Real Estate - 1 Bedroom Condo for $450k. Should I Buy?

Originally posted by: Doggiedog
Sounds cheap. The average price for a 1 bdrm in Manhattan is about $1M.

1BR goes for $400 - 750, depending on neighborhood, view, etc. Would have to be a pretty awesome apartment to go for 1M.

 

[sourceninja]

I'm soo glad I live where I do.

I'm building a 4 bedroom 3200 sq ft house for a little less then 200k with the lot.

 

[DBL]

Originally posted by: dwell

Originally posted by: Doggiedog
Sounds cheap. The average price for a 1 bdrm in Manhattan is about $1M.

1BR goes for $400 - 750, depending on neighborhood, view, etc. Would have to be a pretty awesome apartment to go for 1M.

Actually, the AVERAGE apartment sold for over 1 million in Manhattan last year.

 

[StageLeft]

Originally posted by: DrPizza

Originally posted by: Skoorb

Regarding bubble, it may not burst. It may. When? Who knows. If a $450k house is $600k in three years and then the market sheds 20% of its value you still come out ahead.

But, who's to say that the value of a 450k house is going to go up by 10% per year? Would a similarly built home 25 years ago have sold for about 42 thousand? If you're assuming 10% a year, then you'd have to have started off at 42K 25 years ago to get to 450k now. At that rate, it would have been only worth 280k 5 years ago. Unless average wages go up by 10% a year, then housing values cannot possibly continue to go up at that rate.
Go beyond 3 years from now... that would imply that the 450k house today will be worth 1.267 million in 10 years. Does anyone dream that their salary is going to increase at such a pace that they can afford a million+ dollar home in 10 years??

Personally, I think part of the reason for the bubble is that it's a self-fulfilling prophecy. If the media reports "houses are going to go up in value by 25% during the next year", then a ton of people are going to think "crap, we better buy now or we won't be able to afford a house next year." A lot will think "I'll buy now, and sell a year from now, making 100k profit on my investment." Demand will increase for houses, and prices will go up.

But, if you report that "house prices are expected to fall by 25% during the course of the year, then everyone's going to wait to buy... demand goes down, and prices fall.

On top of this, factor in how an increase in interest rates will affect sales...

They won't appreciate like this forever, but they may continue to skyrocket in some areas. You're right about a self-fulfilling prophecy. Such a deal has been made of bubbles now that if there is a slight depression in house appreciation people are going to say "That's it, it's burst!" and then it really will burst because everyone will think it's going to.

 

Originally posted by: DBL
Actually, the AVERAGE apartment sold for over 1 million in Manhattan last year.

Average apartment, not 1BR.

Here check yerself

 

[DBL]

Originally posted by: dwell

Originally posted by: DBL
Actually, the AVERAGE apartment sold for over 1 million in Manhattan last year.

Average apartment, not 1BR.

Here check yerself

Did I say 1BR?