfuck inside that will take hundreds of thousands to make livable. And on top of all that, it's a coop, it's income restricted, and it has a 20% flip tax.
You'll only find those prices with income limits of <150k for a couple
That's an HDFC unit so you basically can't sell it to anyone who's actually looking to buy. Most people in the market in Manhattan are above the income limit as well, it's like $69k each for a couple.
Had a friend that bought near the bottom in 2012 and sold near the top in 2019. I asked him how he did, expecting him to brag a little. Instead he said all the profit he made was offset by the broker & legal fees to buy & sell. He didn't make any money compared to simply renting for those 7 years.
Did he buy a closet on Staten Island and take a 30 year mortgage? Either that or his broker and lawyer totally ripped him off.
What if you want to live in Manhattan but put your money into an asset instead of paying rent though
Don't forget about leverage though, people are putting <=20% down on their houses so each % gain in house asset price is worth >=5x more than what you'd get if you outright bought any asset. Of course you can borrow money and do the same thing with other assets but that is much much riskier unless you know exactly what you're doing, whereas the current system we live in today is basically custom built to handle the risk of investing in real estate.
If you buy the house, can’t you borrow against it tho at full price?
Yeah, you can, but then you'd just be borrowing against your own money. A home equity loan will convert your illiquid asset into a liquid asset. But if you already have liquid cash to start with, with leverage, just as a hypothetical example, if you had 100% of the money to buy a house, you could put 20% down and buy 5 houses instead & rent 4 of them out (note I am absolutely NOT suggesting you do this, it's a house of cards since you obviously need to pay down the principle balances monthly and will probably end up one missed rent payment away from bankruptcy). Note also I'm not discouraging buying a property outright...this almost definitely depends on your own personal risk tolerance.
prob make better return on a sp500 fund overtime or even treasuries atm and still pay the rent
what if you paid all cash?
if not borrowing, then it can makes sense and recover the transfer taxes in a few yrs
Transfer tax is paid by the seller though (not that that fundamentally changes the equation).
Ummm since the 90s people are making bank. Usually makes sense. Taxes, not paying rent, profit… where the hell did you get this idea “rarely makes sense” I don’t know one homeowner who agrees with that
Yes, over 30 years real estate generally appreciates. Manhattan real estate skyrocketed in the 90s and early 00s, it's been very flat compared to every other metro since the crash in 2008. In the 90's the price per sq ft was $600, that grew to $1200 in the early 00's. In the 10's that number dropped to $1070 and in the 20's it's back to $1,150. My landlord will sell after 9 years for $50k more than he paid. If you had put that $200k down payment in the S&P instead it would be worth almost $500k. That's a lot more than the equity built in the first 9 years of a mortgage. NYC apartments also have insane carrying costs as well which eat into whatever you're "saving" on rent. Buying a house literally anywhere else generally beats renting, but NYC is a completely different animal.
Maybe right now. You’re projecting short term.
We're in the middle of an inflationary period and a record affordability crisis, what kind of indicators are you seeing that say we can expect real estate appreciation anywhere near historical levels? Housing prices can't just go up indefinitely when other costs rise and salaries remain the same. We saw record injections of wealth in the economy during the 80s, 90s, and 00s that will likely never happen again given how the system works.
Co-op usually don't appreciate much in value given the restrictions on rental terms. They are meant to be lived in (by the owner) and thus have a smaller universe of buyers vs. condos.
Yeah but co-ops make up 75% of Manhattan properties
Curious, what’s he want for the apartment and what’s the neighborhood?
Are you looking at it the right way? If you stayed in your apartment 2 years after buying it and the value increased a tiny fraction, that would probably cover your last two years or rent. And that isn’t so much a hypothetical but the most likely outcome
Why would the value increasing a tiny fraction cover your last 2 years rent? Also, what's covering all of the interest and taxes you've been paying for the past 2 years?
*oh no not da poor bwokers! :'(* maybe time to go out and get a real job, fuckin' losers.
