Saturday, June 18, 2016

Thank You Janet Yellen: Bidding Wars in the New York City Suburbs

NYT reports:
The listing Nadia Krivickova and Michael Krivicka had been waiting for popped up early last September: a pristine 2,500-square-foot 1924 colonial with a child-friendly backyard in the lower Westchester County village of Pelham Manor. Then living in an apartment in Manhattan, the couple (she’s an accountant, he’s a founder of Thinkmodo, which creates viral video campaigns) were in need of more space for their two toddlers. After their real estate agent, Arthur L. Scinta, an associate broker with Houlihan Lawrence, advised them to move quickly, they went to see the house the very next day.

By 5 p.m., they had submitted an offer for the full asking price of $942,000. The sellers wanted to give it more time. After several days, the couple raised their offer to $999,000. The sellers wanted another week. “We asked them to give us a number they would take it off the market for,” Ms. Krivickova said. “They said no.”

The couple really wanted the house. They huddled with Mr. Scinta, who analyzed recent sales prices of similar properties to help them strike a balance between a strong offer and an overzealous offer, which, if it exceeded the bank’s appraisal, could cause problems with financing.

Finally, on a Monday morning, they submitted their highest offer: $1,087,000, a full 15 percent premium. Mr. Scinta heard back that afternoon.

“Arthur called and told us there were nine other offers,” Ms. Krivickova said. “But we got it — by three or four grand....

The bidding wars that have become the norm in New York City are now also common in select suburbs within easy commuting distance. Buyers priced out of the city are heading for the ’burbs, driving up demand and creating a more fraught buying process in close-in towns...

Across Westchester, northern New Jersey, parts of Long Island and lower Fairfield County, Conn., the competition is fiercest for move-in-ready homes toward the lower end of the price scale — under $1 million in some markets, under $2 million in others — in places within a 40-minute rail commute to the city. Walking distance to a lively downtown, a train station or both heightens the appeal.

Well-priced homes in good condition in these markets often draw multiple offers within days of coming on the market.
This is not what a recession looks like.



  1. It's true that these real estate markets are hot, bid up by folks closest to the Fed money printing fire hose (NYC financial svcs & ancillary activities) as well as many wealthy foreigners (Arabs, Chinese, Russians, you name it). But it's been this way in these areas since at least the early 1980's, corresponding to the beginning of the complete financialization of the economy.

    FWIW, I sold an extensively renovated, but still 60 year old 3 bed / 3 bath ranch house with a shared driveway in a prestigious Northern NJ suburb with a 40 min NYC train commute in a weekend for full list (approx 750k) in January 2009, right in the middle of the worst part of the last recession. Got double what I paid 8 years earlier and the folks who sold it to me then had gotten near double what they paid from me!

    The people in these areas are so freakin' wealthy it shocks the conscience. Bailout guaranteed and recession proof. I'm talking Goldman bankers who make double or triple digit million bonuses and pay 150k a year in PROPERTY TAXES alone without batting an eyelash. It really brings to mind a coupla quotes from the movie Wall Street; "I didn't know how poor I was 'til I started makin' a little money" and Gekko's comparison of the "worker" making 400k a year a flying first class vs. the 1 percenter of the mid-1980s worth $50 million dollars, "liquid, enough to buy your own jet." BTW, I'd call it a 90/10 split in these communities between people who bring valuable goods and services to market (10%) and those who feed off of the Fed skim (90%).

  2. "This is not what a recession looks like." -RW

    --Yeah, Yeah, we know. That's why they are not raising interest rates, right?