Yeah I cant believe it either - i think this could be the last gasp before a summer lullI'm quite surprised at how quickly some of the high end listings have been going into contract because even at the high volume over the last 18 months, the average days on market I've seen stated for newly in contract high end have been rather long.
I can't wait to see how Bitcoin plays out and how it affects some newly minted rich folks. Also how stock options for tech bros work out.
As far as macro effects on the Real Estate market, they usually are slow in coming. I remember after Black Monday in 1987 lots of people said it wouldn't bang on to NYC Real Estate. Well, first volume slowed but prices didn't crack much till 1989. But three year after that in 1992 there were segments down 75%. And even the stuff that was faring well was down 1/3. (NB don't try and read the reports from Manhattan Residential Brokers from that time period because they were mostly for show and the data was pretty sloppy).
Are you sure? In my experience, had you done that your hindsight would now be saying “Damn, I should have kept my cheap 3% loan and the $400K in cash, to deploy at these cheaper prices!”Hindsight, I should have used the $400K to pay down my mortgage to guarantee a 3% post-tax return (4% pre-tax return).
Are you sure? In my experience, had you done that your hindsight would now be saying “Damn, I should have kept my cheap 3% loan and the $400K in cash, to deploy at these cheaper prices!”
FWIW, on StreetEasy I made a case for why I could see myself doing just that last year (had I been a buyer). That ran very counter to the prevailing sentiment. In a world of ZIRP and meager stock / bond yields, 3% guaranteed after-tax seemed attractive IMO. But for the most part, people seemed to think that leveraging the cheap money into stocks, junk munis at 4%, etc. was the better way to go.
Not sure I am understanding this, I thought you have been long on stocks after the bear markets of 2009-2009 and you should have a lot of prior gains from the long bull market. I guess you always keep a high percentage of net worth in cash, while I have been fully invested after one or two years of cash for the emergency.And unlike you, I didn’t have any stock holdings sitting on prior gains.
This asset allocation change is purely due to the sale of the stock/bond last year for the down payment of the new apartment and renovations of two apartments. It didn't make much difference anyway as both stock and bond went down and also there is not much money left in the taxable account before the selling of my prior apartment early this year. The asset allocation for the new $400K will stay 80/20 for many years to come.so my asset is changed to 80% stock and %20 bond rather than 65% stock and 35%bond.
I sold my long-held stocks in 2018, rotating the money (in a tax-efficient transfer) into other investments. The valuations had become less attractive over the years, and attractiveness / availability of the other investments had increased. My average stock dollar was up ~3x (didn’t buy it all in 2009), so I missed the additional 50% (including dividends) cumulative over the past 4 years. OTOH, my other investments have been up 100% over the same period so it turned out fine. Nevertheless, my accumulating cash “missed out”.Not sure I am understanding this, I thought you have been long on stocks after the bear markets of 2009-2009 and you should have a lot of prior gains from the long bull market. I guess you always keep a high percentage of net worth in cash, while I have been fully invested after one or two years of cash for the emergency.
IMO, the ~16% drop in stocks seems more palatable than the ~16% drop in bonds. Losses of that magnitude, and more, are par for the course in stocks. OTOH, bonds are often touted as “safe” and a hedge during periods of market turmoil.This asset allocation change is purely due to the sale of the stock/bond last year for the down payment of the new apartment and renovations of two apartments. It didn't make much difference anyway as both stock and bond went down and also there is not much money left in the taxable account before the selling of my prior apartment early this year. The asset allocation for the new $400K will stay 80/20 for many years to come.
I only rented in UES more than 20 years ago for one year when I first moved to NYC, then I moved to Queens living in different neighborhoods. I first rented in Woodside, Sunnyside, and Forest Hills, and then bought a coop a little bit less than 10 years ago in Jackson Heigths. Last year, I upgraded the coop to the forever home, still in Jackson Heights.BTW, I thought you had been renting the last year and looking to buy in the UES. I guess you’ve already bought, then? Was it in UES or Woodside?
The household savings from W2 income to net worth ratio moved from 10% to 4% during the last 10 years.How much does income savings add to your net worth annually in expectation? For me, it used to be as high as 30-40%, which increased my appetite for holding zero-ish cash: potential future opportunities could always be met with a chunk of fresh cash. Nowadays, it’s dropped to 10%, which makes me more inclined to hold cash for potential future opportunities if current ones look less attractive.
I was not realizing how the household savings to net worth ratio impact the investment strategy. The high ratio can always give fresh cash to the investment.For me, it used to be as high as 30-40%, which increased my appetite for holding zero-ish cash: potential future opportunities could always be met with a chunk of fresh cash.
I remember when the Dot Com bubble burst and Greenspan testified before Congress. Someone asked him if it would crash the economy because the Wealth Effect would disappear. He answered that they had researched and discovered people weren't spending their stock market gains, but instead were doing cash-out refis on their homes and spending that money. Ran a chill up my spine because my experience told me where that would lead.Rationally, I agree. But I’ve learned that people do not necessarily behave in ways I consider rational.
It’s also going to be interesting to see the effect on people who levered themselves up on RE to deploy cash elsewhere. E.g., borrow via a mortgage at 2.x% to buy stocks, bonds, etc. at anemic yields. People seemed to like the margin-call-free nature of mortgages as a source of leverage, paying an extra 2.x% for it relative to proper margin rates.
I think what you said is probably applicable to other states. The crash of real estates crash in other states will have some impact on New York.My 40 years experience with such situations says that psychologically those who play that game will have a high likelihood of walking away singing "it's the bank's problem now." Unfortunately if that group is as large as I think you are implying it is, that could cause a sharp downward pressure on a market which (again big if) would already be in not great shape.