Curbed recently had some responses from its readers on whether or not you should buy a Manhattan apartment now, or wait on the sidelines in anticipation of a market correction. Here are samples from both sides.
The bear case:
". . .any rational person knows instinctively that, right now, the market is stretching toward its topside and the growth curves will average themselves out to something rational.
Extraordinary value growth cannot be sustained, especially not in the local market where luxury condos are the new tulip bulbs.
. . .
Luxury condos, meanwhile, will start ending up on the foreclosure market; luxury rentals will find themselves hitting lean times. They either must lower their prices (which is about to start happening) or risk the loss of the entire investment through bankruptcy or foreclosure. Since a lot of people will have no room to adjust their price expectations, they will perish in the market. Blood in the streets. You can then start the newest iteration of Curbed, called FuckedProperty.com."
The bull case:
"The benefit of owning your home is its an asset you can live in it, both in up or down markets; better yet, when times are good, you can borrow against it. As long as you have the personal discipline to manage your finances, the cycles of the market are completely irrelevant to a home owner. . . .
So while you've been waiting to time the market and guess the right entry point, I've been building equity in my homes and increasing my equity base. . . .But let's say your pessimism holds true, . . .then supply may indeed catch up to demand with buyers caught off guard (although you weren't), resulting in declining value of owners' home equity values today. But then it's safe for me to assume that the market, in general, has become cheaper, and I'm in a position to replace my assets and reshuffle my portfolio (replace my cheaper home with a significantly larger also cheaper home, or downsize my exposure and replace my home with a smaller place, or just refinance my mortgages), to take advantage of the next market cycle."
And this from the Proerty Grunt:
"I am already meeting buyers who are taking the I will look but in no rush stance. On my end there have couple of price reductions on some listings and I am noticing overall that the market is starting to slow down.
However this could all be premature since the fed hasn't made a move since Katrina. But until Greenspan takes some type of action I would not be surprised if more buyers become gun shy."Staying on the Sidelines
Please feel free to (in fact you are encouraged to) leave your own thoughts in the comments section here.