New York Real Estate [Article]

[arebelspy]

Interesting Gawker article on NY Real Estate: New York Housing Is Great, As Long as You're Rich and Live Elsewhere

I find manipulated markets quite interesting, as they just don't perform the way they "should" (the way an unmanipulated one would based on typical supply/demand models).  This article has some great hard data on NY real estate. 

[Lentils5eva]

While Ioseftavi and I have NEVER paid anywhere near the rents that the chef in the article is paying, we can confirm that for anyone other than the ultra-wealthy, or those who refuse to even try to stay in a budget for their Manhattan housing, looking for a place to live is COMPLETELY TERRIBLE here.  Awful.  We looked at about 15-20 apartments before finding our current place.  Some of them were appalling.  In one the kitchen was so narrow that you could not open the dishwasher door, rendering that enthusiastically touted "luxury feature" basically useless.  Trying to look for no-fee listings is ulcer-inducing.  Listings are full of out and out lies.  One time, my roommate (pre ioseftavi) and I went to see a place advertised as a 2 BR, and when we got there, it was a studio, and the broker told us that for $1500 we could have a temporary wall installed that would divide the (very small) living space into two (unbelievably tiny) bedrooms. 

Broker fees are also a huge racket.  It's like a tax you have to pay just to live here.  Brokers add no value - it's like a protection racket - you just have to pay them to get in the door somewhere, and often your "broker fee" doesn't even cover your credit check - you pay for that separately.  I'm practically frothing at the mouth thinking about how the broker who showed us our current place (who, it should be noted, did not even know the name of the landlord to whom I would be making out my cashiers' checks) told us that the broker fee was going to be 15% of our annual rent.  We refused to pay that much, which really took some nerves of steel because I was a week away from homelessness when we finally found this place.  Even so, the one month's rent we paid her still rankles.

I never feel more sh**-upon by this city than when I'm trying to find somewhere to live.  The sneering disdain you get when you tell brokers your budget, combined with the kinds of absolute pits they will show you that are "in your budget" are enough to make anyone feel super poor and super deprived.  It's insane. 

On the bright side, my pure unadulterated hatred for moving makes a very handy excuse when I get funny looks from spendy coworkers finding out I live in a working-class neighborhood in an outer borough.  It's easy and 100% truthful to say, "well we like our place, and we really really hate moving." 

I think I need to go do some yoga to calm down after thinking about this.

[brooklynguy]

On the bright side, the NYC real estate market is so horribly inefficient that it isn't that difficult to find some nice arbitrage opportunities.  Generally speaking, rent multiples don't support the prices, but my two-family rowhouse was a pretty good deal (the high rental income generated by one of the units lets me live in the other relatively cheaply).

These kinds of articles (or more accurately, the kind of articles this one makes fun of, like the ones referenced from the NY Times real estate section) have a myopic vision of what constitutes NYC real estate.  If you look at real estate prices in, say, one of the various immigrant enclaves deep in the outer boroughs, you will find a very different picture.

[GrayGhost]

Having lived in the vicinity of Manhattan for a few years, I completely concur. The market is severely distorted by people who want the prestige of owning properties that look gorgeous from the inside in NYC, when they don't realize they could get four times the house, newly constructed, for half the cost elsewhere in the country.

And once you leave these sought-after zones, the prices of ownership plummet and it starts to make sense to be a landlord.

But fuck me--why would you even consider buying a property with a 3% cap rate? I can't think of any reason at all to do that in NYC, because it's doubtful that the market value's going to jump, because it's already sky high!