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Have any house hunters gotten a feel for sellers in the Hamptons and if they have higher expectations for prices? NYC seems to have tightened up for the moment.
I am actively looking to buy. Seller expectations are very high, and what's worse, they are fueled by the brokers (many of whom are part-time real estate investors or flippers). However, of the 20 plus houses I looked at over the last two months not one has gone into contract. And inventory keeps climbing - at least for what I am looking for (3+ Beds south of hwy). I don't believe anything the brokers say so I am trusting my instincts and waiting.
funny....i showed this to my wife. she thought that i wrote this. i've had the exact same experience. mkt has at least 20% to go
it seems like most sellers can be more patient. many listings have been on the market forever - over a year - with little or no price movement. i think buyers can be more patient if they have successful summer rentals which can pay for much of the carrying cost of a house, depending on how much debt an owner carries. this is especially true since annual taxes tend to be modest. inventory is massive, so if an owner wants or needs to move a place, the cuts would have to be pretty real (depending on the how high the ask is).
Keep the faith Rodick Keep those CHOPS a coming IF Lkgsoh right These Brokers should be stripped of their liscenses and their ASSets!!
I notice that many sellers have the same mentally that if they don't sell they will rent. Meanwhile, 2009 was one of the worst rental markets ever, and 2010 won't be better for sure. Also there will be twice as much inventory on the market for 2010. You'll be able to rent for half of 2008 numbers. At some point the sellers will have to breakdown, as they realize carrying costs are not worth the hassle and/or rate of a summer rental. What fool is going to pay 2006 prices when the RE market is at 2003 levels???
I have also been looking for 3 beds+ south of highway and have found sellers a bit unmotivated. Most of the things I looked at have been listed for 6 months to >1 year. New sellers knowing that buyers are looking for price reductions have a new game -- they list way higher than reasonable and then cut the price very quickly, surely due in part to streeteasy - i.e. ability to search based on price cuts. This whole thing has become an annoying joke just so sellers can say "price has been reduced 30%"
I have been looking for a while and am a serious buyer, yet am becoming increasingly annoyed with the games Hamptons brokers play. Similar to the comment made by cfingliss, brokers have actually told me that sellers (sometimes at the broker's advice) are artificially inflating prices so they can tell buyers that they will accept a 30% discount. These games are insulting and have turned me off from trusting ANYONE or wanting to make an offer on a home. And if one more broker says to me, "You know, most brokers don't tell you the truth, but you can trust ME," I think I will just give up on the Hamptons completely. How totally unprofessional and pathetic o conduct business this way. Whatever happened to just telling the truth--- inventory is way up, many prospective buyers are unable to get financing, and the good old days of Hampons real estate going up, up, up are OVER, at least for a while. If everyone accepted this instead of burying their heads in the sand, acceptable deals could still be made. And realtors, stop sending us your stupid statistics indicating an improving sales trend when everyone knows statistics can be manipualted, and that is clearly what you're doing. You have no credibility these days.
NeedAdvice -- very well said!
i've been looking for almost two years. starting winter 2008, continuing during the crash last fall, and ever since. the game playing ive witnessed throughout has been awe inspiring.
as for NOW -- you need look no further than to corcoran, who put out bold faced lies in their 3rd qtr 2009 report. http://www.corcoran.com/guides/CorcoranReportQ3/CorcoranReport_EEQ32009.pdf
from page 1, which is all that gets picked up in the media, and which is an absolute lie: As detailed in this report, overall sales volume in the Hamptons has increased in the third quarter as compared to the same period last year.
same report, from page 4, which is buried, because it speaks the truth: A recent resurgence in the market has increased sales volume in the third quarter, but still not to the levels experienced in third quarter 2008.
lets be honsst: there's only one reason anyone would put a house on the market in this environment -- because they need to sell it for financial or personal reasons. unfortunately, hamptons brokers seem to be telling sellers only what they want to hear in terms of price. they do this in pursuit only of the listing, hoping to get it, to keep it, and then to have some other broker sell it somewhere down the line for them -- at whatever price the sellers ultimately agree to take.
that said, given all this time, and all this inventory, what i still don't understand is the number of sellers who remain completely deluded about the state of the market.
as for buyers, i believe the patient buyer will be rewarded. its just a bit shocking how patient we have to be!
