That is so true. Comps ARE all over the place. I decided what I wanted in a house and looked for those types in my price range. I zeroed in on the few that were the cheapest that had what I wanted. I'm ready to buy now so I'm not going to sit around waiting to see if they'll go cheaper.

I can relate - but as a seller. We talked to two realtors about selling our house and they were $25000-$50000 apart on their suggested list price. One was focused on old comps (zeroing in on square footage) and making a general assumption that prices had gone (or were going) down. So, she was looking at things "on paper." The other decided to raise his suggested list price a little after seeing all the features and updates in the house. Now of course we liked the higher price better but I have a bit of concern about what it can get appraised for.

As a buyer (which we will be when we sell this house), I think YOU have to decide what the home is worth TO YOU. If you really like the home, I would probably go with the "majority of house prices." When buying a home, I'm not looking for the home that is best deal really. I'm looking for a place I want to live in that I can afford.

The appraisal (by the bank, assuming you're taking a loan) should give you piece of mind that you didn't over pay. If it doesn't, then you can reneogiate price (or get out of the deal).

We are in the same boat. Sold our house last summer, took a financial beating and have been looking for over 6 months. We wasted time on a couple of short sales (not for the faint of heart).

Some sellers have drastically lowered their prices but their houses are junk so we would never buy anyway. Some neighborhoods have so many houses for sale that we think that surely the prices will have to fall some more. Sellers in some of the nicer homes are still asking the same price that they started with 18 months ago. Some buyers are getting great bargains, others are over paying (imo) and so the comps are crazy.

We don't mind if we don't get in at the bottom but we are determined that we aren't going to buy another person's white elephant.

An appraisal is a must but I can't see how the appraisers are able to get it right with such wildly swinging comps. Or no comps at all.

I'd be cautious if I were thinking about buying a condo these days. I know three people who bought/sold a condo and they all had interesting things to say about the experience.

The first woman had been renting an apt for years. She purchased a studio condo in a large bldg. at the height of the market. She didn't realize that people were moving out of her bldg, not in. They have consistently raised the condo fees since she moved in. Plus, the bldg is falling apart. Chunks from the floor above her are falling on her patio. There is scaffolding on that side of the bldg. In addition to the monthly fees, they are asking for extra money to repair this. She said if she could do it over again, she would never have stopped renting.

Second person was a previous home owner and then renter. He purchased a condo and has watched the value stay where it was at when he purchased in 2008.

Third person was left a condo by her parents in Myrtle Beach, S.C.. She tried renting it but the association doesn't allow rentals of less than 6 months. She had many bad renters and decided being a landlady wasn't for her. She put it on the market for $240k in 2008 and ended up selling for $175k. I think she was lucky to get that. There are many foreclosed properties nearby.

Here are a few things I would be considering before purchasing a condo:

How to avoid buying a problem condo
www.interest.com/mortgage/avoid_buying_problem_condo_0817.html

Because of DH being in the trades and as a building inspector for years, we look at houses very different. We built one and remodeled 3 others and even now I get very frustrated in the one we have due to size. We went from a 2600 split level to a 1400 and still have boxes unpacked. We have done some remodeling on this, but due to our age and health are learning to live with less stuff. But because of our hobbies etc, we still prefer a 3 bedroom and yes we do have a basement. The one thing that I do not and will not have is granite tops. We have a formica tile counters that look as good today as they did 9 years ago. Personally the quality of the materials in the newer homes are just plain junk. This place we are living in now is real wood and that makes a big difference. Yes it is older but even the walls and construction is better than many newer homes.
Just my opinion.

Thanks dreamgarden for that information. I worry about the health of condos and coops and can't find out how to check. I asked our Realtor and she said she had no idea that we could try speaking with the management company of the buildings.

We are looking for our son and plan to pay cash so won't have the benefit of appraisal.

Does anyone know how you find out financial information on a condo/coop?

For ourselves, we are thinking of Florida or N. Carolina and haven't even started with that search. We sold our home a year ago, and have been renting. Maybe renting isn't so bad in this market.

Jane

Jane_Ny

Why not hire an appraiser privately?

You can hire your own appraisal.

FWIW I found our market (for houses not condos) very confusing as well. It seems strange to me that comps and sales records say that prices have gone up slightly over the last year, yet the inventory of unsold houses keeps increasing. It would seem to me that if inventory was climbing that sellers would lower their price.

