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There's no denying it -LI is expensive; houses, taxes, utilities, basic goods & services, yadayada. Unfortunately, one of LI's selling points that has, in the past, made LI so attractive is now working against it. That 'its a great value for the price' exclusivity/diamond in a coal mine mystique still holds true, yet the affordability bar has moved much higher, general wages have not kept up, and so the locally available field of economically viable potential buyers that LI's conditions appeal to is narrowing. Luxury and High end sales seem to be largely unaffected by the current economic downturn but, that is a rather small market considering the overall population pool. Curse and a blessing.
Before anyone here is offended, I'm not knocking LI. Although i am currently considering relocating off the island, I'm here more than 40 years now. And while its been a constant struggle, it hasn't been a completely negative experience. It is a fantastic environment to live within. The caveat being: if you can afford it and if LI's conditions and environment appeal to you.
It is worth what it is worth. SELLERS have to learn that the back-story is irrelevant. That goes for "I need to clear..." or "I won't accept less than..." If a seller needs to clear more than a the market warrants, then the broker should turn down the listing.
This is a good point. I have turned down many listings in this market for this reason. If a home seller is unrealistic it is not worth it to spend my time and money trying to sell their home.
The flip side of this is also true. There are many buyers out there right now throwing around unrealisticly lowball offers that don't have a chance of getting accepted. I refuse to work with these people, too.
Ok...fair enough...but there are TONS of buyers sitting on the fence right now and most dont have a "gun to their heads"........thus.....that is why it is the buyers that have to do the research to protect their interests in a market where most homes are so over-valued by their current owners that its not even funny....(read posts on this thread).
The "value" homes on LI (value based on list price in line with "rational" buyer fundamentals) are few and far between still and generally need about $100k in repairs/updates within a year or two upon move in. Add that bill to potentially overpaying through the nose on purchase + tax bills + utilities + commute + rising interest rates and you have the perfect storm of RE gridlock for first-time buyers and the middle of the market.
Good point. Think about some of these" on the fence" people. Some of them were priced out of the market for years. Some have even told me that they basically gave up on home ownership. Now, they are back in the game. I'm sure they are very nervious but I think they want to buy and not to let the opportunity pass them by. Just a thought....
http://www.nytimes.com/2008/08/01/sc...muscle.html?hp
“To workers, it’s a recession,” John Lonski, the chief economist at Moody’s Investor Service, said. “And really what matters in the end is what’s taking place in payrolls and the unemployment rate, and they’re both moving in the direction of a labor market recession. How can you argue with that?”
http://www.nytimes.com/2008/08/01/sc...muscle.html?hp
“To workers, it’s a recession,†John Lonski, the chief economist at Moody’s Investor Service, said. “And really what matters in the end is what’s taking place in payrolls and the unemployment rate, and they’re both moving in the direction of a labor market recession. How can you argue with that?â€
True.....I am amazed however that, with all of these negative pressures on the economy and the nation, its as resilent as it has been. Question is how much more can it take.
http://www.nytimes.com/2008/08/01/sc...muscle.html?hp
“To workers, it’s a recession,†John Lonski, the chief economist at Moody’s Investor Service, said. “And really what matters in the end is what’s taking place in payrolls and the unemployment rate, and they’re both moving in the direction of a labor market recession. How can you argue with that?â€
A very interesting and informative report which i'm fairly certain has been referred to before, yet it sums up the wages question(s) nicely:
Quote:
How are we doing?
Average pay per employee on Long Island increased 6% from 1998 to 2007 compared to the US which rose 15%. This shows that the US income has grown much faster than Long Island’s.
Between 2000 and 2006, the inflation-adjusted average pay per employee was stagnant; between 2006 and 2007, pay per employee rose 3% .
If a home seller is unrealistic it is not worth it to spend my time and money trying to sell their home.
What about a seller who bought, say, 4 or 5 years ago at the top of the market, put a lot of $ into upgrading, and now has to sell because of personal circumstances or a job transfer? In order to break even, they may have to at least start by listing their house over-market. We actually are looking at one of those right now. We know what they paid for the house 4 years ago, and we also know, by comparing the Sold listing to the current one, exactly what upgrades they did and have a pretty good idea of what those upgrades cost them. Taking those two factors into consideration, their asking price is really only about $20K over what they're into the house for, BUT it is also about 50K over market for that house in that neighborhood. If a seller in that situation came to you for a listing, would that be a listing that you'd prefer to stay away from (because it's kind of a no-win situation) or would you take it and if so, what would your advice to the sellers re: pricing be? p.s. In the case of this house, if it sold at their apparant break-even price they'd be paying their listing realtor at least $22K in commission.... so they'd be losing money at that number.