NEED and WENDY Right on !! Sunclaus1 been screaming for months about coming price CHOPS and the nearly illegal behavior of the doggone East END brokers..They should be ashamed BUT their greed if fueled also by FEAR because their ASSets are ALL in (owners themselves) and their Income is DISSappearing COrcoran IS a Disgrace Period.. The SELLers are the Victims and the suckers because the failure of a Free Market to work will only make their SUFFERING LOnger AND Deeper
Eventually the rule of supply vs demand will win out. Seller intransigence coupled with new listings and buyer patience will cause prices to fall. Broker friends here in NYC have told me the summer was unusually busy but things have completely dried up again. The same is probably true for the East End. I am looking to buy here as well for a second home. But I will wait. However I am in contract for a condo in SoBe. Things have definitely bottomed there. Miami is in a complete state of seller/broker capitulation. Fear abounds so time to buy. Even my broker was in foreclosure on his condo! Capitulation will eventually come to the East End.
Part of the problem in getting facts out of Hamptons brokers is that they don't have current statistics. It takes 30 days (sometimes more) for the inefficient public records provided by Suffolk County to become public.
IF these broker/owners would allow their agents in the Hamptons to partake in the MLSLI, closings are REQUIRED to be entered immediately upon closing, so CURRENT data is a click away- no wait- ESSENTIAL in a market such as this, where declining values are considered by many economists to be an ongoing situation for a few years.
All of the larger brokers take advantage of membership everywhere...except the Hamptons.
While those U/C and closed #'s don't include such things as FSBO's, it gives a very accurate picture overall as to trends, and what's happening, as it happens- REQUIRED DATA INPUT AS IT HAPPENS.
The broker owners of the largest firms in the Hamptons do NOT WANT their properties (many, many under 1 million)listed, because another rule of MLSLI participation is that cooperation from other Realtors (outside the Hamptons) is required- all agents with buyers across Long Island would have simple access to homes for sale, data as required input, etc.- heaven forbid a buyer be able to use their agent of choice in a simple, straighforward manner. Ea$ier for the larger local brokerage$ to keep the area blanketed.
With respect to increased sales volume, at least on the North fork, under contract figures DO exceed those of 2008 over the last several months, but the eventual closed pricing is much lower over 2008- so, sellers (with current data in hand) "get it", as do the Realtors listing and selling properties out there.
Sites like HREO are fine as an ancillory listing service, but absent the REQUIRED data input of participants that an MLS FORCES, it's not going to provide a speedy and accurate picture for non-members. The larger brokers have figured out that their refusal to participate destroys the effectiveness of an MLS (but lines their pockets with more consistency). Just an opinion.
What they're doing out there is inexcusable, and it will likely take a legal angle to eliminate it.
The reason why more and more Buyers are fed up with the Hamptons agents is because the vast majority of them are mediocre order takers. They're not professional Realtors. Most have no clue how to properly price a home, and because they exist in an oligarchical system, they can get away with it. When competition soon penetrates, you'll see an exodus not seen since the Old Testament. The megalomania from the pseudo-sophisticated ones who make a few bucks will get put in check as well. Their time is up.
Sellers are delusional about the price of their house no matter what the region, but certainly, there's a sense of entitlement around the East End. Death, Divorce and Disease...and now over-leverage. The pain isn't over, but many houses in the glut aren't desperate.
Bottom line is that the market will eventually sort everything out.
