Property Grunt

Wednesday, July 27, 2005

The burbs

Grunt, what would your advice me to a first time buyer looking for a home in the NYC suburbs? We're not flippers, just want a house. Should we hold on a bit longer? I hate the idea that a starter home should be 650-700Gs but live with the fear that prices will just keep rising (even though I know rationally that it can't go on forever)

Ahh the burbs. The last bastion of peace and quiet for adults and the last place any high school kid wants to be on a Saturday night. As this reader has mentioned the suburbs have been hit with bubble mania as people are coming in droves to get a bigger bang for their buck.

Although my primary focus has been Manhattan and I am very aware of that there has been a ton of appreciation in Westchester including as far Putnam Valley. And because of low interest rates many homeowners are simply refinancing and the few that are selling are asking for insane prices for their homes, which have resulted in huge lack of inventory especially in the more popular areas of Westchester with strong school systems and a ton of unending demand. Sound familiar?

Will prices simply stay in one place or drop it like it’s hot? Should a buyer just go for it? I don’t know.

What I will say the following when it comes to the suburbs.

1. Look for a good location that suits your needs e.g. school district, convenience to public transportation.

2. Whatever action you decide whether it is to buy or wait you should the examine pros and cons of these actions. For instance I know of many buyers who are expecting children. Therefore living in a one-bedroom apartment is not an option since they require more room. But if you pull the trigger can you afford the mortgage payments that will no doubt be making you wake up in a cold sweat every night? Its going to suck but you need to do your numbers.

Yes. I know. It’s pretty much more of the same. But you have to take a very close look at not only your finances but also your mental and emotional state of what you are willing to deal with.

On a side note the Grunt recently proclaimed that the record sale of homes in June was another indication of the imminent correction. I would also add that the rapid rate of sales being closed is also indicative of the current state of mind of personnel in the real estate industry. From real estate brokers, mortgage broker, lawyers to title companies, last June’s record sales just show how concerned they are about the looming correction and they are doing everything in their power to tie loose ends. This is akin to an after Christmas sale when the stores need to clear out their inventory before for the spring.

Bottomline, people know the party is about to end so they are heading to the open bar for one last blowout. So Grunt still stresses that people treat real estate like a night at Scores. Look but don’t touch. But if you find a deal that makes sense well then go for it.