I was told that many sellers are just not willing to list their house at the price that would cause it to sell quickly. After analyzing this ad nauseam it seems like around here there are basically two types of houses selling.

There are houses that are listed low, sometimes shockingly low. At our price range very few of these are foreclosures but many are corporate relocations. These houses by and large sell quickly. When we relisted this spring (after being off the market for a few months) we had a contract within a few days as we decided to slash our price.

Then there are houses that may sell for a bit more but they stay on the market 1 to 3 years. These are custom homes on acreage so all our unique. The seller's wait for the buyer who just adores the house. Bear in mind these sellers may not net much more than the low price sellers due to carrying costs of the house while they wait for it to sell.

And, of course, there are more and more houses that just seem to sit there. They aren't priced really low so don't sell but no one has fallen in love with them so they don't sell.

Jane,
For my condo clients, I ask the HOA for the Master Insurance Binder and also the Profit and Loss statement for the last 12 months. Sometimes this request will have to be made by the sellers. Some HOA are glad to hand this info over, some are not.
Also, it is not hard to see which Associations are healthy... look at roofs, common spaces, landscaping, paint and exterior maintenance. The conditions of these things will tell you a lot.
PS... have you looked at Charlotte?

Thanks, NCguy! Actually, I took a look last spring and liked it. N. Carolina is on our list to look. We really hate Florida but have family there. Its hard, at our age, to move somewhere where we don't know anyone.

Our son went to UNC Greensbororgh and we fell in love with the state. Started renting summers in Wilimington for a few years. Great State.

Thanks for the info on the HOA. Will try requesting that. We are looking at a few different areas in NY and I think it would cost too much to have appraisals done on each place we like. We need to narrow down our choices.

Prices are crazy. Either very low or extremely high. Hard to get a feel for what the asking prices should be.

Thanks again for the info.,
Jane

"Actually, I took a look last spring and liked it. N. Carolina is on our list to look."

Rent first in a new area.

Look around for a year.

The market is very odd.

We live in a very small 10 year old development. Two houses were sold here in the last few months. Both are the exact same model. Both very well maintained.

House #1 also has an in ground pool that takes up the entire yard. It also has an extension which is a large rectangular family room. It also has updated appliances and a partially finished basement. Both houses have the same lot size.

House #2 has no pool, no extension. Very gently used house (one resident entire time vs. family with 4 kids); original appliances.

Both were on the market for about the same amount of time. House # 2 a bit longer.

House # 1 sold for 90K more than house #2. House #1 is assessed for only 50K more than house #2.

Go figure.

The market is definitely crazy...not for the feint of heart.

Comps were all over the place when we were purchasing. This made valuation of the home very difficult but it came out OK. We were going to make an offer on a similar house in a different neighborhood but nothing was selling in that neighborhood but foreclosures so my realtor and several coworkers of hers had a very difficult time trying to pin down an offer for the house.

I guess the bottom line is don't overpay. I would say that quite a bit of the confusion lies in the fact that many sellers still think it is 2005 or 2006...not 2011. We ran into more than a few sellers who were absolutely priced too high for the market and were, more or less, delusional about their pricing.

In urban or dense suburban places like you are describing, the neighborhood and its comps change very quickly from block to block. Maybe this is why it has been difficult? Houses even half a mile apart can have very different comps and values. Same with condos.

Once you are serious about a house and putting in an offer, definitely hire a private appraiser. I know you stated you can't afford to pay for appraisal after appraisal. And that is reasonable. But if you are about to make a serious offer do yourself a favor and get the appraisal. You're spending 100's of thousands of dollars in cash on a home. Getting an appraisal on one or two of the homes you aer seriously interested in won't break the bank.

When looking at all the confusion going on you also have to consider the difficulty of getting a mortgage nowadays...even if a home is priced reasonably, it often happens that the mortgage falls through at some point in the process and the home has to go back on the market...and starts to look like a white elephant.

It gets weirder (is there such a word?)...we looked at 6 coops today. All were in the same building. Four were identical, same square footage, same exposure, just different floors. They were priced between $10,00 and $30,000 difference.

This is what I observed. The difference was some apartments were updated more than others. The younger the owners, the more updates but the lowest asking price. The older the owners, less updates and asking more.

I assume the young owners want out fast. They are probably looking to buy a house. They fixed up their apartments and dropped their prices to sell fast.