As I have posted before - I am looking for 3 bed south of highway. I looked at about 20 houses - and really liked one in particular. It was listed for $2.7 which we thought too high. Seller said he would not go lower than $2.3. Last week I found out that in is in contract for $2.4. I am pretty shocked. My broker says she has 5 houses (all south) in contract right now - and when I researched the houses on her website - the prices are high, high and higher (of course I don't know the actual selling price). I agree that the inventory numbers are telling, but I am wondering if we prospective buyers are being overly optimistic? A lot of my peers are feeling good about the economy and are starting to spend big bucks again. I am wondering if and when I should abandon my dream of a south of the highway home for under $2 and start heading north...
See how your Peers feel if Stocks end their 8 month winning streak
Lkgsog, I had a very similar experience North of the Highway. Believe it or not, a bidding war erupted over a nothing special property, and I lost. I say screw this, and I may start looking in Garrison, New York or even Rhinebeck. I can see I'm being proced out in the Hamptons yet again.
total inventory per hreo as of today: 7623
2719 < $1m
2384 $1m- $2m
1105 $2M - $3m
total in contracts per hreo as of today: 285
128 < $1m
84 $1m - $2m
28 $2m - $3m
Accumulated psychological value of sunken cost?
If Wendy's stats are correct, then only approx. 3.75 percent of the market inventory sold/moved during an unspecified (one year?) period. Amazing.
I agree that the broker's are woefully misleading. The additional issues, not being factored into the asking prices are:
No available employment locally (buyers are second home owners,traditionally,)
Rising taxes to support ailing local gov't,
Getting an appraisal to come anywhere near 80 percent of asking prices; 10.9 NYC unemployment (banks are nervous')
And the tight mortgage market for even those w. decent credit.
I see NYC prices have stabilized, which is good. The ripple effect will spread east, though will be far slower than other comparable markets as many sellers have had more resources.
It is a GREAT illustration of the economic principal of sunken costs: ie "I put x$ into my old car, now it needs more work, I might not have decided to do the initial repairs if I'd only known it was going to cost even more--now the work I've done is almost equal to the value of the car!" So. . .as sellers carry big mortgages, maintenance, utilities going into the second winter they have their teeth grimly set and face the ego-busting conundrum of "holding out" or selling.
As soon as the first wave of low sales hits the housing stats from recorded deed sales it will initiate a domino effect. Just my thinking. . .Anyway, few "need" a house on the East End so it's much less sad to watch than markets like Michigan and Florida.
as of today per hreo, new listings since 10/1/09: 255
Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.
Sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million last month, from a downwardly revised pace of 5.1 million in August, the National Association of Realtors said Friday.
That pace was the strongest in two years and beat Wall Street forecasts. Sales had been expected to rise to an annual rate of 5.35 million, according to economists surveyed by Thomson Reuters.
"There's a mini-boom going on in the housing market," said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications, a research firm.
In other words, renters, keep on renting. Fence Sitters, look out for splinters. Wendyw, hop off the fence and sit on my. . .
hreo says 411 new listings 10/1/09 thru today.
Tiger, the Tax Credit is for families making 150K or less. I doubt that is anyone looking in the Hamptons for a second home. By February the Hamptons market will be down another 10% at least. Big bank pay structure has ruined this once flourishing market. Thank you Mr. Obama.
GoingDown 100% correct.. Im thinking 10% way too low OR the declines continue..I thank Obama too----ITS about time fat cats take a bath TIME for the NEW class like me to comeonin..Current owners are BIGtime losers BUT Youall LOve Capitalism Right? Even when you GOINGDOWN !!!
Nice use of grammar and syntax, sunclaus1. I guess you are the "NEW" class, indeed. For all you naive newbies, there are scores of folks who make under $150k on paper, who makes millions off the books.
In any case, it's clear here that minuscule group of contrarians are trying their damnedest to "will" the market down. Good luck.
If they make millions, why do they care about an 8k tax credit that they have to payback. That makes not sense. I can assure you that the 8k tax credit does not effect any part of the Hamptons that this board would care about. But we can all blame Obama for what will be considered a sin... owning a second home.
