It Pretty Much Sucks to be a Seller Right Now
This weekend’s real estate cover story in the Times examines the plight of folks who have to sell their homes now because of things like job relocations. Case in point: “Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple…
This weekend’s real estate cover story in the Times examines the plight of folks who have to sell their homes now because of things like job relocations. Case in point: “Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid. They hoped to make a similar killing by buying into another gentrifying neighborhood. ‘I used what I called the Starbucks index,’ Mr. Rogers said. ‘There were no Starbucks around in Hell’s Kitchen when I bought there, and when I sold there were four. There were no Starbucks here either when I bought.'” Fast forward to now, when Rogers has been relocated overseas, and we find the family unable to rent the condo or sell it for what they paid a few years ago (which would mean a loss of around $60,000 in transaction costs). Other hard-luck stories include a couple who have to sell or face housing their baby in a closet. The unifying theme: It’s tough out there for sellers.
Gotta Move, Gotta Sell [NY Times]
Pic by AnnabelB.
Also, if the Rogers couple’s whining doesn’t get your blood boiling, the fact that a six figure couple (and good for them) sitting on a windfall of a 900k sale gets you – the tax payer, to subsidize their property taxes on their luxury condo (they probably got a 15-20 abatement)while struggling homeowners have to pay theirs. It’s just priceless.
NorthSlopeRenter- Yeah- I haven’t been in NYC long. Only the last 34 years. “Negotiating” a 12 month lease to an 11.5 month lease is not exactly what I meant by negotiating. I really mean the rent. Everyone renting today wants at least some percentage off the stated rent – even if the landlord thinks they already discounted the rent below market. But congrats on taking 2 whole weeks off that lease.
Oh wow, judging by the location and the pictures, I think we almost rented one of those duplexes last year when we moved from Williamsburg. When I say, “almost rented,” I mean, “decided not to even look at because the location and price didn’t seem worth it even though they were enormous.”
If it’s the same development, the one we didn’t rent was renting for $2600.
I wonder if the rogers couple is related to the writer. . .
“Why not take what you can get in rent since you have virtually no carrying costs?”
Because they “listed it at $3,600 a month…But the rental house they found in Geneva cost $5,000 a month”. The relocate-before-you-sell version of ‘underwater’. But even that aside, if they maxed out their cards you KNOW they maxed out their Automatic Teller Mortgage (Voila! Instant carrying costs – that’s how a lot of elderly, outright owners got shafted). Don’t forget about the REFI aspect of this MAB.
MM – The latter part of my previous paragraph applies to your post. You have to rip off a massive chunk of those sellers, or potential sellers (shadow inventory), who have only gross equity by calculation of comp minus nominal purchase price. REFI’s were HUGE and a significant part of consumer spending. I’ve never seen so many BMW’s, Benz’s, Rovers, restuarants (well, back then), crowded airports, etc, as I have over the last several years of this historic asset bubble.
“MM — exactly. Which is why the bottom is a ways off — sellers still very much holding out against serious price cuts.”
No no no no no…banks are holding out. Compare pre-foreclosures to actual foreclosures. They know better than to proceed and further depress a colossal inventory of listings, especially in so-called subprime hoods. This phenomenon is widespread throughout the nation, esp. in FL, and only getting worse here.
***Bid half off peak comps***
As always, it’ll end in tears for many. Just human psychology…
MM — exactly. Which is why the bottom is a ways off — sellers still very much holding out against serious price cuts.
“Then what?”
Declare bankruptcy.
I would qualify the title of this thread to: “It pretty much sucks to be a seller now who bought an overpriced place within the last few years.”
But there are many sellers, or potential sellers, out there who bought pre-run up who can still make a tidy profit, even if prices go down as much as 50%. Remember everyone, prices in many areas more than tripled in 10 years (1998-2008). I know of quite a few houses for sale right now that are lingering, where the sellers are asking almost twice what they paid a few years ago (and no, they did not pay a lot for renovations since then). Even with big price chops, they’d still come out ahead…