Real estate

The entry today is about the real estate market in New York City, particularly Manhattan and parts of Brooklyn. No offense to the other three boroughs, but given a choice I do not want to live there. However, have you taken a look at the real estate prices in Manhattan and Brooklyn. They are not high, they are insane.

Unlike the rest of the country which is undergoing a correction in the real estate market, NYC seems to be immune to the crisis. Part of the reason is that most units in NYC is made up of co-ops. And co-op boards are notorious for weeding out financially suspect individuals from their buildings. It makes sense since a few rotten apples will cost everyone in the co-op money. It also keeps prices artificially high.

So what are prices like in NYC? Let me say that I first looked at the market back in fall of 2004 and saw a listing for a studio apartment for 250K. Not bad because that is a good location with a lot of access to public transportation as well as a lot of trendy restaurants. The problem was that the apartment was listed as 250 square feet. Mind you, this was not 2005 or 2006, but 2004. Crazy prices and the sad part is that it was not the top of the market. There is a great article in the NYTimes about the price of studios in NYC these days.

Over the last couple of weeks, I have gone to about a half dozen or so open houses in Brooklyn Heights/Downtown Brooklyn. Unfortunatley, I am not independently wealthy, just another worker bee trying to buy a first home. My budget for an apartment is not small in most parts of the country, but in the parts of NYC that I am looking to live in, I can afford a small 1 bedroom apartment or maybe a decent sized studio.

The most importatnt lesson I have learned is that size does matter and floorplans make apartments look larger than they actually are. The 1 bedroom units I have seen feel extremely cramped. The bedroom according to the floorpan was 14x11 but my measurements show the bedroom to be about 11x8. I do not think the walls are 3 feet thick, but maybe I am wrong. In any event, the best unit of the many I have seen is a 630 square foot alcove studio. It was priced a bit high, but again, this market is in my opinion not very rational. Maybe I will bid, but right now I think I will try to wait it out and hope prices will fall.