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.
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…
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…
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.
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.
“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?
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.
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.
There is a pulse in Brooklyn Heights and Cobble Hill. Prices are lower than two years ago but things are selling.
i agree. he totally needs to set up a paypal account so we can donate.
*rob*