Tiger59, read legitimate sources with REAL Hamptons data, and decipher- it's out there for those who look.The Hamptons has been "nouveau riche" for YEARS- why should anyone pay more in a declining market when it's now about a value proposition? Get real.
Brokers Relieved by Rosy Market Reports
By Kate Maier
(10/29/2009) Market reports from leading real estate agencies reflect a turnaround in the third quarter of 2009. Strong increases in luxury sales have bolstered median prices and the total sales volume in some areas of the East End.
Reports released by Corcoran, Prudential, Town and Country, and Suffolk Research Service all noted gains in sales volume and median prices in most areas and agreed that, on a quarter-to-quarter basis, there has certainly been significant improvement.
OK Tiger heres your big chance CAN one buy a 5 bedroom 5 bath 3500 SQ FT 2006 construction in Wainscott for just (ask) $1.1 Million ?? Youre thinkin that a joke.right? No way jose right?
Ok Then investigate : 13 DEBRAS WAY Let us all know if the big CHOP has arrived !!
(Youre 3 properties dont look so good ..huh)
There is NO data supporting any type of upside bounce in the RE market for homes valued at $250,000 and higher. Sad but true, but the reporting agencies are clearly using numbers to mislead and misrepresent. Let's face it, selling 0 homes one quarter, and then selling 1 home in the next quarter does not mean sales are up 100%. Buyer are too savvy to fall for data controlled by the RE agencies.
This Thursday 11/5 same store sales numbers come out, and the market will fall another 300-400 hundred points with in a few days, thus sparking sellers to re-think 20% off ask offers they refused. This will be a fun month for buyer to watch, as prices begin to fall to more realistic and in-line numbers.
I agree with Going Down ..Stoxx performance is crucial for sentiment Dont forget JOB LOSS numbers coming in Friday.. Tiger be joining the Sellers Line with tears..Keep eye out for WAVE OF SHORT SELLERS
My thoughts on the subject:
Yes, you can get a property at a big discount - if it is undesirable (outdated house, no land, no pool, bad location, etc) E.g. Debra's way that sunclaus1 mentioned is practically sitting on top of railroad tracks AND has no pool. You can pay me money and I wouldn't want it. Also, houses that sellers were listing at $2.5M+ in 2007 are selling at 30-40-50% off. However, my feeling is the attractive properties in the low $1M and below range will not be discounted too much. I think that's the price range where most of the action has been taking place recently. Just think of it - if you get a $900K house with 20% down, your mortgage at 5% will cost you $36K/year. Adjust for tax deduction, and the real cost of interest is $23.5K a year (at 35% marginal tax rate.) So even if something happens and you need the money, you can rent at $25K/summer (that people we getting for north of the highway properties last year), and cover your interest cost. And in a good year, you will get much more than $25K.
Of course, the question is whether there will be any price appreciation - I wouldn't count on that. At least for a few years. But if you simply love the area and were spending most of the summers there anyway, and can find a place you really like, it makes sense to buy. There may be more price drops, I am sure of it, but they wont be universal. Good properties at a reasonable price will be bid on (and have been getting bids.)
boxer1 - rental income is taxed, so you need more like $40k to get you after tax cash needed to pay mortgage
if you choose to report your rental income (which, in my experience rarely happened before - most owners of summer houses that we rented asked for a cashier's check or cash, for a portion of the payment or a full amount.) Not encouraging anyone to evade taxes, but that's what happened. Else, to cover your mortgage, the rental income would need to be equal to your interest cost without tax deduction - 36K in this case. Still, it seems like a decent option to lower the cost of your mortgage if you don't feel like spending a summer there. To me, own vs. rent makes sense out East (and absolutely doesn't in NYC.)
hreo says 550+ brand new listings since 10/1/09. (it actually says 564 new listings, but there are a few duplicates in there) that's more than double the new listings on hreo as of just two weeks ago (when new listings since 10/1/09 stood at 255). wow.