The older owners are asking ridiculous prices for old apartments. One apartment had appliances which looked like they were from the 50's. Yellow oven, no dishwasher and yellow, formica counter tops. Wall paper everywhere. They priced their unit the highest.

We knew the age levels by the photos. The young couples had wedding photos all around the rooms. Both those apartments looked like they stepped out of HGTV. Beautifully staged, clean as a whistle. Really nice updates. All the appliances were new and stainless. Bathrooms were beautiful. One was striking and had to cost them a fortune to do. Beautiful tile and fixtures. I feel sorry for these sellers because you could see the quality of the updates. They have to be taking a big hit on these places.

There is a glut of condos and coops in our area. They don't seem to be selling which is making me even more nervous. We live in a high-priced area right outside NYC. These coops are within walking distance to the train to NY and parks, shopping, trails,etc. Maybe its too early in the market to judge.

Jane

I agree that the market is very confusing. We are looking in an area where the realtor frequently says the house is overpriced by $100K. I don't want to insult an owner with a crazy offer, but I'm seeing houses that I like that have been on the market for 6-9 months. Others have been on and off the market for over a year. In some cases, the prices have been dropped a bit over time. Some of these houses have things that scare away your average buyer, like a lot of wall paper--nothing major.

Looking at sales records the houses that sold over the last year are selling for their 2005 values, even with extensive updating. Am I risking ticking off an owner if I bid 85% of asking price? Does an owner really leave a house on the market that long and wait for "the right price"?

I'm so glad you asked, I have been thinking the same thing. There are so many coops/condos on the market and nothing is selling. I did some searches and found many have been listed for over 2 years and they haven't reduced their prices. I can't understand except I could see what they paid back in 05, 07.

I can't understand why they just keep sitting on the properties. They could have gotten a better price 2-3 years ago. I don't want to insult someone by offering a price so below their listing. I'm not even sure if my Realtor will agree to it.

I hope someone answers.

Jane

Jane, I do know this much. Your realtor is obliged to present any and all offers. I do hope owners or agents will answer, though.

Hi Jane, It sounds like you're on Long Island, probably looking in great neck?

I'm on Long island too, the market is a bit funky. Coops always have their own set of problems, and generally are harder to sell in the down times than houses.

I wouldnt' assume the younger couple are just looking to dump the place, but since they are probably on teh house shopping side, too they may be more in tune wiht the market compared to the older generation.

Its always easy to offer advice over the internet, but much hard to deal with it in real life. I'd look at it this way. if you sell when the market is at a certian point, and buy at the same point, you're really not hurting yourself too much even if the market tanks.

you could hold off, or give low offers to these people this year and end up at the end of the summer still renting and find out next year the market moved 10% in either direction. that will have you either looking smart, or looking back kicking yourself.

I would look ahead with the idea "How long will we live there?", If it is 10,20 years, this downturn is not so critical. If the home you want suits your needs and you can get it for a what you consider is a fair price then don't worry so much about it. You have to live someplace so why not in something you like and can enjoy.

One thing I have noticed lately is that you can not go by what many of the comps are selling for especially if you are the seller.
Reason is that many places I have seen selling for super cheap are because the house was taking a long time to sell in a market that is flooded with houses and the sellers employer paid the difference as part of a moving expense to relocate the employee.
We just had a house near us sell for at least 40K less than it should because of that, now everybody is going to be expecting surrounding houses to sell for dirt.

"I can't understand why they just keep sitting on the properties. They could have gotten a better price 2-3 years ago. I don't want to insult someone by offering a price so below their listing. I'm not even sure if my Realtor will agree to it.

I hope someone answers."

Here is one reason why properties might be sitting:

'Shadow' condos dim sale outlook
Vast supply of units lurking just off market could slam prices.
By Amanda Fung-
May 23, 2010

A little over two years ago, SDS Procida suspended plans to market The Dillon, its 83-unit Hell's Kitchen condo, when residential real estate tanked. Months later, it faced a second setback: the collapse of the project's lender. With financing for The Dillon now in place and condominium sales picking up, the developer finally put the units on the block three weeks ago.

The Dillon's owners have lots of company. Their building is one of more than a dozen across the city that were once classified as shadow space apartments completed or near completion that are held off the market or temporarily converted to rentals whose owners are now putting them up for sale. While the number of units is small, it is expected to swell later this year, and that has some experts worried.

A link that might be useful:
www.crainsnewyork.com/article/20100523/
REAL_ESTATE/305239970