JERSEY CITY LIST - Re: Realtor Playing Games with Full Price Offers? Help! [Real Estate]

Re: Realtor Playing Games with Full Price Offers? Help!

#30

Home away from home

Joined:
2004/11/6 21:13
Last Login :
2023/7/17 17:42

From Hamilton Park

Group:
Banned

Posts: 5775

Quote:

Economic bubbles are specific conditions, not a general category of up/bull markets. It's when prices are disconnected from fundamentals, which distorts normal market incentives, and usually incurs a rapid deflation of prices.

All of which is far clearer post mortem than during.
Quote:

As a homeowner? Low cap rates merely confirm that it's a very tight market. It doesn't tell you why, or whether prices are out of whack with what people can afford.

When the ratio of the price to buy housing is so far above the price to rent it, it's a sign of unsustainability.

Posted on: 2016/7/11 15:07

Re: Realtor Playing Games with Full Price Offers? Help!

#29

Home away from home

Joined:
2012/8/6 22:56
Last Login :
2019/11/14 1:56

Group:
Registered Users

Posts: 1058

Quote:

brewster wrote:
You REALLY hate the idea of a bubble, but try thinking of it this way: all up markets are bubbles and all down markets are just slumps....

Economic bubbles are specific conditions, not a general category of up/bull markets. It's when prices are disconnected from fundamentals, which distorts normal market incentives, and usually incurs a rapid deflation of prices.

Changes in supply and demand can happen rapidly, and often in response to non-bubble conditions like a recession.

A lot of bubble behavior present from 2000-2006 is not happening now. We don't have mortgage originators throwing around jumbo loans with terrible terms to unqualified borrowers. We don't have people proclaiming "this time it's different!" and claiming that real estate markets never drop. We don't see investment banks selling obscure MBSs to German bankers who don't understand what they're buying, because their bosses told them to jump into the NYC real estate market before it's too late.

Quote:

I like cap rates. They're unemotional, they're simply what property is worth as a business, the P/E of real estate. You can see below that cap rates are at historic lows, meaning the prices of property vs it's rents is at a historic high. Scares me, why doesn't it scare you?

Why should it?

JC is roughly 70% renters; 07302 is over 80% renters. Most of the big housing coming online is rentals. Inventory is already low, and demand is obviously rising.

The NYC metro area is a very expensive place to do business. This is obviously going to bring down the cap rate.

Cap rates in the area peaked in 1992, have gradually fallen since then, and appear to be correlated with interest rates. They don't indicate recessions, and the trend didn't change in 2007-2008.

If I wanted to buy a few buildings to rent out, then I'd be worried. It'd be another indicator that it's not a great market for it, as my upfront and/or ongoing costs will be high, and ROI will be low.

As a homeowner? Low cap rates merely confirm that it's a very tight market. It doesn't tell you why, or whether prices are out of whack with what people can afford.

Posted on: 2016/7/11 13:42

dtjcview

Re: Realtor Playing Games with Full Price Offers? Help!

#28

Home away from home

Joined:
2010/8/17 1:45
Last Login :
2020/8/26 13:40

Group:
Registered Users

Posts: 3141

Quote:

brewster wrote:
...
I like cap rates. They're unemotional, they're simply what property is worth as a business, the P/E of real estate.
...

Take a look at the yield of the 10-Year US Treasury over the past 10 years and you'll see a similar chart. And interest rates are more likely to go down further than go up - with Europe imploding, slowing China growth - US Real Estate and Gold seem to be the only investment games in town. The rules of the game have changed - looking at mean reversion on cap rates is as flawed as looking at mean reversion on US Treasuries. Ask Japan about that.

Housing starts in Dolomiti's supply and demand assertion is a better indicator at the moment. And if you equate the worst-hit properties after the reval as being equivalent to a ~1.5% rate hike - the following analysis suggests the market will quite happily absorb that. http://economistsoutlook.blogs.realto ... est-rates-on-home-prices/

Posted on: 2016/7/11 10:56

Re: Realtor Playing Games with Full Price Offers? Help!

#27

Home away from home

Joined:
2008/8/12 18:31
Last Login :
2020/4/26 22:05

Group:
Registered Users

Posts: 3932

Quote:

Dolomiti wrote:
Yes, and I'm both highly skeptical, tired of, and deeply unimpressed by these routine predictions of doom that keep not happening.

