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May 15, 2009
Anyone out there buying houses?
Is anyone out there buying houses in Brooklyn?
We have had our house on the market in Park Slope for almost 3 months now with A LOT of interest and a few offers(one offer which was low, but we were happy with almost went to contract but financing was the issue). But it seems to me the "buyers" who are out there either are scared, not really serious or are hoping to receive major discounts
However when I check around, I notice that none of the houses in prime nabes are selling or "flying off the shelves" and the only houses selling are the old junkers going for cheap!
Just posting to get some insight from other sellers and buyers and armchair quarterbacks....
It's a very frustrating time
Comments
When buyers have plenty time to decide like they do now they'll take that time. It's a major purchase. 3 months might not be long enough to wait. If you have lots of interest then your house seems it would be priced right. So it's a matter of just the right person coming along.
Posted by: traditionalmod at May 15, 2009 9:59 AM
As a maybe buyer, I can tell you that you're absolutely right about us "hoping to receive major discounts." Buyers are out there, but time is on our side. There's no incentive fir us to buy now unless we get a great deal.
Posted by: alsawo at May 15, 2009 11:44 AM
I agree 100% with alsawo. I think people are looking but just scared to buy in this market.
Posted by: Kensingtonian at May 15, 2009 11:55 AM
It's an interesting question. I look forward to hearing what others have to say.
The cheap, old junkers in Bushwick and Bed Stuy don't seem to be selling very quickly either. Maybe three have sold in the last six months, and they were on the market for a year or more. Others have also been on the market for a year or more and are still sitting there. Most everything seems to be in terrible shape, and little new seems to come on the market. There's not much for sale (well, not many two families. Plenty of three and up.) If anyone ever wanted to buy a commercial building, you can buy them for next to nothing.
I notice on this board that whenever anyone says they just bought a house, it always seems to be in Park Slope, Bed Stuy, or Bushwick. Of course, it's hardly a scientific sample.
Posted by: mopar at May 15, 2009 12:18 PM
My wife and I are serious buyers for a townhosue. We have 20% down for any reasonable place, 780+ credit ratings, etc. Don;t know your place obviously, but here's my take.
I've been bearish on housing for years b/c I saw what the Fed was doing, and here we are. NY is way behind the national curve in letdown. Buyers seem to think that if they bought a place 5 years ago, they are entitled to a 40 or 50% increase, when in all honesty, most places should probably sell at close to value in 2002-2004 levels.
Why? B/C the run-up was almost entirely fueled by invisible wealth, and the consumer's balance sheet is WAY worse than it was back then. As are the prospects for growth in the economy. Wages will be flat, unemployment up.
This BTW leads to less tax revenue and less servvices, which make NYC a less desirable place (though I will never leave).
In the end, the buyer controls the price, not the seller. We know what prices for properties have been historically, so it's easy to get a ssense of inherant value.
People are asking someone like myself, who avoided any debt and saved up a very large nest-egg specifically to buy a house to plunk down 300K as a down payment, which represents an enormous risk, when job projects are flat moving forward, and intrinsic value on properties is difficult at best.
I own my own business, my wife makes a decent living, and een w/ no debt and huge savings, we're having a hard time justifying buying a 1.6M property that will deplete much of our savings and put us on the hook for a very large monthly payment, even with a rental in it (and rental prices are being pressured, so every broker that says you can get 2K in rental is being optimistic).
Many sellers make these patently absurd reductions on 1.6+ Million dollar properties, as if that will do anything to create activity. A 25K cut on a 1.8M home, and now an offer to cover the 11K mansion tax. C'mon. Buyers need to wake up to the reality of where the market is headed, and more importantly, who can get financing.
Even w/ mid 6-figures in cash in the bank, perfect credit, and no debt, b/c I own my own business (10 years running), even I may be turned down. So where are the buyers?
Offers of 20-30% below asking are the only option, which buyers find insulting. So their palces sit, and then they price cut with a thousand small slices and watch the market erode further while they avoid the inevitable.
So I'm a VERY serious buyer. Have a little girl and we're running out of room. Dying to buy. But in all honesty, the value just ain't out there.
Posted by: MoneyForNothing at May 15, 2009 12:32 PM
Thanks all
It's interesting b/c I beleive pre-lehman and even a bit past Lehman into November we saw some decent Home Sales,but since Jan/Feb I am not witnessing the same sale activity.
MoneyForNothing - agreed on many of your points
I priced the house well on purpose and still received an offer that was 18% off my asking price - which we accepted and even gave some credits after the inspection.
I also had an offer that I was like "Um are you friggin kiddin me" - but I digress!
I also agree it's probably never in the best interest of the seller to just slice off $25K on a 1.7mil house. Those small price chops just show any buyer that you still aren't sure what the house price really should be.
Mopar - thanks - am in PS, have a 2 fam house and I agree on many of your points the houses that are available have been sitting for 6-9 months and then I notice they might go into contract - it's a bit scary truthfully.
Any Sellers out there want to weigh in on their experience thus far?
Posted by: gemini10 at May 15, 2009 12:51 PM
gemini - we want to sell also. we took our property off of the market b/c of the current environment and we are not desperate to sell. we can hold on for a few years. that is not ideal but it is the reality. i don't know your current situation so this advise might be mute but i would wait and hold. now is just not the time if you really don't need to sell.
Posted by: bkny at May 15, 2009 1:23 PM
for those "waiting to sell," which I totally understand, my macroeconomic perspective would be that this country has not dealt with inflation of any real kind for about 20 years since Volker broke it in 83.
