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July 20, 2009

It Pretty Much Sucks to be a Seller Right Now

everything%20must%20go.jpg 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.

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whoa, one of these guys is an ex-bf of mine.

Posted by: bowl of dicks at July 20, 2009 9:19 AM

And the woman putting her baby in the closet is my ex-girlfriend.

Posted by: Johnny at July 20, 2009 9:22 AM

quote:
They hoped to make a similar killing by buying into another gentrifying neighborhood.

::seething hate::

*rob*

Posted by: PitbullNYC at July 20, 2009 9:28 AM

And that closet is the one Dave came out of :)Sorry Dave i could not resist

Posted by: brickoven at July 20, 2009 9:29 AM

The paradox: Those who are forced to sell now may actually come out better than those who are waiting for the market to "return to normal" and end up selling at even lower levels later in the cycle.

Posted by: lechacal at July 20, 2009 9:31 AM

It's been over 25 years since I've been in the closet. I can now usually be found lurking around the kitchen and harassing the dishwashers.

Posted by: daveinbedstuy at July 20, 2009 9:31 AM

glad you have a good sense of humor

Posted by: brickoven at July 20, 2009 9:33 AM

on a ratio of body size to living space, that baby is going to make out quite well.

Posted by: the chicken at July 20, 2009 9:36 AM

Easy come, easy go.

Posted by: Minard Lafever at July 20, 2009 9:41 AM

Poor Guy, he's not going to triple his investment in 5 years twice in a row. What a hard luck story. Life isn't fair. I think all of us renters and responsible buyers that were priced out of the market should chip in and help him out.

Posted by: Crownlfc at July 20, 2009 9:45 AM

i agree. he totally needs to set up a paypal account so we can donate.

*rob*

Posted by: PitbullNYC at July 20, 2009 9:46 AM

There is a pulse in Brooklyn Heights and Cobble Hill. Prices are lower than two years ago but things are selling.

Posted by: Minard Lafever at July 20, 2009 9:52 AM

The issue with the couple who cannot sell their apartment in Clinton Hill is really the story of the troubled housing market. They mad a profit because they were lucky not because they were smart. People reached beyond their means to buy residences lest they be left out of the real estate party. For investment purposes, the only way to make money is to take the long view (i.e. 20 to 30 years.) If you buy now, buy something you love and remember the old mantra...location, location, location.

Posted by: BrooklynIsHome at July 20, 2009 10:04 AM

Thinking about the situation in a bit more detail:

The article said their profit on the Hells Kitchen apartment was three times their cost. ie $920k x 3/4 = $690k. They bought their Clinton Hill apartment for $600k in cash, leaving give or take $90k in the bank and (crucially) NO MORTGAGE.

So for the last 3 years they have not had any significant cash outflow and they are still maxed out on credit card debt?

Quite simply, they have been living it large for several years and that is now coming back to bite them. 3 potential solutions:

1) Give up the job, move back to Brooklyn. With no accommodation expense, he can bag groceries and still have money left at the end of the month.

2) Sell the apartment for whatever he can get for it. Will help with his cashflow situation but ignores the fact that they are spending more than they are bringing in.

3) Take out a mortgage on the apartment. Helps with cashflow, and provides upside on valuation if he still believes in the gentrification. But they are still SPENDING MORE THAN THEY MAKE.

My violin remains firmly in its case.

Posted by: the chicken at July 20, 2009 10:09 AM

"There is a pulse in Brooklyn Heights and Cobble Hill. Prices are lower than two years ago but things are selling."

Not sure what your point is theres transactions in all locales. Whats clear is each transaction going lower and lower. Whats the top end BH at? -25% so far?

Posted by: cornerbodega at July 20, 2009 10:09 AM

I'm actually surprised how hard it is to rent out apartments now. I know people who are trying to rent out apartments at what I thought was reasonable- but now almost all apartments are no-fee so there are just too many to choose from. I've never heard of "negotiating" rent in NY. A few years ago, you either came with your first/last/security/brokers fee all in hand- all in certified checks- or you were out of luck.