The real question is why all you rocket scientists on the fence didn't buy the good stuff in 1990s, with all cash and no mortgage. If I was able to do it, where you ou guys when the waterfront stuff was so cheap???
My guess Tiger is that most of us were still in high school. Or just getting ready to go out into the real world and start making real money. Missed the good stuff on the cheap... But you were around - why didnt you get yourself a nice big pad in SOHO/Meatpacking/East Village in the early 90s?
Boxer1, I actually bought two of those. But I avoided Soho/Meatpacking/East Village as you suggest. (THANK GOD) I bought two large prewar apartments in low-maintenance buildings on Fifth Avenue and Tenth Street. Still enjoying them as we speak. But kudos for the insightful inquiry; wish I had purchased more of them. Those big old prewars were trading for $250,000 in the early nineties.
By the way, did you read this? It was in Crain's just recently.
Originally Published: October 22, 2009 5:59 AM
Modified: October 22, 2009 9:35 AM
Hamptons real estate is suddenly sunnier
Sales jumped 50% in third quarter as prices fell 2.4%, signaling that the sharp declines in home values may be close to ending.
A release of pent-up demand in the Long Island enclave boosted home sales in the third quarter.
Where : New York; Long Island; Suffolk; Hamptons
Home sales in the Hamptons%u2014Long Island's beach oasis for the rich and famous%u2014are making a comeback. Sales rose 32% during the third quarter from the same time last year, according to report released Thursday.
PS: Boxer - were you in high school in the 1990s?
Looks like Tiger Owns everywhere Hmm.Hey Tiger you Underwater in Las Vegas,Florida and Arizona ??
No. I think I'll leave those investments to you and your family. Pool, bitter renters. . . :(
So you WERE one of those sharks scouting for deals in the 90s - why so much bitterness towards others on the board doing the same now? Especially as you claim you may have clocked 10x returns? Just a little odd - usually the losers are the bitter ones...
As to the sales jumping - could be a real thing or a dead cat bounce. It likely if you look at FL, CA, etc, there must have been periods when sales jumped and prices seem to stabilize for a short term. Besides, as far as I am aware, whatever sales are being recorded in the Hamptons are 10-50% off asking - so the 2.4% increase in prices you cited sounds like a case of bad data.
Boxer1: you are a true naif.
There is vitriolic disdain and borderline hatred for anyone who has confessed to being an owner here. Lots of bitterness and resentment leading to hopeful statements about forced sales, loss of assets, mounting debt and pain. I've merely taken the position that this ain't gonna happen; rather, karma will prevail and you vultures circulating the dead animals will presumably lose out again (or at the very least, get E Coli.)
Eat hearty, boys.
hreo says 675 new listings since 10/1/09 (actually it says 682, but there are some duplicates). thats 125 new listings in the past 6 days alone (when new listings stood at 550 ). with this kind of inventory build up so far in the 3rd quarter, does anyone think we'll see 1200 new listings by quarters end? or will things taper off after thanksgiving? and what about january and february? predictions please!
while many homeowners out east no doubt have the wherewithall to ride out bad times, it also strikes me that there is a population out there that does not. it seems that the day of reckoning for those who get really stretched will be in the 2010 - 2011 timeframe when homes that were financed via 5 year option ARMs will get reset. at this time, payments for homeowners will either increase significantly or they will have to bring hundreds of thousands of dollars to the table to refinance. does anyone know where statistics that indicate what types of loans and how many were taken out using 5 yr. option ARMs can be obtained?
Good news and bad news for us buyers: November 12, 2009: S&P/Case-Shiller says home prices still falling, albeit at a slower pace.
jrnonlinere, it's not pretty:
And, a current look, with an interesting perspective above.
November 12, 2009: http://www.reuters.com/article/marketsNews/idUSN1220944420091112
I would think come March available Hamptons homes will increase by 50%. The below represents home, image what that number is on second homes. If someone has that data please share (especially before I make the mistake of putting in an offer). I mean there is just NO demand for Hampton homes.
