As someone with a journalism background, I get very frustrated when I see pieces such as the one that 20/20 did today about the so-called decline in the New York City housing market. It was sloppy and inaccurate, and clearly put together by someone who doesn't understand the market. Even the woman from Brown, Harris, Stevens who made the outlandish claims that the New York City real estate market who going down has been slightly alienated by her company. Way to find good sources, kids.
I work in real estate everyday, and I can say with certainty that if there was ever a time of opportunity in New York City real estate, this is it. Housing prices have come down, as have interest rates. If you have good credit and good savings, you might find yourself in a favorable position to buy. Yes, you may have to put 20% down, but it would mean less to finance and pay off in the long run. And no one likes debt, right? (Certainly not the federal government, apparently.)
Of the many misleading parts of the ABC News piece, it focused on very high end apartments, and mostly co-ops.
Your typical New York City apartment does not cost anywhere near $50 million dollars. This piece would have you think you would need a king's ransom to own a home in Manhattan. In the past year there have been two developments that sent the average apartment price in Manhattan over the top: 15 Central Park West and The Plaza. Those are the $50 million palaces they were alluding to, and they are few and far between. If you have $500,000, you can find something in Manhattan. Heck, you can even find something for $350,000 is you wanted to. It would be a studio, but it would be yours.
Co-ops are notoriously tough, because the co-op board has to consider the health of the corporation, the building that you're buying into, when they screen applicants. It is, in fact, the co-op system in New York City that saved the city from much of the foreclosure mess the rest of the country is experiencing, because co-ops have stringent financial requirements, beginning with but not limited to your debt to income ratio (it should be under 30%, if not 25%) personal savings and assets as well as how you plan to finance your apartment. If you can't afford the place, they won't let you in. Good for them for being so responsible.
What you do for a living isn't as much of an issue as how your financials are. True, I had a listing agent rumble this week about a rental applicant's guarantor who worked in financial services, but by and large being in banking isn't going to be a liability. One would hope that someone who works in banking would know how to manage their salaries and bonuses so that they would be solid in case of an emergency.
The larger issue is why ABC News was using someone, Holly Peterson, who wrote a very bad chick lit book about being a socialite as an authority on real estate finance.
Till next time.
