We have no doubt that the problem Motoko Rich describes in today's Times ? that of the New York apartment owner who wants to trade up, but can't because the market's too frothy at the top ? is real. But we're having trouble with the math on the first example in the story. David and Christine Boals, a Manhattan couple with two young children, made $100k on the sale of their 1-bdrm apartment. And then they went looking for a bigger, shinier apartment. The result, as Rich tells it,
"For the Boalses, who had owned their previous apartment for just three years, the best option was a $950,000 unit that had gone unrenovated for 30 years. But since it was only slightly larger than the apartment they had just sold - and would require a mortgage nearly twice as large as their previous one - the couple decided to rent."So the Boals sell their place for, say $550k. And then all they can find is a slightly larger shithole for $950k? Whaa!? Something's fishy here. Possible explanations: 1) slightly larger is loosely defined (say, 900sqft to 1500sqft); 2) they were insistent on moving to a better 'hood; 3) prices were rising so dramatically, that they were locked out of the market during the week between the date they sold and the date they decided to buy again; or 4) they got fucked on the sale of their first apartment. You should have held out for $900k, Boalses! Or 5) maybe it all makes sense and we're just a little bleary. UPDATE: Brownstoner says it's #5.
· Trapped in the Bubble [NY Times]