I’ll selling my rental unit. The real estate market is getting very frothy. I talked with a realtor who just sold his rental unit in the same complex. Because of escalating clauses in the contracts, he got an extra 20% over an already high price. He has closed several other sales in the complex over the last few months, each time he had multiple competing offers and a contract in place within 2-3 days of listing. Most of the sales are cash sales to investors.
The agent has also just sold his personal residence - again for way more than list. He doesn’t know where he’ll go, but he says he’d be happy in a hotel for 6 months with all the extra cash he just got.
I figure, when the realtors are selling - that’s a market peak signal.
(I’m not selling my personal residence - but I do know other people who are cashing out now that their kids are raised and gone).
“if there is a competing offer, increase my offering price by $1,000 over the highest competing offer up to $xxx,xxx”. When 2 or more competing contracts have these escalating clauses, the seller rides it to the highest xxx,xxx of the multiple competing offers. It’s a good time to be a seller.
I’d be shocked if realtors are any better at timing the real estate market than portfolio managers are at timing the stock market. They just do the same thing as the rest of us - look at the chart of historical prices and think they see a pattern.
hmmm, i’m not sure if that’s a thing in manhattan based on my sister’s recently accepted offer. seems to not be in the best interest of sellers for them to agree to it. if it was a thing, she would have done it rather than just blindly take a stab at what the highest offer was, which made her go to over 100k above asking. I told her to go 100K above asking cause I liked the apartment a lot and it has been like a year since she started looking, had made several offers and got outbid and lost several offers. i was exhausted by the process and wanted her to find something already and I loved this place. hopefully I didn’t steer her wrong. she’s paying more for this place than this line has ever gone for in the building before. I was shocked she listened to me. inventory in the area she was looking to move is painfully low and anything good goes super fast for over asking.
Also in manhattan, you have to make yourself stand out by either paying all cash or giving a non-contingent offer.
i’m confused. these institutions are renting out houses they buy? i don’t think this would be the case for co-ops in manhattan because you can’t typically rent those out long-term. it likely is more the case for condos. the real estate market is hot in certain areas of manhattan. i don’t think it is for my area though.
I fully agree that it’s a better time to sell now than it was a year ago. But you can’t take that information to conclude that it’s a better time to sell now than it will be next year. It’s possible that it is though. I’m not taking a position on it.
Bulls make money. Bears make money. Hogs get slaughtered. I’m very happy with the current prices.
There’s a vacant house next door to me. Zillow bought it last July. They paid 20% over an already high list price. They spent some money re-finishing. They listed it and nobody bought it. Then some other investor group bought it a little below what Zillow paid. This next investor group completely gutted all of the floors, redid kitchen cabinets and counter tops, bathroom vanities, drove a Bobcat around and redid a lot of landscaping. The house still sits vacant.
Based on these anecdotal points, and everything else I’ve seen, I’m selling the investment place. I’m not trying to convince anyone to sell their stuff, but I’m happy to sell today.
This isn’t as common in the northeast. It’s more in warm weather states firms are buying/building houses and then renting them out as a way to make first homes more accessible to people (although they have no actual equity in “their” first home).
I really don’t know anything about the New York City market. That seems like a completely unique world with it’s own language, rules, laws and regulations. However, all-cash offers and waiving the inspection are always more attractive in any market.
The nice thing about escalating clauses, even if you receive multiple offers but only one offer has an escalating clause, you know that person’s highest offer. You can counter the other offers with that figure.
Our old “go away and don’t talk to us” for those saying we’ll buy your house in cash was $500k (more than 2x what our house sold for in 2005 (we bought in 2011), and was still $150k above the zillow estimate at the end of 2020).
We have to raise the number before someone says “okay let’s go”.
A couple of our friends just bought their first home, a smaller house than ours by about 800sf and a bedroom, for 3x what we paid for ours.
I hope there is a flattening instead of a burst. I want my kids to be able to afford a home someday, but I don’t want my friends and people like them to be raked over the coals for the timing of when they were finally able to buy.