The economic environment we're in now is a game changer. What the gov't is doing to prevent an all-out collapse is going to drive interest rates through the rough, lowering the value of homes. People are going to save more and spend less (finally). This does not strengthen home prices.
We have gotten way to used to an economy that sustained hgh growth and low inflation for a long time. It's idyllic for economic activity.
Too many forget what a lost decade like the 70's can mean to equities, real estate, and ultimately society.
It all bears on home prices ultimately.
Posted by: MoneyForNothing at May 15, 2009 1:34 PM
To Quote one of the numerous (and often ignorable) financial strategists:
"The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."
Posted by: MoneyForNothing at May 15, 2009 1:42 PM
This is the calm before the storm (like the calm that came before the frenzy, circa 90's). Capitulation will restore volume when it comes. The majority of sellers out there will hold out for much less later and regret it. They will chase comps into the ground (intrinsic value way down there there there somewhere somewhere somewhere).
***Bid half off peak comps***
Posted by: Brownstones Half Off at May 15, 2009 2:08 PM
moneyfornothing - that's a very interesting concept. with that perspective, i could see it not making sense to wait. the house i want to sell, i don't currently live in and i did not buy it at the height of the market, so truly even at these prices i would be making a nice profit. i am still willing to 'wait & see'. i know this may mean YEARS but i think it will benefit me in the long run. if i needed to sell for other reasons or wanted to move i would definetly heed your advise.
Posted by: bkny at May 15, 2009 2:23 PM
Thanks BKNY - I know there are many people out there who don't have to sell - we are sorta a mix of wanting and having to sell.
Sure, we can keep it - but at what cost? We pretty much work at jobs we hate to have this house in a swanky nabe and with no money in our pockets. We get by(barely, but it ain't livin'
I don't think any of us can really judge what the market will look like in 6 months or a 1 -2 years from now. I think if the job market and consumer confidence/spending don't increase we will have major issues in real estate - that's for sure
Posted by: gemini10 at May 15, 2009 2:26 PM
gemini - are you selling to downgrade? and move to a smaller place or different 'hood?
Posted by: bkny at May 15, 2009 3:23 PM
g10, we've been looking for over a yr already. made big low-ball offers (30%+ discount) on 3 houses - got beaten out each time by massive down payment (40% or more) or all-cash offers (even when the offer was slightly lower than ours). This is good example of seller going with buyer where financing risk is lowest among the choices but it also means the deeper pocket buyers are likely the ones squeezing for the bigger discount (ie knowing & leveraging their deep pockets). Those sellers had to sell hence the low-ball offers were viable. Given how econ is, we assume more owners will fall on hard times and have to sell & accept low-ball offers. If we're pressed for more space, we'll sell our current place and rent a bigger place. Until prices go up and we're convinced that it is a legit upward trend, we feel no urgency to buy.
Not the responses you want to hear but hope it gives you some perspective of serious buyers out there now.
Posted by: more4less at May 15, 2009 4:16 PM
M4L - That's what I have been thinking
so many people I know are former owners, now renting sitting on GOBS of cash just waiting to pounce
but there is no urgency but an abudance of patience on their part
you are right - I certainly don't want to hear the bad news(or the truth) but I remain optimistic
Bkny - looking to sell so we can do different things with our life and the cash will give us some options. We feel trapped owning the house as we dont make that much money in our current jobs.
Posted by: gemini10 at May 15, 2009 4:29 PM
For my part, I'm willing to pay high market price for the right property. I really wish some seller with a decent house would put it on the market.
Posted by: mopar at May 15, 2009 5:00 PM
Mopar - hahaha - where are you looking and what for?
Posted by: gemini10 at May 15, 2009 5:04 PM
Also, as noted yesterday, financing has created breakpoints in sales. Houses that require jumbo mortgages are more difficult to move than anything that can get a conforming loan.
Posted by: slick at May 15, 2009 5:15 PM
Agree with Slick above. The poster who said he is looking in the $1.5m range and expects to put 20% down is going to have a hard-to-impossible time in this market finding a lender who will do 80% LTV on that loan. Unfortunately it's more like 65%. Even if you have the equity you then have to sweat it out getting the appraisal to support the price (which was also discussed in the forum yesterday) - appraisers have few comps to go buy so they're arbitrarily slashing 10,15,20% off of whatever comps they do have to reflect weak market activity.
Posted by: NorthHeights at May 15, 2009 5:54 PM
Gemini, I'm looking for a two family in Bushwick. They run about $430,000 now. (Or as low as $250,000 with no plumbing.)
I would pay $520,000 for a place with most of the original details, three rooms deep, owner's duplex, three bedrooms over three bedrooms, backyard.
Trouble is, most of the places are four rooms deep (very dark and poky little rooms) and have been altered beyond recognition.
If it were a brick, it would have gone for $600,000 in June 2006. $520,000 isn't that bad, do you think?
It would have to appraise, of course, because I'd be taking out a mortgage. But I think it would pass.
Posted by: mopar at May 15, 2009 11:29 PM
I am looking to buy but there are many questions I ask. Now the numbers have to make sense for a bank to give you a loan. If you are collecting 60,000 dollars a year in rents what is the value of your Bronstone? If rents go down will the homeprice follow? What happenes if the cost of money starts to go up? You really think morgatge rates are going to stay at 4.5 for the next 40 years like our government has projected? sorry but I am still waiting for major discounts
Posted by: hannible at May 17, 2009 3:14 PM
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