From Newsday:
Inventories for multimillion-dollar houses are up, and it’s taking longer to sell them
Are the rich getting restless?
You might be too if you had multimillion-dollar digs waiting to be sold.
Prices for some swanky pads on Long Island have been reduced recently, and it’s taking longer to sell, signs that the high-end market has started to feel the pinch – same as the regular folks. Agencies’ inventories of expensive homes have gone up, triple in one case.
Even when nearly empty, these homes can cost their owners hundreds of thousands of dollars a year in staff, electricity, maintenance and more, depending on the property’s size.
Still on the market after 16 months is Northwood, an Oyster Bay Cove estate; listed originally at $43 million, it’s now at $20 million because Nassau County is negotiating a contract to buy more than half its 60 acres of property. Middlesea, singer Billy Joel’s estate on Centre Island, has dropped from last September’s $37.5 million to $32.5 million.
“The luxury market has more beautiful homes in it than I’ve ever seen,” said Barbara Candee, vice president of Daniel Gale Sotheby’s International Realty in Locust Valley, whose firm now has about 35 prime properties that range from $10 million to Joel’s $32.5million.
Southerly, a Centre Island estate where owner Patricia Altschul’s mini horses gambol, has dropped from $19 million last fall to $15.8 million now. She’d like to sell it because she already has another New York home, and she’s away a month at a time, following horse races, visiting her California son, boating and other pleasures.
“I found two houses that I like down South,” Altschul said. “I’d love to get back down to ‘my people,’ but I still have an apartment in New York and tons of friends in New York, and I would never give that up.
“I’ve had several offers. If I don’t do the kind of deal I want, I’ll keep it, be happy here and get some place down South, too. I think high-end properties usually take a while to sell.”
One new reason for higher inventory is the aging of the owners, a trend that has affected so many other markets.
…
But real estate experts said the high-end market is still much healthier than the middle. In the Hamptons, agents said, the hobnobbing and glamorous image still generate bidding wars reminiscent of the real estate boom all over Long Island less than two years ago.Only now, wealthy buyers are getting the same advantage that not-so-rich ones have been getting for more than a year – a more level bargaining field with sellers.
“At the high end, there’s an end to the speculative market, in which people felt they could pay anything and sell and have their property be worth more than whatever they paid for it a year later,” said Robert Campbell, associate professor of real estate finance at Hofstra University. “People are no longer making that assumption.”
Many of the high-end property owners have become more realistic also. Instead of mentally living in the real estate boom years, when they could demand a lot, they’re dropping the prices.
“They’re getting restless in the sense of we live in a world of instant gratification,” Caputo said. “They have places they want to go to.”
The properties that languish on the market most likely don’t have realistic prices. Several agents said they think Joel’s house is overpriced. And the Lloyd Neck estate Sassafras, likely the North Shore’s highest priced listing ever, is still on the market for its original asking price of $60 million. The 48-acre estate, with two helipads and two houses, went on the market in March 2006.
California: State Senate Passes Bill to Tighten Lending Standards
http://calculatedrisk.blogspot.com/2007/06/california-state-senate-passes-bill-to.html
New Jersey issued the CSBS Nontraditional Mortgage Guidance in January.
jb
Off topic questions for Realtors,
When you’re listing a home why wouldn’t you want to present any and every offer to your client?
I just made an offer 10% off asking and the listing agent said she didn’t want to present my offer (good thing she wasn’t on the end of some of my other 20% off offers), but she said she “had to.” My agent simply replied “yes, you have to.”
I don’t know if she was just playing hard ball or not, but I’ve encountered this previously, in some cases, I’m 99% sure the offer wasn’t presented.
What’s the downside? Your client thinks you mispriced the house? If I was selling a houe I’d rather receive a low offer than no offers at all. I feel that’s a major issue with today’s market, the sellers are high $ and the buyers are low $ and no one is doing anything to meet at a price determined by a market.
Of the houses that I’m keeping an eye the only ones that have come down in price over the last year are the ones that I’ve made an offer on. My offer (maybe the only one they’ve rec’d) has prompted price reductions and eventual sales, hell I should get a commission.
I don’t think anyone wants this market to continue to be stuck where it is now, so one side needs to make the first move. Sellers don’t want to in the event they can get a sucker to buy at their asking.
BUYERS GET OUT THERE AND MAKE YOUR LOW BIDS, MY PERSONAL EXPERIENCE HAS SHOWN THIS HAS HELPED CONVINCE SELLERS TO REDUCE THEIR PRICE!!!
#3, what do you mean by your realtor? Do you have a buyers broker? Or is your realtor the MLS realtor that is showing anothers realtors listing?
John,
I as a potential buyer have a buyers broker, my broker submitted an offer to the selling broker of a house I’m interested in.
The selling broker gave my broker a hard time about the 10% off price of the offer and said she didn’t really want to show the offer to the homeowner selling the house.
#3,
Your analysis is completely flawed. Throwing lowballs all over the place is not going to bring down prices. I am willing to bet that, after seeing your offer, the sellers were thinking of every sing curse word to describe you with. In fact, the realtor and seller were probabaly laughing at you and wondering where they can get some of the stuff you are smoking.
The downside to presenitng a lowball is simple: The realtor knows the sellers will not accept it. Most sellers let their agent know what their rock bottom is and I am sure that your offer was well below it. Based on the number of offers you have been making, it appears that your lowball strategy is not successful. If you want to get into a house, you will need to give an offer close to askig price, or just sit on the sidelines because all you are doing is wasting your time and the time of other people.
“BUYERS GET OUT THERE AND MAKE YOUR LOW BIDS, MY PERSONAL EXPERIENCE HAS SHOWN THIS HAS HELPED CONVINCE SELLERS TO REDUCE THEIR PRICE!!!”
How has this helped sellers lower their asking prices and buyers if all of your lowball offers were thrown into the garbage?
Donald,
I know you may find this strange, but not all sellers will spend the rest of their day cursing at a buyer after receiving a lowball offer.
Oh, and I’m sure that the article quoted isn’t a sign of a market slump either…..
/sarcasm
Donald, it can help a seller change his psychology. It’s one thing to have a house sit with no interest and no offers. He can rationalize it away by thinking “the right buyer just hasn’t come along to see my wonderful property yet”. He might get mad at the first low offer or the second, but by the third he might be thinking “let’s make a deal”.
If the seller is really interested in selling he won’t be laughing at low offers…more likely crying.
Donald,
I haven’t gone around making 100’s of offers. I’ve made 6 offers since Dec 2005, including the one I just made. I’ll leave that one out of the equation since it’s too early to determine whether my offer has or will have an effect on the seller lowering the price. One of those 6 offers I’m convinced was never presented to the homeowner, I don’t know for sure, but in any event, the price was dropped significantly from the OLP.
Besides the most recent offer, 4 of the 5 have lowered the price significantly. Whether it’s due to my offer or not, I truly don’t know. But each listing began to drop the price shortly after my offer and continued to come back to me after each drop and before they made their next drop “we’re dropping the price again, do you want to raise your offer?” My response “my offer is market based and that is what I believe the house is worth.” I’ll give you the stats:
OLP down to Last LP
$850 down to $699
$1.25 down to $999
$1.0 down to $825
$1.09 down to $780
The 5th offer was made 2 months ago and they are still at original asking.
I’m not saying what I’ve done will create the same response in every situation, but I believe the facts will show that they have worked in all but one of the 5 offers I’ve made. I invite you to make your own opinion based on the facts, if you disagree, to each his own.
Donald is an FB probably and still unable to get out. I wouldn’t worry about his comments.