Foreclosures? 100% Financing: NIMBY: Not in my Backyard - It's a BULL Market!
Manhattan is an island.
There has been much media attention including some great blogs from activerain members like Brian Brady. Many of the headlines are negative some predicting a slow down in the economy the stock market has already become volatile and is in a correction.
I know in many markets the fall out must be terrible. Fortunately in Manhattan nothing can be further from the truth. Our market is on fire. Inventory is very low. We are experiencing multiple bids, no contingencies, full ask and over. I've been receiving calls 15 minutes before a showing that an offer has been accepted, but still showing for backups. I've been trying since Monday to get an appointment with my buyers at a new development for this weekend. They are booked solid. We are on a waiting list for a showing.
Our market is different because 75% of our housing stock is co-ops with stringent financial requirements for purchasing. All properties in NYS require a 10% deposit when the contract is signed. There are not many flippers in Manhattan even though we coined the term back in the early 80's. Lenders can not foreclose on a coop so fast. They have the second lien. The coop corporation has the first lien. Lenders and purchaser's must sign an AZTECH recognition agreement giving the coop first lien.
My good friend and Top REALTOR® in San Francisco and newbie activerain member Gary Small says San Francisco is on fire as well with multiple offers above ASK. Gary knows Noe Valley and The Castro like I know Chelsea and the Upper West Side. We look forward to his first blog.
With all of the talk about sub prime and 100% financing it's never affected me or my business. Fair Housing laws dictate that I can not ask a buyer their race, color, religion, national origin, gender, familial status, marital status, age, disability, sexual orientation or their occupation.
However, I would be remiss if I didn't ask "how are you paying for this purchase"? How much do you have for a down payment? What is your income? Your assets? Your net worth. At some point during the buying process for coops I will require a signed financial statement. Coops require it.
These are tough questions but need to be asked. I don't know if this is practiced outside of Manhattan. A few years ago I was a consumer. I hired a REALTOR® to list my parents house in the suburbs. A great hard working agent. However we would accept offers and after a few weeks we didn't have contracts signed. Each time they didn't have the down payment. I called the REALTOR® and said Don't you find out anything about these buyers. She responded the buyers are another REALTORS® client and all she had was a pre-approval and only lenders ask financial questions. I told her I wanted to know about the buyers. I meant only their finances.
The next day she called and said she was getting an offer from a nice young Irish couple with a baby. I said I want their finances not their ethnicity and familial status. I told her we wouldn't accept another offer until I saw a bank statement with enough for the 10% deposit and a loan commitment letter. Brokers asking financial questions is standard procedure in Manhattan.
Asking the tough questions is better for everyone in the long run. Buying a home is not always right for everyone at the same time. Buying a home is not an entitlement. Buying a home is for people who can afford it and can accept responsibility and risk. In the long haul there is no better investment than real estate. Foreclosures are terrible but for most people who don't have to move in the short term real estate is their best asset.
All markets go in cycles, they correct themselves. It's best to buy and sell in the same market. Hot or cold. It's best to buy when you need a place. I believe the rest of the country housing will pick up soon. If stocks continue to decline I believe that will be good for real estate.
There is always a BULL market somewhere and right now it's in Manhattan and San Francisco.
Any place else?
A bog by: Mitchell Hall
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