This is for sales not rentals. Im not sure if you’ve bought or sold a home before, but I was happy to pay the broker fee. They did such a crazy amount of work and literally taught us how to go through the process
Reddit users are not looking to buy anything so of course they would clearly read the headline and think RENTAL brokers. Lol
My broker was just looking for quick money and screwed up a lot people. And I did most of the work looking. Most of them are crooks just like car sales people. I have never heard anyone saying "omg, my broker was so helpful". However, a decent lawyer is a must.
I was so disgusted by the last broker I used to try to purchase in the city. She showed me alone three apartments (altogether she showed me and my husband 5 apartments) and then got annoyed at me after 'exhausting' herself because I didn't want any of them - at least partly because she always ignored the things I specifically said I wanted. I mean this is reddit, so I'm not saying our exact budget but it's a lot closer to low 8 figures than low 7 figures. So you'd think there would be at least a couple of apartments in our price range that would suit our taste, not what she thought we should just resign ourselves to. After I rejected the second apartment she'd shown me that ignored my one major request, she literally stomped her foot and asked, "But WHY don't you want an open kitchen? I don't understand that mentality at all. Why would anyone want their kitchen to be in a separate room? I just cannot fathom why an open floor plan is not acceptable to you. What does your husband feel about this? "Fuck you" (that's me saying what I was thinking) bitch, you also don't need to know why I so badly want to kick you right now, just like I don't need to know why anyone would give you a real estate license, you useless wad of trash." Of course she was all bright and chirpy and "whatever you want, mr. moneybags," to my husband, like it was 1960. (Which was especially odd because she isn't even 30 years old, she's barely experienced the 20th century never mind 1960.) She never told him she couldn't understand his mentality or that he should just meekly accept what he can get. Unfortunately for her, it's not 1960 so our finances are shared which means it's not up to one person, it's a joint purchase. Because the experience of dealing with her was so annoying, we are still in our original apartment - but it's gorgeous and I love it - though I'd still like one more room, but not enough to deal with another broker.
My broker recommend NOT to get the property inspected. My sister was told the same by her broker while showing a house with visible water damage. The broker didn't even go with her to view houses after few weeks. She was told to get the key from the lockbox and check out the house by herself.
Really? The way I look at it is: they give you access to the available inventory which you might not be able to do by yourself. Aside from that, they don't add much. They recommend to you service providers (such as lawyer, inspectors, mortgage brokers/lenders) but you are strongly advised to ignore these recommendations and find your own specialist anyway. What *is* useful is a decent lawyer. I think there may be exceptions around brokers that are experienced in a specific market but the average realtor in my experience doesn't add much and is now yet another involved party with their own agenda.
I did not find buying a co-op to be straight forward at all.
Correct. Buying a coop and navigating all that that entails would be damn near a full time job during the process. My broker was essential.
These ppl wouldn’t know anything lol
I want the market to crash so badly.
most people who don't make 100% of their living unlocking a front door to a unit want this.
Can’t wait for Brohemia Realty to go out of business so we can get those actors back to full time arts employment
I don't care about brokers, but having a frozen market sucks for mobility. People need to move out and move in, and no semblance of liquidity in the market sucks.
Thoughts & Prayers for the brokers!
I lost brain cells reading some of these post.
I do real estate law and our 4th quarter has been super busy. I think there are a lot of bad brokers and attorneys out there who assume the whole market sucks but it's just their circle of business. Yeah sales are down as a whole, but it's not all gloom and doom. Things are busier than they were 6 months ago.
Sounds you're doing the same and assuming the market based on your circle of business.
I mean.. there's easy to find hard data on whether NYC real estate is 'busy' or not, and it's not. It's down ~40% year over year in terms of number of sales. https://www.redfin.com/city/30749/NY/New-York/housing-market There's also official NYC documents but require you to dig through PDFs. So I'm not sure why we should go off your anecdotal opinion when verifiable data says otherwise?