"Purchase applications slid 11.7 percent in the week to 220.9, the lowest reading since December 2000.
"The purchase market is muddling along," with unemployment at a 26-1/2-year high of 10.2 percent and mortgage credit still difficult to obtain, said Melissa Cohn, president of The Manhattan Mortgage Company.
Looming large are some massive government incentives that have been extended until the middle of next year."
The Home Buyer Tax credit has ZERO impact in East End market ..Going Down should review predictions of 30 yr. mortgage RISING in 2010 to 5.8% (Obviously higher still for jumbos)
Rising to 5.8%? Seriously money is still cheap. Last time there was a housing crisis such as this one was 80's and money was 15% and more to borrow. I was NOT talking mortgage rates though... I was talking about inventory. 5/1 Arms are in need of restructures and money and demand has dried up out east.
Come March I do believe 850K will get you what 1Mil will get you right now as of NOV. 14, 2009. I have been out looking every weekend since September and not only is inventory piling up but we are getting emailed daily about price drops..."the seller is now willing to take X". All of these listing prices on StreetEast and everywhere else are total BS, dreams of what the owner's are praying some sucker will give them, all led by the AGENTS that are giving the sellers false hope.
Sellers trust agents to put a fair market value on a home, and currently agents are failing to do their jobs.
eea: thanks for the data - lots of it! varying viewpoints on things. based on your personal experience, do you have any feel for the impact the ARMs will have on the market out there? on a related matter, spoke to a friend who owns out there who expects things to get real bad...feels that the commercial real estate bust coming to a city near you will impact owners of hampton's properties in a big way. thoughts?
See what happens when you turn down a good offer in September: http://www.streeteasy.com/hamptons/sale/181944-house-southampton
jronlinere, among immediate concerns would be the potential for strategic defaults- walking away from a second home that has lost value in an economic environment that isn't showing positive signs (I tend to get hung up on NY's unemployment rate) in order to keep the primary home afloat...but, it may be that I read too much. This market is unlike any in my 27 years, so am just on the roller coaster like everyone else...albeit with appraisal contingencies MANDATORY. Wouldn't buy without that, and a loan contingency. Too much going on.
The option arms are just one more complication in a very dicey market.
For those that want the lifestyle and can afford/are aware of a potential loss- do it. For those seeking security, wait it out to see HOW the cards fall. And, I could be completely wrong.
the latest count on sellers listing their homes: hreo says there have been 775 new listings so far this quarter. thats 100 more just since last week, when it stood at 675.
pricing breaks out on these new listings as follows:
less than $1M = 325
$1M - $2M = 221
$2m- $3M = 97
$3M - $5M = 62
and over $5M = 70.
also, hreo asys there are 8124 listings overall. there are definitely duplicates in there, but even if you deduct a generous 10% to accomodate duplicate listings, thats still a whopping 7312 properties for sale.
looking in sag harbor for a 4br house. when might i see a significanf fall in prices this area?
bayfisher, where in sag harbor are you looking? i saw a house that might be going into short sale and it was nice/new probably sell in the high $1m's, but it's in north haven. and i'm not an agent, i'm a buyer who hasn't found anything yet. my husband doesn't like north haven...
To all the people looking for a realistic seller, and a great location 5 minutes to Bridgehampton and Sag Harbor, check out my home
House 1. at www.31islandview.com. While I am not desperate I have reduced the price from 1,250,000 to 895,000 for a fast sale. I bought another home that I was renovating, and now it is done.. I don't need to carry a house I will never use again. This home generated over $40,000 in income last years. It could have a legal apt if it was your primary residence generating $1400 monthly or keep as a separate guest apt. I have given up on the brokers that just want to try and sell multimillion dollar homes, and ignore the under 1 million crowd, as a former broker I'll sell it myself..
It's a great deal all new inside 4 bedroom 5 baths pool and 3600 sq feet. If anyone wants to see it let me know.