JC is not going to be doomed because of the reval. It's going to suck for a bunch of people, but it's got to happen sometime. People will pay their taxes and move on.

I don't disagree with you... I don't believe JC as a whole is doomed. I simply believe (and, stated) that a lot people are in denial about the reval, or completely oblivious to it, and that they will have a rude awakening when it [the reval] finally happens. Since the beginning of the year, I have heard from three different friends or acquaintances about their recent purchases in DTJC and only one knew about the reval and he doesn't believe it will happen. The others had NO IDEA about it. I know that it will not be the end of the world for the JC RE market, but I'm fairly certain it will be very difficult (if not impossible) for them to afford the increase without some serious belt tightening or other measures (like renting their basements, or a room). In any case, I only wish realtors were more forthcoming about this information instead of just concerned about their commission. Sadly, some don't even seem to ok much about the reval situation, which in itself is a serious red flag about their competency.

Posted on: 2016/7/11 7:16

http://streeteasy.com/blog/nyc-median-cap-rate-declines/

http://www.worldpropertyjournal.com/u ... ing-cap-rates-grm-791.php

Re: Realtor Playing Games with Full Price Offers? Help!

#26

Home away from home

Joined:
2004/11/6 21:13
Last Login :
2023/7/17 17:42

From Hamilton Park

Group:
Banned

Posts: 5775

Quote:

Dolomiti wrote:
By the way, it isn't just JC suffering from inventory problems. Brooklyn and Queens are running into the same issues.

http://www.businessinsider.com/homes- ... g-at-record-speeds-2016-7

A lot of this overheating (defined by low inventory leading to high prices) is due to low interest rates, which both enables normal home buyers & investors, and drives cash here from all over the world. Unsustainable trends tend not to be sustained.

You REALLY hate the idea of a bubble, but try thinking of it this way: all up markets are bubbles and all down markets are just slumps. They will end, because that's what happens eventually. The market NEVER just slows and plateaus, the only question is how far does it fall, and what metric you use for value. I like cap rates. They're unemotional, they're simply what property is worth as a business, the P/E of real estate. You can see below that cap rates are at historic lows, meaning the prices of property vs it's rents is at a historic high. Scares me, why doesn't it scare you?

Posted on: 2016/7/11 3:09

Re: Realtor Playing Games with Full Price Offers? Help!

#25

Home away from home

Joined:
2012/8/6 22:56
Last Login :
2019/11/14 1:56

Group:
Registered Users

Posts: 1058

By the way, it isn't just JC suffering from inventory problems. Brooklyn and Queens are running into the same issues.

http://www.businessinsider.com/homes- ... g-at-record-speeds-2016-7

Posted on: 2016/7/11 1:44

Re: Realtor Playing Games with Full Price Offers? Help!

#24

Home away from home

Joined:
2012/8/6 22:56
Last Login :
2019/11/14 1:56

Group:
Registered Users

Posts: 1058

Quote:

bodhipooh wrote:
You quoted me as saying something I never did...

Apologies, I edited out a bunch of quotes to make it readable.

Quote:

The only thing I did write was that very last snippet you quoted (combination of denial and ignorance being a recipe for disaster) and I do stand by that assertion. Lots of people are in denial about the reval and they will likely have disastrous results due to their being overextended.

Yes, and I'm both highly skeptical, tired of, and deeply unimpressed by these routine predictions of doom that keep not happening.

JC is not going to be doomed because of the reval. It's going to suck for a bunch of people, but it's got to happen sometime. People will pay their taxes and move on.

Posted on: 2016/7/11 1:41

Re: Realtor Playing Games with Full Price Offers? Help!

#23

Home away from home

Joined:
2012/8/6 22:56
Last Login :
2019/11/14 1:56

Group:
Registered Users

Posts: 1058

Quote:

Frinjc wrote:
So..., are buyer's agents who are supposed to act in their client best interest legally liable if they fail to communicate the reval to them?

AFAIK, no.

Posted on: 2016/7/11 1:38

Re: Realtor Playing Games with Full Price Offers? Help!

#22

Home away from home

Joined:
2008/8/12 18:31
Last Login :
2020/4/26 22:05

Group:
Registered Users

Posts: 3932

Quote:

Dolomiti wrote:
Quote:

bodhipooh wrote:
My opinion -- It feels like we're in another bubble that may pop this year (or in twenty).

