Westchester / Rockland real estate - How much under asking price? (Pearl River: wood floors, sales)

[Scott99999]

Hello,

My wife and I have been looking at houses in Westchester, Rockland and northern NJ. To be honest, anything in the $500-$600k range in an area with good schools & a good commute needs varying degrees of work - either serious renovation, or horrible 70s kitchens and bathrooms with pink tubs, wallpaper, new siding, etc... Even structural issues.

I've been doing my own (limited) analysis of sales vs. asking prices, and it looks like some houses are going for as much as $50k (5-10%) below asking, with an average of about $25k below.

That obviously changes the equation quite a bit, since it could bump buyers into the next class of home.

QUESTION: Does anyone have any experience or feedback on what offers are looking like these days compared to the asking price?


THANKS!

[havoc315]

There is no universal answer, it all depends on how accurately and aggressively the seller has set the price, which can be very hard to do in this market. Some sellers refuse to accept that their home value is 20-30% lower than 2 years ago, so they over-price. Others may have already adjusted their price.

For example, if you see 2 virtually identical houses in similar neighborhoods, in the same school district, but 1 house is priced at 600, and the other house is priced at 550......
The cheaper house may go for closer to asking, or even above asking.

But if you see a house you like that has been on the market for a while, there is no harm in a low ball offer.
In terms of homes needing work, keep in mind the difference between superficial cheap changes, and major changes. Some ugly wallpaper is a pretty easy thing to fix, while a leaky roof is a much bigger problem.

[Scott99999]

Thanks. I do understand that there's no perfect answer, but I'm sure there's a psychological (and even purposeful) difference between the asking price and purchase price on listings, even if you assume that no work needs to be done on the house.

And when I say wallpaper, I mean, some of the houses we've seen are gut-jobs when it comes to non-structural elements. People leaving nice wood floors covered by stained, smelly 70s-shag carpet. Pink tile everywhere, cracked plaster. We actually saw a house today with (what I think) was the world's first microwave oven from the 1960s - it had dials instead of buttons and was listed as a "Micro Wave" (two words). Forget about walking into a kitchen with "newer" appliances in these price ranges. No wonder people aren't buying.

I found another thread in the Trulia forums in which one of the real estate pros mentioned:

I recently did an analysis of all the homes that sold in the last 12 months in the Pearl River School District between $500K-$700K. The average decrease from asking to listing price was near 15%--(I took out 6 outliers). However, there were 3 homes that sold in 30 days 34 days and 34 days; all 3 sold for within 3%-5% of asking price. There were a few homes on the market for over 400 days--and these sold for a discount of more than 25% of asking price.

With all this talk of housing prices declining 15-20% nationwide, it's good to know where the local market is at...despite individual cases of variation.

I also found this post (http://rocklandcountyrealestate.com/rockland-real-estate-accurate-pricing-key-to-quick-sale/ - broken link) that suggests similar numbers in December:

Today’s buyers have a wealth of inventory to choose from. Therefore, we are seeing most offers come 5, 10 and sometimes 15% below asking. We are seeing a “reverse” from the seller’s market a few years ago where a buyer didn’t even dare ask the seller to fix one little thing. Today, sellers are now being forced to spend thousands on items that in the past would have been forgiven.

[havoc315]

In most good Westchester areas, that price range will certainly be fixer uppers.

In Rockland, you should be able to find something decent in that range. Not luxurious, but decent.

And yes, the more realistically a house is priced, the more likely it will sell faster.

But a good realtor will recommend listing price as close as possible to expected selling price. It is not as if realtors are recommending inflating asking prices by 5-10%. It's just a matter of difficulty making the evaluation in a sinking market, and sellers who aren't realistic.

That said, if your price range is up to 600, then I see no harm in looking at houses listed as high as 650.