Posted by: panda10 at July 20, 2009 10:12 AM

Not much sympathy for the two main couples in this. As has been pointed out, couple #1 is already sitting on a huge profit from their previous place. On couple #2 - if I read right they were thinking of putting their baby in a closet because their cat 'needs' its own bedroom?!
The young pregnant woman selling in BH came across as pleasant, though. Good luck to her.

Posted by: etson at July 20, 2009 10:13 AM

I hate being pissed off on a Sunday morning, and that article pissed me off. I thought maybe they could have chosen someone sympathetic to profile, someone to put a human face on the plight of owners in a declining real estate market.

Instead, they just left me thinking, "These are the idiots who inflated the real estate bubble and have cost me time, money, and grief. Bankruptcy is too good for them".

I actually stopped reading when I got to the part about how the one couple needed a separate bedroom for their cat...

Posted by: northsloperenter at July 20, 2009 10:13 AM

Why does the article focus on the Rogers "plight"? Its ridiculous. They were asking for 15% ABOVE their peak purchase price THIS SPRING with the recession in full blown mode. They deserve a slap instead of sympathy...

Posted by: cornerbodega at July 20, 2009 10:16 AM

"I've never heard of "negotiating" rent in NY. A few years ago, you either came with your first/last/security/brokers fee all in hand- all in certified checks- or you were out of luck."

Have you been in the city long??

Hell, I negotiated when I moved in 2007 (11.5 month lease instead of 12 month lease so I didn't have to pay on 2 apartments at the same time for an entire month -- basically 4% off).

Oh, and as someone who will be renting an apartment sometime in the next 2 months, I can tell you what I'm expecting:

1. The apartment is great
or
2. The apartment is cheap

And even for the great places, I'm expecting prices to be 5-15% below 2007 prices (when I last looked for an apt.).

Posted by: northsloperenter at July 20, 2009 10:25 AM

> putting their baby in a closet because their cat 'needs' its own bedroom?!

Wow, this is a whole new flavor of douchebaggery!

Posted by: DitmasSnark at July 20, 2009 10:35 AM

Actually, I might hate these people even more: "Days away from the birth of their first child, the couple are living in a newly purchased five-bedroom house."

Posted by: DitmasSnark at July 20, 2009 10:41 AM

Posted by: cornerbodega at July 20, 2009 10:16 AM

Headline in tomorrow's Post: DIBS and cornerbodega agree on something

Posted by: daveinbedstuy at July 20, 2009 10:44 AM

It was not that long ago that finding a real 2 bedroom in BH for <$1MM was tough; there were few available and they were all pricey. Now there are at least 20 on the NYT site -- and some nice ones too. The surplus of new condos is startign to effect even "prime" areas.

Posted by: BH76 at July 20, 2009 10:51 AM

NSR - agreed on all your points

Posted by: gemini10 at July 20, 2009 11:45 AM

These people are ridiculous! Rejecting offers, blowing profit from previous sales...I don't even want to think about the cat couple. The BH mother to be seems to have a level head on her shoulders and I wish them luck.

I do feel for the newlyweds. As a newlywed in a similar situation I'm hoping my co-op doesn't linger too long. It's just gone on the market this month and I'm hopeful but nervous.

Posted by: kissera at July 20, 2009 11:51 AM

Brownstoner - why not update the thread with a link to the "Clinton Hill" listing?

http://tinyurl.com/m9r37l

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 11:56 AM

My review of the piece...

"The world has changed"

ROTFLMMFAO!

"I used what I called the Starbucks index"

I use what I call the Case-Killa Index.

"He has been using credit cards to finance part of his new life abroad."

Oh Lord.

"His wife, Gillian, says she too feels the strain, especially living in a city where hamburgers can cost $45 and her son’s back-to-school clothes cost three or four times more than back home."

Now why TF did this guy take a job in a high cost living environment and not negotiate compensation accordingly? Back-to-school clothes? Better find that Swiss Goodwill.

"When it became clear that they would have to tap into equity, the Rogerses decided in August to put the apartment up for sale."