Erm.... 1-20 years? That's quite the hedgehog prediction.

How well did JC recover from the last certified national real estate bubble?

There's a lot which suggests this is not a "bubble," rather ordinary supply and demand pressures. Key is that unlike 2002-2006, the mortgage originators and banks are not throwing jumbo loans at anyone with a pulse. They're still very strict with borrowers. Another is that inventory is still in very short supply. A third is that people have predicted an imminent bubble burst for well over a year now, and it keeps Not Happening.

Quote:
The folks engaging in the bidding wars are going to be overpaying and will get a nasty tax bill when the reval is done, or if interest rates ever start to rise.

Buyers aren't being put off by massive increases in real estate prices in DTJC. The units of people forced to sell will result in a short-term, one-time increase in supply, which will be snapped up very quickly.

Quote:
Lots of ignorance and denial in the DTJC market... a recipe for disaster.

You quoted me as saying something I never did... The only thing I did write was that very last snippet you quoted (combination of denial and ignorance being a recipe for disaster) and I do stand by that assertion. Lots of people are in denial about the reval and they will likely have disastrous results due to their being overextended.

Posted on: 2016/7/11 1:38

Re: Realtor Playing Games with Full Price Offers? Help!

#21

Home away from home

Joined:
2012/8/6 22:56
Last Login :
2019/11/14 1:56

Group:
Registered Users

Posts: 1058

Quote:

bodhipooh wrote:
My opinion -- It feels like we're in another bubble that may pop this year (or in twenty).

Erm.... 1-20 years? That's quite the hedgehog prediction.

How well did JC recover from the last certified national real estate bubble?

There's a lot which suggests this is not a "bubble," rather ordinary supply and demand pressures. Key is that unlike 2002-2006, the mortgage originators and banks are not throwing jumbo loans at anyone with a pulse. They're still very strict with borrowers. Another is that inventory is still in very short supply. A third is that people have predicted an imminent bubble burst for well over a year now, and it keeps Not Happening.

Quote:

The folks engaging in the bidding wars are going to be overpaying and will get a nasty tax bill when the reval is done, or if interest rates ever start to rise.

Buyers aren't being put off by massive increases in real estate prices in DTJC. The units of people forced to sell will result in a short-term, one-time increase in supply, which will be snapped up very quickly.

Quote:

Lots of ignorance and denial in the DTJC market... a recipe for disaster.

Posted on: 2016/7/11 1:30

Frinjc

Re: Realtor Playing Games with Full Price Offers? Help!

#20

Home away from home

Joined:
2007/7/4 16:37
Last Login :
2021/11/4 21:55

From Hamilton Park

Group:
Registered Users

Posts: 586

So..., are buyer's agents who are supposed to act in their client best interest legally liable if they fail to communicate the reval to them? It would be especially interesting to know the info recent purchasers of DTJC houses got using buyer's agents from Armagno, Boyne's, Weichert.

Posted on: 2016/7/11 0:41

Re: Realtor Playing Games with Full Price Offers? Help!

#19

Home away from home

Joined:
2008/8/12 18:31
Last Login :
2020/4/26 22:05

Group:
Registered Users

Posts: 3932

Quote:

Kelcey wrote:
Quote:
His reply: "I have heard about it, but I am assuming it will not happen... they can't let it happen. If it happens, I will not be able to afford the mortgage and the taxes."

I can't bring myself to feel sorry for people who are so willfully ignorant. It's public information with a specific timeline for completion. And even before the decision came out, it was clear what direction the decision was headed.

People are definitely going to be impacted. For what it's worth, Hoboken seemed to weather their 47% tax increase in 2008 just fine.

In related news, I noticed that the Australians' properties have begun to start paying more of their fair share as assessments increased after property renovations were finished.

Agreed 100%. I was stunned at his reply. But, what can you say? The purchase was already completed, and there was a certain conviction that "something" would happen to not let the reval happen... Some people actually believe that.

But, my biggest quibble in all this is with all the real estate people (who surely must and SHOULD know about the reval) that fail to inform clients about the upcoming reassessment. Several friends and acquaintances who have purchased locally in the past year or so have no idea about it, or believe that nothing major will happen. The fact that they are paying effective rates of 1% or lower seems totally reasonable to them.

