Buyers who stalled their home search when school began are going to be shocked at recent prices.
In September, there were two sales of the larger 3,362sf floor plan; one was $1,869,000 and the other was $1,875,000 (both under list). So when this house came on at $1,895,000, it seemed about right.
It closed for $2,125,000:
Who the hell are buying these houses at these nosebleed levels???????????????
John – people that sold their houses at nosebleed levels. In my area of Leucadia, the realtor told me that 70% of everyone looking was from the Bay Area. Probably working remotely.
Bob: Come on now, no talking to other realtors.
John: It’s about 70% from the Bay Area.
Variables:
1. Their money must have come easily, because they are spending it like it fell out of the sky. Whether it’s big winnings from another real estate sale, inheritance, company or other asset sold, crypto, or just a pure gift from family, buyers are having no problem paying wildly over the comps or any other rational gauge.
2. They are acting very desperate, like this is the last house for sale on the planet. Either they think they are about to be priced out forever (which is a reasonable thought), or they have lost enough other bidding wars that they need to end their frustration here and now.
There is a sub-section of rational buyers that aren’t participating with this insanity. Once the frenzy ends, they will be left to sort it out with the sellers as to what homes are worth then. It would be around -10% or -20%, and then sellers will have to decide how bad they want to sell. Most won’t go for a big discount, and the Big Standoff will begin.
What about all the morons paying $5k to $20k+++ markups on new cars. The day of reckoning will come. I have plenty of patience to wait this out.
Bob, Think your tangle with your $$/sf metric is a challenge? Think how tough it is here:
You may have heard of Manhattan’s “BILLIONAIRE’S ROW”, a semi-BS marketing reference to 57th Street that has a small handful of super- expensive new condominium buildings like 157 West 57th Street, 432 Park Avenue and Central Park Tower.
Some sell apartments that are priced closer to $9,000/sf, certainly the domain of the super-rich.
However, almost directly next door to these Trillionaire Towers there are housing options for a FRACTION of the price.
A magnificent new condo located at 252 East 57th Street sells apartments for around $2,500/sf, yet almost directly across the street at 303 East 57th Street, apartments sell for under $500/sf. Its not THAT simple of course: the quality of space, services and amenities, the size of monthlies, etc vary notably. Yet the price variable is astonishing.
(from the Compass newsletter)
Wow thanks for that example. I don’t feel safe in the big blue cities anymore.
The Excelsior is on leased land. A big difference.
Thanks Bob that’s important piece of the puzzle that was left out. I had no idea that was on leased land and That could definitely make the price difference
I think the author covered it, saying it’s not that simple and there are many variables.
Don’t get me started on the condo vs co-op variables. To buy a co-op, you have to be approved by the board – and if they don’t like you or your money, they can deny you the purchase. Kayla had one where the buyer just got out of law school in June and was starting a lawyer job in September. With help from her parents, she was paying cash for the apartment – but the board denied her because she was technically unemployed.
I don’t know how buyers and agents can live with that.
What? That sounds so discriminatory and racist. Eff that