Excellent timing.

"I just need to find an itty-bitty changing table"

No, you need to plop down the crumbsnatcher on the bed.

"an exceptionally vocal Bengal cat that must be sequestered in its own bedroom at night if the humans are to sleep"

Fuck that! Get rid of that allycat. Where the fuck are your priorities?

"the building, which has been LEED certified"

Ohhhhh...LEED! That's gotta be worth half the list price right there! [when is this 'green' shit gonna end?]

"They listed it in May for $1.1 million, and have had one low-ball offer, which they rejected."

Oh come on! Don't be shy! What was the "low" ball? In hindsight, it's gonna be a high-ball.

"She owns her place and he rents"

She married well!

"It was a decision for me to pick quality of life and happiness over making a lot of money. It just is what it is and there’s nothing I can really do to change it.”

Uh...um...back to your property please [we don't really care about your quarter/mid life crisis].

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 12:05 PM

Yo BHO What's Cracking Bruh!!!

I'm Reenforcing my Bunker with Extra Duty Radiation Blast Panels!

The funny thing is the Retards are still in denial...

You are witnessing the collapse of the Mutant Asset Bubble!

The What (Buh Bye retards! Thanks for the Good Times...)

Someday this war is gonna end...

Posted by: Return of The What at July 20, 2009 12:12 PM

Cry me a river.

I'm surprised that no one pounced on the fact that their Swiss apartment is even bigger than the 2500 square feet they're trying to unload here.

Thanks for the link, BHO: http://tinyurl.com/m9r37l it looks like the right listing. That would be a block of Kent that dead ends at the projects. I know this block primarily as the place that the teenagers who mugged me a few weeks back took my shit to rifle through it. I just can't fathom why people wouldn't be swarming to pay more than half a million dollars for a condo right there.

(Anyone buy a Cowon iAudio on the street recently? Perhaps a Samsung AT&T phone?)

Posted by: serpentor at July 20, 2009 12:13 PM

I's quite apparent the What = BHO from these two posts.

Posted by: daveinbedstuy at July 20, 2009 12:15 PM

Guys/gals,

Do not try this "HOLD ON" techique at home. I-beams hurt. This "accidental" seller syndrome comes with the territory of a collapse. Especially when the whole economy was wrapped around housing [well, still is - 180 degrees in the other direction, however, i.e. South]. The very Ponzi/Madoff effect of your home price appreciation also funded your income, albeit implicitly through tax revenue and consumer spending.

Look at your higest bank-approved bid and take it on the chin if you should be so lucky to not have that deal fall through.

The game of queezing out a net gain is over. Minimizing loss is the new order.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 12:16 PM

"Yo BHO What's Cracking Bruh!!!"

Ahh yeah! Boy's back!

"a four-bedroom, 2,000-square-foot condo in Clinton Hill"

Liar liar pants on fire... http://tinyurl.com/m9r37l ...this Fedders extravaganza is in Stuy baby! A full block beyond Classon in the confines of the notorious LG (and the notorious 88th) - undisputable. No wonder they can't get anybody besides Pratt students. $0.599M?! ROTFLMMFAO!

"I's quite apparent the What = BHO from these two posts."

Well, you gotta write SOMETHING. Can't say shit about the MAB shrapnel lacerating your face [you won't feel the I-beam].

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 12:26 PM

"Well, you gotta write SOMETHING. Can't say sh*t about the MAB shrapnel lacerating your face [you won't feel the I-beam]."

Oh ROTFLMMFAO! Dave P0WN3D!

You know something? This Fall is going to be very painful! The look on the delusional Retards faces is going to be priceless. You notice I don't have to say anything, Mainstream Media is running with the ball now...

The What (MAB shrapnel! LMMFAO)

Someday this war is gonna end...

Posted by: Return of The What at July 20, 2009 12:32 PM

I thought the retards were on mute????

Posted by: daveinbedstuy at July 20, 2009 12:36 PM

Wow. I thought BHO's first post was the What.

Posted by: CarrollGardened at July 20, 2009 1:14 PM

Ditto on the couple who moved to Switzerland.