What about a seller who bought, say, 4 or 5 years ago at the top of the market, put a lot of $ into upgrading, and now has to sell because of personal circumstances or a job transfer? In order to break even, they may have to at least start by listing their house over-market. We actually are looking at one of those right now. We know what they paid for the house 4 years ago, and we also know, by comparing the Sold listing to the current one, exactly what upgrades they did and have a pretty good idea of what those upgrades cost them. Taking those two factors into consideration, their asking price is really only about $20K over what they're into the house for, BUT it is also about 50K over market for that house in that neighborhood. If a seller in that situation came to you for a listing, would that be a listing that you'd prefer to stay away from (because it's kind of a no-win situation) or would you take it and if so, what would your advice to the sellers re: pricing be? p.s. In the case of this house, if it sold at their apparant break-even price they'd be paying their listing realtor at least $22K in commission.... so they'd be losing money at that number.
Why is it so difficult for some people to understand that you can loss money by investing in real estate? In fact, since the recent "owners" are so highly leveraged, they can loss a lot! Buy high does not entitle you to sell high. The current market condition dictates what the asset is worth, not by how much the seller paid previously. If they don't want to take a loss, they can hold and wait for the market condition to improve. If they want to sell today, they have to price it according to today's market condition or it will just be a waste of time.
What about a seller who bought, say, 4 or 5 years ago at the top of the market, put a lot of $ into upgrading, and now has to sell because of personal circumstances or a job transfer? In order to break even, they may have to at least start by listing their house over-market. We actually are looking at one of those right now. We know what they paid for the house 4 years ago, and we also know, by comparing the Sold listing to the current one, exactly what upgrades they did and have a pretty good idea of what those upgrades cost them. Taking those two factors into consideration, their asking price is really only about $20K over what they're into the house for, BUT it is also about 50K over market for that house in that neighborhood. If a seller in that situation came to you for a listing, would that be a listing that you'd prefer to stay away from (because it's kind of a no-win situation) or would you take it and if so, what would your advice to the sellers re: pricing be? p.s. In the case of this house, if it sold at their apparant break-even price they'd be paying their listing realtor at least $22K in commission.... so they'd be losing money at that number.
Are we talking 50K overpriced on a $400,000 home or on a million dollar home? If it's the former, I would probably not be a good match for them because they would be extremely overpriced. It's unfortunate, but someone like that who bought just a few years ago is probably going to lose money by selling in today's market.
Most people list their house starting a little high, just to see if maybe they get lucky. But people who way overprice are simply not going to get their home sold.
Are we talking 50K overpriced on a $400,000 home or on a million dollar home? If it's the former, I would probably not be a good match for them because they would be extremely overpriced. It's unfortunate, but someone like that who bought just a few years ago is probably going to lose money by selling in today's market.
Most people list their house starting a little high, just to see if maybe they get lucky. But people who way overprice are simply not going to get their home sold.
Tom,
Good buyers today (responsible ones, thought-full ones) like totallyfrazeled and moi (lol) are too saaavy now! I am sure totallyfrazzled is using the same web tools (propertyshark, google, etc etc) as the rest of us are. We know the pricing history, we can crunch our own realistic comps down to the square foot, we know the most current sale prices in the area, we can tell what upgrades have or have not been made, etc etc etc. Heck, we are training ourselves to someday be REA's in actuality if we so desire.
Its not just the people who you say "way overprice" arent going to sell, its also the people "minimally overpriced" that are going to have a hard time selling if they continue to be unrealistic and stubborn. And one of the earlier posters on this thread falls into this category (hi Andrea )
Sellers and REA's no longer can weave an "unvarnished" story about how their price and their house stack up to realistic market levels - - many buyers know just as much -- if not more that allows them to bargain hard (with realistic low-ball offers)- - - or simply take their time and walk away to the next if need be.
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