Bubble, Bubble, boy are we in trouble, part 2
An owner recently posted this comment on the PropertyGrunt regarding my bubble entry
The quandary that this reader finds themselves in is unfortunately quite common at this time. They have an apartment that has greatly appreciated in value due to the market and that they bought it almost ten years ago. However the good fortune the sellers are experiencing have stymied their efforts to upgrade to a bigger space due to the fact that this insane market has put that 3 bedroom out of their budgetary reach.
However all is not lost dear reader. There is a possibility of finding that 3 bedroom but you need to be aware of certain things.
Although the market is hot, at this moment certain classes of apartments are more popular than others which include studios and one bedrooms. People are looking for starter homes, anything they can get their mitts on that they can afford. So far I have not even had one buyer who wants a three bedroom. Not that they do not exist they are just far and few from the Grunt's perspective.
This is a good sign because it is most likely that a significant number of 3 bedrooms have been sitting on the market for awhile so sellers maybe a bit concerned. So if there is a three bedroom that you have your eye on but is out of your price range, the seller might be more open to a lower bid if there has been no offers.
If an owner wants to sell an apartment it has to be priced correctly and often that can only be determined through trial and error. From my experience I have had listings that have not moved in months and when the price is reduced it moves immediately. So no harm in watching and waiting.
I think the best deals are the pied a terre three bedrooms since they are not being utilized for the owner to justify their cost. If the owner recently purchased the apartment as a pied a terre they may need to unload it if their financial resources are spread too thin. If you are the only game in town they maybe more partial to negotiating on the price.
The ideal situation is that when the bubble pops, the buyers dry up and you find an owner that needs to sell since they can't afford to hold on and weather the storm. Bear in mind what affects them may affect you since you are also selling.
I want to make it quite clear that you should not base your decision on this entry. My recommendation is the following.
1.Talk to several good brokers and find out what the status of the market is for three bedrooms and two bedrooms and get comparable prices.
2.When you are looking at the 3 bedrooms find out which ones have been on the market longest and figure out whether they are pied a terres or not. The ideal situation is to find an owner who does not have the luxury of waiting out the storm. Price your apartment to what you feel is best. But you have to be aware of market trends. If its not priced properly it will not move. Be ready to compromise whether you are selling or buying.
3. You are a broker's dream because you are both a seller and buyer therefore they can double their pleasure off of you. If you sign up with a exclusive broker you can make it clear to them that if they want to sell your apartment it is contingent that they find a three bedroom that fits your requirements. I guarantee that they will go through hell or highwater to accomplish this because of the lack of inventory on the market makes your apartment quite valuable to them.
4. To quote Monty Python and the Holy Grail "RUN AWAY!" If you can stand it. Sit back and relax and wait till things cool off.
Best of luck good reader. Keep us all posted.
What does your theory have to say about people who bought a 2BR in 1997 for what then was a decent price and what now seems a ridiculously low one, but cannot afford to trade up to a 3BR at current prices? (In other words, it doesn't help a bit that our apartment has appreciated 2x-2.5x; the 3BRs are stratospherically out of our range.) We are bursting this apartment at the seams, but I can hold on as long as I know that someday I might be able to buy a 3BR ! I am anxious for any crumb of wisdom you have.
The quandary that this reader finds themselves in is unfortunately quite common at this time. They have an apartment that has greatly appreciated in value due to the market and that they bought it almost ten years ago. However the good fortune the sellers are experiencing have stymied their efforts to upgrade to a bigger space due to the fact that this insane market has put that 3 bedroom out of their budgetary reach.
However all is not lost dear reader. There is a possibility of finding that 3 bedroom but you need to be aware of certain things.
Although the market is hot, at this moment certain classes of apartments are more popular than others which include studios and one bedrooms. People are looking for starter homes, anything they can get their mitts on that they can afford. So far I have not even had one buyer who wants a three bedroom. Not that they do not exist they are just far and few from the Grunt's perspective.
This is a good sign because it is most likely that a significant number of 3 bedrooms have been sitting on the market for awhile so sellers maybe a bit concerned. So if there is a three bedroom that you have your eye on but is out of your price range, the seller might be more open to a lower bid if there has been no offers.
If an owner wants to sell an apartment it has to be priced correctly and often that can only be determined through trial and error. From my experience I have had listings that have not moved in months and when the price is reduced it moves immediately. So no harm in watching and waiting.
I think the best deals are the pied a terre three bedrooms since they are not being utilized for the owner to justify their cost. If the owner recently purchased the apartment as a pied a terre they may need to unload it if their financial resources are spread too thin. If you are the only game in town they maybe more partial to negotiating on the price.
The ideal situation is that when the bubble pops, the buyers dry up and you find an owner that needs to sell since they can't afford to hold on and weather the storm. Bear in mind what affects them may affect you since you are also selling.
I want to make it quite clear that you should not base your decision on this entry. My recommendation is the following.
1.Talk to several good brokers and find out what the status of the market is for three bedrooms and two bedrooms and get comparable prices.
2.When you are looking at the 3 bedrooms find out which ones have been on the market longest and figure out whether they are pied a terres or not. The ideal situation is to find an owner who does not have the luxury of waiting out the storm. Price your apartment to what you feel is best. But you have to be aware of market trends. If its not priced properly it will not move. Be ready to compromise whether you are selling or buying.
3. You are a broker's dream because you are both a seller and buyer therefore they can double their pleasure off of you. If you sign up with a exclusive broker you can make it clear to them that if they want to sell your apartment it is contingent that they find a three bedroom that fits your requirements. I guarantee that they will go through hell or highwater to accomplish this because of the lack of inventory on the market makes your apartment quite valuable to them.
4. To quote Monty Python and the Holy Grail "RUN AWAY!" If you can stand it. Sit back and relax and wait till things cool off.
Best of luck good reader. Keep us all posted.
posted by Grunt at
9:23 AM