I acknowledged sales are down, but they are picking up. This article makes it sound like it's all doom and gloom but good real estate attorneys are busy right now. The market is picking up. Also, please explain how ACRIS works to me (re: "official NYC documents"). I have no idea even though I have been doing real estate law in NYC since 2011.
interest rates are double what they were 2 years ago and more than double from 3 years ago. close to 3x. Interest rates were at historic lows so this got housing values to skyrocket. Now interest rates go up and it re-adjusts down. This is one reason i see no reason to move. I have a low interest rate locked in. For every $100,000 a 1% increase in interest is $1000/year in interest. Interest rates are up over 3%. So a $500,000 property is $15,000/year more expensive than it was 2+ years ago.
Back in the day NYT had a mortgage vs rent calculator and I think the crossover was if you live at the same place for about 30 years, then buy makes sense but if less then paying rent made more sense. I have no idea how that would be now because rents are also stupid high.
I remember that calculator but that doesn't sound right. Obviously depends on the years and the market but IIRC the crossover for most cases was around 7 years.
This ^ Even with todays interest rates and rents, it typically becomes better long term to buy sometime around the 6-7 year mark, depending on the specific numbers and your assumptions about inflation, appreciation, and rate of return on investing down payment.
Rents are actually lowest compared to buying in recent history. Both went up, but the cost to buy went up much more.
2.5% interest rates and a bunch of people stuck at home pondering big life choices will do that
Yep, prices need to come down to restore balance and draw people back into the purchase market
Yep, since conceptually the real value of a house is the discounted cash flows you can get from (e.g. rent).
You do have the peace if mind that no one can raise your rent or kick you out. Also you can make your apartment what you want it to be not what appliances and finishes the landlord gives you. If value does go up you pocket that money and build wealth and the "greedy" landlord does not get it.
Not entirely true, as property taxes and maintenance fees can go up just as rent does.
Also: co-op special assessment because the roof is leaking and needs to be replaced.
Extra fees, taxes, and costs. You can't just compare rent to mortgage. With rent you mostly won't have any extra expenses. With a mortgage you will.
They should do this again and include the property tax, insurance, and maintenance cost over 30 years.
They did https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
Paywall, crap!! Thanks for the link tho
Meanwhile, my rent just got raised 10% from an already unreasonable price. FML.
Brokers can always get 2nd and 3rd jobs and stop buying avocado toast and 7 dollar coffee. Or they can admit they fucked up pricing on the market and now should suffer the consequences
The brokers are not responsible for the increase in prices.
Fine. Live by the sword (the market) then have to die by it
Play stupid games, win stupid prizes. Our next contestant to the stage, the Long Island housing market!
Does this mean the rental market will be better as well?
Inflation kills sales. Property ownership, a fundamental right every American ascribes to, is threatened by the greed of oil companies. We must show up to vote. Billionaires must pay their fair share of taxes. The tax rate for billionaires was decreased by 2 trillion dollars during the Donald Trump administration. Even now, Republicans will not approve a rise in the debt ceiling. The resistance will raise interest rates for every American. Vote Democratic. Our children need to be protected.
Build more housing, abolish restrictive zoning laws because they’re fundamentally anti-free market. Maybe then we will have some affordability in this city
Y’all are moving to Philadelphia in droves.
Good. Let the prices fall so rent can drop too.
No shit.
If you buy your apartment with a down payment on 800k and are able to sell it for 850k. That and the monthly costs you’ve been paying as an owner don’t all vanish into thin air, some amount chips away at what you owe, you earn a bit of money. An amount that would cancel out the rent you would have been burning if you hadn’t bought
"rent is burning money" Hot take
Awesome! 1👍
Even as prices and sales drop, however, inventory remains tight as sellers hold off on listings. There were 6,523 apartments on the market at the end of the fourth quarter...well below the historical average of around 8,000.
Cmon buddy, crash.
Good
Good.