Competition for apartments started to heat up about a month ago, and now the flames burn more intensely than ever as a result of withering inventory.
I went on Sunday to eight or nine open houses that had been listed on the Upper West Side in just the prior week, and they were mobbed. The only one that wasn’t packed in the first five minutes was a $279,000 studio remarkable only for how oppressive it was.
Worse for buyers, at least two of them had offers, including that studio. In some cases, there were multiple offers — even before those initial open houses.
Listing agents were running out of show sheets, prospective buyers were literally bumping into each other, there was a palpable sense of panic.
“Irrational exuberance,” one of the agents muttered none too originally but emphatically accurate.
We are not alone in that observation. Indeed, confirming that the housing market is galloping once again, the new Real Deal proclaims in a headline that bidding is “absolutely insane.”
Lord Keynes had a point.
A sellers’ market that is so robust is not a good thing, occasionally even for sellers. Continue reading
Borrowing funds to finance a home purchase goes way beyond monthly payments.
The process is analogous to death by a thousand cuts.
First, you have to pay an application fee. In other words, the money that the lender makes by charging loan interest just isn’t sufficient to cover the costs of assuring that you’ll make monthly payments on time. (We know how well those procedures worked looking at the number of loan defaults in recent years.)
Then you fork over money for the lender to check your credit.
Let’s not forget Continue reading
The last thing either buyer or seller wants to hear is that an appraisal fell below a property’s contract price.
If it has happened to you or someone you know, you probably would join my occasional chorus of contempt for the appraiser. And these days, with automated appraisals and out-of-town appraisers, the song we sing may well be justified.
However, an appraiser Ryan Lundquist has written a blog post that explains why a short appraisal in the face of what appears to be market value may be correct, even in the case of multiple bids.
In his post, he notes that “offers above asking price are Continue reading
HAVE A SAFE AND HAPPY HOLIDAY WEEK!
In a dense but revealing blog post of the National Association of Realtors (NAR), Jerome Nagy writes about the difficulty of establishing the value of a property in today’s market.
It is, he says, a common misconception that the price on which a seller and buyer agree is the value of an apartment, townhouse or single-family dwelling. He declares:
It has always been a challenge for appraisers to identify value and support their opinions of market trends where neighborhood prices are in a state of flux. Today, this challenge is more widespread than perhaps any other time in history as neighborhoods and markets that were previously declining are now stable if not recovering.
Difficulties arise when a market “bounces,” Nagy writes in his NAR blog post, going on to say that it can be impossible to Continue reading