Open House Picks: Six Months Later
Comment: Not overly impressive. Open House Picks 4/18/08 [Brownstoner] Six Months Later: 4/11/08 [Brownstoner] Six Months Later: 3/28/08 [Brownstoner] Six Months Later: 4/11/08 [Brownstoner] Six Months Later: 3/14/08 [Brownstoner]
Comment: Not overly impressive.
Open House Picks 4/18/08 [Brownstoner]
Six Months Later: 4/11/08 [Brownstoner]
Six Months Later: 3/28/08 [Brownstoner]
Six Months Later: 4/11/08 [Brownstoner]
Six Months Later: 3/14/08 [Brownstoner]
Also, traditionmod, not “everyone has to continually point out” what you insist upon – just those who want to cling to the inflated values of the peak, despite abundance evidence that those values were overblown and unsustainable.
Traditionalmod – Saying that mentioning past prices “doesn’t have anything to do with anything” sounds like denial to me. My comments have nothing to do with “fairness” or “resentment” – you completely misunderstand. My point about the rapid rise in values in the last decade was that we have been in a bubble, and in bubbles, values rise beyond where they rationally should be. Historically, there have been metrics to determine rational values (i.e. in stocks, P/E ratios, in homes Case-Schiller index) but in bubbles, a financial mania overtakes a crowd and those metrics temporarily go out the window. Sure, value can be defined as what a buyer will pay, but as we are seeing all around us, many buyers are now realizing they paid too much, and cannot afford their homes. Current and future buyers will thus be more cautious (and will be forced to be, since getting a mortgage will be so much harder). So I do think looking at history, esp the price climb of the last few years, is relevant to point out since values have obviously gotten totally out of whack in many parts of our economy, though now we are experiencing a plummeting of those values, and NYC is very likely to experience a correction too.
Again as everyone has to continually point out, what somebody paid for a house 7 years ago doesn’t have anything to do with anything. If somebody can find a buyer to pay the amount they ask or will settle for, that IS the value. If you resent somebody’s profit so much, does that mean many years from now you will sell at a discount too just because you think it’s unfair to make so much money, Miss Muffet? Didn’t think so. You only believe in this concept when you’re buying!
Ms. BG – one important note is that there is no longer a deadline to reinvest the proceeds from your primary residence into another one. So, people like me who have already sold can take however long they want to buy a new place. Not great news for sellers in this market, since this means that even cash-rich buyers have one less incentive to buy quickly.
As for how people get loans for renovation on top of the purchase priced, I suspect things are changing on this since overall, it is just harder to qualify for as much of a loan, and banks will probably be a lot more careful in looking at the true appraised value of the house. Already appraisals were becoming more conservative when we were selling so I think the answer is that again, for people who want to renovate, they will expect an even lower purchase price to be able to afford the property since the days of huge loans and happy-go-lucky home equity lines are probably coming to a close for a while.
On the other hand, I think if you were to put your place on the market at a really low price, I’d be surprised if it did not get snapped up. What sellers still have working in their favor is low inventory, and there is demand out there (I’m proof of this!) So yes, there *are* buyers, even if the overall pool has become smaller since financing problems have disqualified a lot of people, and many of the remaining ones, like us, have become more cautious in terms of what they are willing to spend. It’s hard to swallow paying 2million+ for a house that cost 1million less than 6-7 years ago, when all around us, values on other assets are plummeting and we are realizing that, what seemed like reasonable values were more like the emperor’s new clothes. I know many people like to point out why NYC is different, and in some ways it is, but people forget that many other urban areas also previously used similar logic to believe they were immune, and yet these areas also got hit hard by falling values. But, if your next door neighbor recently bought their house for 2mil and you put your similar house on the market for 900K, I think it would go fast and you may even have a bidding war, since putting a low price on a property would probably instigate a lot of interest. Hell, I know if I saw a house on the market now for 900K that resembled the 2mil ones I’ve been seeing, I’d certainly jump!
Whatever you do, I wish you luck!
Lalaland,
Hi again. Sorry for ripping into you t’other day…but you were rather rude to me. I’m too old to remember what it was about.
Anyway, yes, if the brothers and sisters of the Kermit Place house live way out of state they may have made enough money to buy a couple of homes outright. A friend of ours of Norwegian stock in South Dakota bought back her grandfather’s Scandinavian style farmhouse, barn and 80 odd acres of the original huge farm for a shockingly low price. I keep forgetting but I think it was under $100,000! My goodness.
Miss Muffet,
You must type 80 wpm! Some days you’re everywhere in the comments all at once. Brava! I’m already feeling sorry for the seller who you buy your next house from. 😉 Maybe it will be us! I’m getting sick of NYC. I want the great outdoors before I go…really. Vermont? NH? The Finger Lakes? The Berkshires? Regular trips to warmer climes…
Maybe it’s all just from boredom…
Anyone want to take our house off our hands and renovate it for a nice couple of families to live in? I’ve been despondent lately that we “didn’t sell two years ago when I said we should have”. In fact the husband unit told me last night that I had to stop blaming him, that I wasn’t particularly motivated to make a move these last years…Hhhhh…but I kind of was…I think. But I think I was also complacent with the sale prices continuously increasing. It was also kind of EXCITING!!! I asked him “who could tell the cliff edge was so close in all that fog?”
We chuckled that all our neighbors would hate us and just croak if we stuck our house on the market for $900,000 or something way below the (current–eeek) market…and sold in a couple of weeks. The neighbors would be mad because everything has gone for so much more all around us, most of it also selling in very little time (for twice as much). Would that burn everyone who bought just below and just above $2M?…who knows. I figure if someone came in and decided they needed to put in, I don’t know, maybe $300,000 work of work…that would be a LOT I think…they would get an incredible deal.
I just wonder if there are any buyers right now. Wouldn’t it be horrible if we went very low and it still sat on the market?!!! I shudder to think! I’m laughing through the tears!
My logic is that there are many people who sold their apartments or houses in the crest of the wave over the last two years who are going to need to use the bulk of the profit, ploughing it into a primary residence for tax purposes before their 2 year period is up. Maybe I’m wrong, but I feel there are people sitting on enough banked profit they could buy a standard FG rowhouse with a conforming loan with the rest in cash from their last sale…or might even swing it with no loan. Who knows.
As a sidenote, how do all these new purchasers getting loans that work in budgets for full renovations? Do they buy the houses in “turn key” condition so the bank appoves the loan and then rip the plac apart, or are they actually getting mortgages to purchase and renovate houses the bank knows are not “turn key”? I know nothing about this…am very curious though considering how many renovations have been going on all over the place the last couple of years.
Ms. Muffet must have ideas on all this.
Have a good weekend everyone!
Ms. BG
For what it’s worth, heard the Kermit place house was an estate sale, and the inheriting owners were from way out of state, so that probably helped move it a lot – it was listed at 700k; owners smart to take that offer. Nice little house on a nice little block though! Very friendly salesperson…
Also, BHS evidently had to slash Park Place some more – on their website, the current price is $2,100,000. Another factoid about BHS: they list their 3rd Street house (asking price $4,195,000) as having “contract signed) but the very same house is on the Corcoran website as a rental for $15K/month.
More evidence of price cuts. Sebb? Sebb? Where are you?
By the way, the house on Midwood was probably priced well to begin with so shows that, if you price conservatively, you can get a buyer since there are buyers out there who will bite for the right price.
The Albermarle listing says “contract pending.”
I’m gonna guess and say for a hundred thou less than asking.