Posted on: 2016/7/9 13:17

o73o2

Re: Realtor Playing Games with Full Price Offers? Help!

#18

Home away from home

Joined:
2009/5/15 4:26
Last Login :
2017/12/25 1:59

From here to eternity

Group:
Registered Users

Posts: 512

Quote:

carolina123 wrote:
Having just been on the selling side in DTJC I can tell you that real estate agents in general are just scum. When the market is hot, every person with 1/2 a brain becomes an agent and so there are a lot of amateurs out there.

Also, going to the listing agent isn't always a plus because the seller knows they are a double dipping on commission and only have their best interest in mind (not the sellers or buyers). Mine actually tried to convince me that I'd never get what I wanted for it so that i'd take her double commission clients offer. The next day she was proven wrong.

+1
as an informed buyer you need to have your own agent ... seriously
be a fncktard and do it own your own and bleed money ... the collective intellectual power and consumer support on jclist "warned" you ... get a brain

Posted on: 2016/7/9 2:30

Re: Realtor Playing Games with Full Price Offers? Help!

#17

Home away from home

Joined:
2004/11/6 21:13
Last Login :
2023/7/17 17:42

From Hamilton Park

Group:
Banned

Posts: 5775

Quote:

carolina123 wrote:
Having just been on the selling side in DTJC I can tell you that real estate agents in general are just scum. When the market is hot, every person with 1/2 a brain becomes an agent and so there are a lot of amateurs out there.

Also, going to the listing agent isn't always a plus because the seller knows they are a double dipping on commission and only have their best interest in mind (not the sellers or buyers). Mine actually tried to convince me that I'd never get what I wanted for it so that i'd take her double commission clients offer. The next day she was proven wrong.

Actually, in that case you want her to be your agent if you're buying. Had you taken that offer the buyer would have been happy.

But you are 100% that too many agents are knuckleheads who see it as easy money. In this market selling is easy, it's getting the listings that's the real challenge.

Posted on: 2016/7/8 19:17

carolina123

Re: Realtor Playing Games with Full Price Offers? Help!

#16

Newbie

Joined:
2016/7/8 19:01
Last Login :
2016/9/8 18:35

From DTJC

Group:
Registered Users

Posts: 6

Having just been on the selling side in DTJC I can tell you that real estate agents in general are just scum. When the market is hot, every person with 1/2 a brain becomes an agent and so there are a lot of amateurs out there.

Also, going to the listing agent isn't always a plus because the seller knows they are a double dipping on commission and only have their best interest in mind (not the sellers or buyers). Mine actually tried to convince me that I'd never get what I wanted for it so that i'd take her double commission clients offer. The next day she was proven wrong.

Posted on: 2016/7/8 19:05

Kelcey

Re: Realtor Playing Games with Full Price Offers? Help!

#15

Home away from home

Joined:
2005/4/5 17:54
Last Login :
2020/2/6 21:28

Group:
Registered Users

Posts: 225

Quote:

His reply: "I have heard about it, but I am assuming it will not happen... they can't let it happen. If it happens, I will not be able to afford the mortgage and the taxes."

I can't bring myself to feel sorry for people who are so willfully ignorant. It's public information with a specific timeline for completion. And even before the decision came out, it was clear what direction the decision was headed.

People are definitely going to be impacted. For what it's worth, Hoboken seemed to weather their 47% tax increase in 2008 just fine.

In related news, I noticed that the Australians' properties have begun to start paying more of their fair share as assessments increased after property renovations were finished.

Posted on: 2016/7/6 23:34

JCGuys

Re: Realtor Playing Games with Full Price Offers? Help!

#14

Home away from home

Joined:
2015/5/28 0:34
Last Login :
8/5 12:48

From Jersey City

Group:
Registered Users

Posts: 1032

Quote:

BobNesta wrote:
If there's a reval, people are going to get crushed and the market in JC will be severely impacted, imo. Makes me think that a reval is likely not going to happen due, but I haven't really been following the topic too closely.

Posted on: 2016/7/6 17:11

BobNesta

Re: Realtor Playing Games with Full Price Offers? Help!

#13

Just can't stay away

Joined:
2015/6/15 20:09
Last Login :
2018/12/6 18:15

From DT

Group:
Registered Users

Posts: 122

If there's a reval, people are going to get crushed and the market in JC will be severely impacted, imo. Makes me think that a reval is likely not going to happen due, but I haven't really been following the topic too closely.