The real estate bubble has been very good to them. They should calculate their overall return on NYC real estate investment over the last 10-15 years and then sit down and shut up. If they really have a cash flow problem, slash the price and sell. They will still be way ahead overall. Hard to feel a lot of pity for those sitting on 500k+ equity when so many people are suffering bankruptcy, unemployment, homelessness, etc.

Besides, if this couple had put all the proceeds from the earlier sale (mostly nontaxed, right?) into the stock market, they would've lost a lot more. But then no one writes sympathetic newspaper stories about employed people whose $500K stock portfolio has fallen to $400K.

Posted by: tasteslikechicken at July 20, 2009 1:27 PM

The Swiss couple is being very, very, very foolish.

As I posted over the weekend in the Forum, they should

1. Rent out the Clinton Hill apt for market rate. It costs them nothing.

2. Live as the Swiss do and downsize to a smaller apt that is within their means. I lived there for a summer and dual-income professional couples with two children live in two bedroom apts. Either the parents take the living room or the kids share a room. It's all very clean, neat, and upper middle class with nice Roche-Bobois furniture and all that. You would never know the living room is also a bedroom.

Posted by: mopar at July 20, 2009 1:49 PM

About the cat: Has anyone taken it to the dentist? It might have a cavity.

Posted by: mopar at July 20, 2009 1:54 PM

If they've been hiding assets in a UBS account, they're toast.

Posted by: daveinbedstuy at July 20, 2009 1:56 PM

A couple hundred K can go in a hurry. From the few paragraphs the Rogerses thought "real estate only goes up" and have been spending much more than they should/could. They're probably still on the plus side but it looks like the Mrs. might actually have to look for a job that pays LOL

Posted by: cornerbodega at July 20, 2009 2:07 PM

All they have to do to move that apt is throw in a week with the wife. She's hot!!!

Posted by: guest_poster at July 20, 2009 2:19 PM

"Rent out the Clinton Hill apt for market rate. It costs them nothing."

No way! They can't even find the tenants they want. It's right next to LG. It's gonna become an LG "annex" one day. Dump NOW! They still have equity (NOT! Maxed out cards, maxed out HELOC). So, minimize I-beam embedment.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 2:20 PM

BHO, you're nuts.

Posted by: mopar at July 20, 2009 2:25 PM

I know, mopar. It's the adrenaline from watching the crash.

***Bid half off peak comps***

Posted by: Brownstones Half Off at July 20, 2009 2:26 PM

The Rogerses should never have agreed to talk to this reporter. The reporter makes it clear they are complete asses, for reasons detailed above, esp. their decision to live in an even bigger apartment in Geneva than their (2000sf) place in Brooklyn, and to furnish it with credit card debt! If they want to sell in Brooklyn, it's going to be at a loss. Buyers are not looking for 2006 prices, they are looking for 04 prices. Why not take what you can get in rent since you have virtually no carrying costs? But no, they're going to sell it and -- what? live off the proceeds? Then what?

Posted by: southbrooklyn at July 20, 2009 2:39 PM

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...

Posted by: Miss Muffett at July 20, 2009 2:56 PM

"Then what?"

Declare bankruptcy.

Posted by: northsloperenter at July 20, 2009 2:57 PM

MM -- exactly. Which is why the bottom is a ways off -- sellers still very much holding out against serious price cuts.

Posted by: southbrooklyn at July 20, 2009 3:04 PM

As always, it'll end in tears for many. Just human psychology...

Posted by: cornerbodega at July 20, 2009 3:26 PM

"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***

Posted by: Brownstones Half Off at July 20, 2009 4:39 PM

I wonder if the rogers couple is related to the writer. . .

Posted by: ontheparkway at July 20, 2009 4:48 PM

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.

Posted by: Heather at July 20, 2009 7:02 PM

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.

Posted by: panda10 at July 21, 2009 1:27 PM

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.

Posted by: Crownlfc at July 23, 2009 1:11 AM

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July 20, 2009

It Pretty Much Sucks to be a Seller Right Now

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