Happy Real estate
Parrish... smart move to make the push now. I think come February this market is going to start to crack big time based on the number of brokers that have called me back to make an offer "any offer" on what I have seen thus far. Best of luck to you!
Looking over this old post. What are people's thoughts on the current state of the market, and how it compares to 12 months ago.
ekartash- I have been in the market to buy in the luxury market (3M-6M) and have been seriously combing the market with a fine tooth comb since last summer. I would say that I am pretty learned in water mill/bridgehampton/sagaponack SOH for an outsider through having done my thorough due diligence. In fact in the past week I have put out 2 offers on 2 different properties and have gotten some answers to our questions (or at least have made my own interpretations). That being said, before I give you my thoughts based on my answered offers I can tell you that just asking prices alone from this summer to last summer in the market I am looking in have jumped +/- 1M. Comparable houses to what I watched sell for $2.999M last summer when I was not quick enough to move on them are now being offered for $3.999M or more. I saw 1 house in Bridgehampton SOH ask 2.9M a few weeks ago and it went into contract very quickly other than that the remnants of 2.9M SOH are bleak. Sometime in the last 8 months or so I saw 1 other deal pop up in water mill SOH for 3.295M I called the listing broker 24 hours later and was told that the house just went into contract for the full asking price. Aside from the aforementioned, houses “priced to sell” where I am looking have become much more scarce. I am not sure if this type of trend is consistent with the whole Hamptons market (my guess is that houses priced under 1M and houses priced 10M+ both have totally different trends or if they are the same they aren't the same for the same reasons). All in all I have seen the “Fluff” thrown back into asking prices. (Whether that’s with broker’s help or if people’s confidence in the market has risen and battered ego’s have healed I’m still trying to figure out.)
Now I will share what I think I have learned from my offers that I have made this week and the answers to the offers that I was given. Some background- I posted a question a few days ago on streeteasy as to opinions on how much is acceptable to offer market conditions considered on an average luxury piece of real estate. I got back answers that I should have expected which were to the tune of USE COMPS and pick the brokers for info before making a formal offer. 1 property I offered on has been on the market for 15+ months (thanks streeteasy) with no offers and the broker whispered those magical words during the showing “make and offer they’re desperate.” And offer I did….25% off of the obviously grossly overpriced asking. Thinking confidently that I was going to be doing the seller a favor- I was answered from the seller who was obviously insulted with a 100K off asking response. The second property I am still in beginning negotiations so I don’t want to get into to much detail although I will say we are still far apart from a “meeting of the minds” but with that being said this house has also been on the market for getting close to a year and with many showings the broker said had not received an offer yet.
I have concluded that out east in the luxury market terms like “desperate” and “motivated” are extremely relative terms as opposed to 12 months ago. Now we are talking about people who for the most part are selling their “vacation” or their “second, third, fourth…” home many of which the land (which is where the majority of the value is) was purchased for peanuts back in the 80’s. There are no hefty mortgages held by these homeowners- so really how desperate can one be? 12 months ago when a seller was desperate; this was because they just got burned of their lifesavings by Madoff or one of the other handful of Ponzi schemers or they just lost a couple of zero’s on their brokerage account or even their job. These people have already long sold and vacated the Hamptons. Now I think that the state of the market is desperate if by desperate one means CONFIDENT. Call me bitter but if you ask me; by confident I would sass a seller with this aforementioned mentality and call them delusional. If your property has remained on the market for over a year with no offers- message to the sellers I may be a bit brazen, but I think the MARKET IS SPEAKING TO YOU!!!
These sellers need to check their egos at the door and realize that the economy hasn’t really improved much at all in the past 12 months. For all us buyers out there, beware of these over-confident sellers- DO NOT let them fool you into believing their property values have gone up a cool mill in the past 12 months. One thing I will add however is that
Sorry for the novel but I hope this can give anyone interested a good idea of what’s going on and hopefully for my sake spark some interesting dialogue that may help to better my house hunting.