Posted on: 2016/7/6 17:02

Re: Realtor Playing Games with Full Price Offers? Help!

#12

Home away from home

Joined:
2008/8/12 18:31
Last Login :
2020/4/26 22:05

Group:
Registered Users

Posts: 3932

Quote:

JCGuys wrote:
Quote:

Just don't get too emotionally invested in a property in a hot market.

^ This.

My opinion -- It feels like we're in another bubble that may pop this year (or in twenty). The folks engaging in the bidding wars are going to be overpaying and will get a nasty tax bill when the reval is done, or if interest rates ever start to rise.

In a recent conversation with some acquaintances, they told me they had just bought a property in DTJC, so I asked if they were aware of the reval. And, if so, are they worried about it. His reply: "I have heard about it, but I am assuming it will not happen... they can't let it happen. If it happens, I will not be able to afford the mortgage and the taxes."

Lots of ignorance and denial in the DTJC market... a recipe for disaster.

Posted on: 2016/7/6 16:49

JCGuys

Re: Realtor Playing Games with Full Price Offers? Help!

#11

Home away from home

Joined:
2015/5/28 0:34
Last Login :
8/5 12:48

From Jersey City

Group:
Registered Users

Posts: 1032

Quote:

Just don't get too emotionally invested in a property in a hot market.

^ This.

My opinion -- It feels like we're in another bubble that may pop this year (or in twenty). The folks engaging in the bidding wars are going to be overpaying and will get a nasty tax bill when the reval is done, or if interest rates ever start to rise.

Posted on: 2016/7/6 14:07

jerseymom

Re: Realtor Playing Games with Full Price Offers? Help!

#10

Home away from home

Joined:
2007/7/9 19:50
Last Login :
2022/1/29 1:10

Group:
Registered Users

Posts: 2302

Quote:

sinbushar wrote:
Quote:

karindiann wrote:
You need to engage a buyer's agent who can explain the realities of the current market. This is a seller's market, and many properties listed for sale in JC are going above asking price. The listing agent's job is to obtain the best possible price for the seller, and that often means waiting until several offers come in on the property (not just accepting the first offer). The seller has no obligation (legal or otherwise) to accept the first offer they receive, even if it is at asking price. It's not a game -- it is just the reality of the market right now. When there are multiple offers the listing agent will ask all potential buyers for their "highest and best" -- giving you a chance to bid against the others. When you are given this opportunity, raise your offer and you have a chance to get the property if you are the highest bidder. Again -- a buyer's agent can really help you navigate this kind of market.

Just to add to this, though (I believe) the listing agent is required to present all offers to the seller, I don't think there is any reason they wouldn't say "I know this is asking price, but let's get some more offers and then put a rest for 'best and final'".

...Which is exactly what happened in this case. Thanks everyone for your advice and suggestions. I just have to become a smarter buyer. I've bought several houses in the past, but this is the first time I've seen the market like this - most houses I'm looking at are getting offers within 24 hours of listing - and then are under contract within days because the offers are at or above listing price. You really need to be on top of your game and know how to play. Lessons learned. Still looking!

Posted on: 2016/7/6 10:35

sinbushar

Re: Realtor Playing Games with Full Price Offers? Help!

Newbie

Joined:
2009/10/10 6:48
Last Login :
2023/7/30 23:41

From NJ

Group:
Registered Users

Posts: 7

Quote:

karindiann wrote:
You need to engage a buyer's agent who can explain the realities of the current market. This is a seller's market, and many properties listed for sale in JC are going above asking price. The listing agent's job is to obtain the best possible price for the seller, and that often means waiting until several offers come in on the property (not just accepting the first offer). The seller has no obligation (legal or otherwise) to accept the first offer they receive, even if it is at asking price. It's not a game -- it is just the reality of the market right now. When there are multiple offers the listing agent will ask all potential buyers for their "highest and best" -- giving you a chance to bid against the others. When you are given this opportunity, raise your offer and you have a chance to get the property if you are the highest bidder. Again -- a buyer's agent can really help you navigate this kind of market.

Just to add to this, though (I believe) the listing agent is required to present all offers to the seller, I don't think there is any reason they wouldn't say "I know this is asking price, but let's get some more offers and then put a rest for 'best and final'".

Posted on: 2016/7/6 4:01