9/28/2005

A million reasons not to move to New York

What does a million dollar house look like? Three car garage, 6,000 square feet, pool in the basement, and an included chef that will cook you lasagna anytime you want it? Well thats what I would want if I paid a million dollars for my house. What about a million dollars for a one bedroom apartment in Manhattan? I can't even imagine forking out that kind of dough for the bare minimum. According to a recent Census Bureau survey shown in this article, over a million houses in the United States are now selling for over a million dollars. These are not all opulent houses that you would expect in the Hamptons or in Laguna Beach. A one bedroom apartment in downtown New York is going for a million dollars. Sure location is everything when it comes to Real Estate, but a million dollars? This is more of a FYI article than anything. I just can't believe that the price of certain locations with respect to real estate is going up as high as it is. In order to live a decent lifestyle in certain locations, you are going to have to have a pretty hefty bank account.

11 comments:

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Logan said...

Destiny, I liked your blog. To add to the costs of living in New York City, the average parking pass is going for around $80 a day! So, after spending a million on a one bedroom crib, how can anyone afford to park their car? Even if it is 1972 lime green Volkswagon bug!

emily said...

All I can say is that if you can afford it, than go for it. There are many people that do pay for these apartments, but they don't have to. I think they really just want to. If I could afford it I would be there in a minute. It is just that some peoples situations are different and they can pay one million dollars for an apartment. Plus these are not just some sleazy apartment anyways. They are very high class, elegant apartments.

sara said...

Destiny, Destiny, Destiny- Stop and think for a second. Have you not learned anything in your Managerial Economics class? when there is limited quantity of a product then the product becomes very inelastic, and the price will go way up. Are these apartments suppose to sell for half the value of the property simply because prices are too high and you think that they are ridiculous. Its supply and demand baby, it has to work this way or it wouldn't work at all.

destiny said...

I understand that the prices are going up because of the limited supply of housing, but I just find it hard to comprehend that people end up paying these prices. I guess people live in these areas for reasons like their job, or family and they don't really have a choice of how much they pay for their apartment. I would assume however, that these people will be able to sell for more than they bought for.

Dr. Tufte said...

Destiny - try to make the text of your link more informative please.

-1 on Emily's comment for a spelling error.

-1 on Sara's comment for a spelling error.

To interpret this properly I think we have to recognize that real estate is a bundled good. For a million dollars in Cedar City you get the big house and not much to do. For a million dollars in New York City you get an apartment plus proximity to all the things you can do there.

I had the opportunity to live in London for a while when I was a student. There, no one spends any time in their small cramped place - they all get out and spend their time in public places engaging in many activities that you can't easily find elsewhere.

Morgan said...

It really is amazing that a small apartment in New York City costs upwards of a million dollars, however if people are willing to pay for it, sellers will undoubtedly charge what they can get away with. Because there is only a tiny minority of people in the world, much less New York City that could afford something so expensive, I am wondering where everyone is living, or more importantly, how they are living? When prices that are ridiculously high are the standard in an area, what is the quality of life like? I suppose there is a small population of people living comfortably, with the majority of residents living in the slums.

Jordan said...

Dr. Tufte said:

"To interpret this properly I think we have to recognize that real estate is a bundled good. For a million dollars in Cedar City you get the big house and not much to do. For a million dollars in New York City you get an apartment plus proximity to all the things you can do there."

I never thought about it this way before, but it makes sense. This is probably why "location is everything." Being in close proximity to many things would increase home value. This is especially true in New York City.

Isaac said...

Dr. Tufte mentioned that "real estate is a bundled good". This is an interesting way to look at it. I guess it all boils down to the preference of the individual. Every real estate market presents its’ own bundle. Either Cedar City’s relaxed family environment with decent schooling and no traffic or New York with its hectic environment and top of the line fashion. Whatever floats your boat.

Matthew said...

Dr. Tufte said that real estate is a bundled good. This means that when people are looking to buy a home, they are not just looking at the home. In a sense, they are buying a home, a neighborhood, a school system, a shopping district, a job market, an amount of gas from the home to where they want to go, etc.

Dr. Tufte said...

-1 on Matthew: I can't really see what you got out of this.