Jackson Heights Life

Get Connected => Real Estate & Home Improvement => Topic started by: JHALUM on September 07, 2020, 09:32:04 PM

Title: Current Real Estate Market
Post by: JHALUM on September 07, 2020, 09:32:04 PM
How is the current real estate market in Jackson Heights?  I see quite a few listings in the area and I have anecdotal evidence that a  lot of people are moving out of the area.  I know the  Catskill and Pocono real estate markets are currently red hot.
Title: Re: Current Real Estate Market
Post by: dssjh on September 08, 2020, 12:19:20 AM
people are moving out and being replaced, judging by what i've seen. remember, our neighborhood is still a comparative bargain inside NYC. and despite what doomsayers are floating, NYC isn't likely to turn into Detroit or Schenectady anytime soon.
Title: Re: Current Real Estate Market
Post by: pynchoff on September 08, 2020, 07:30:38 AM
I spent a year in the poconos one weekend.
Title: Re: Current Real Estate Market
Post by: lalochezia on September 08, 2020, 07:53:03 AM
I spent a year in the poconos one weekend.

 8)
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 08, 2020, 11:15:24 AM
Real estate prices are decreasing across the board in NYC.

Including in Jackson Heights.

Maybe up to 10% at the moment?

We are part of NYC. Not separate in any way.

What happens to NYC happens to us.

Thinking any other way is parochial.

Title: Re: Current Real Estate Market
Post by: r on September 08, 2020, 09:06:30 PM
Real estate prices are definitely not decreasing evenly in NYC.

Tiny Manhattan apartments which are pointless to live in now with everything around them closed or dangerous have been losing a lot more value than other parts of NYC.

Jackson Heights prices seem pretty flat so far, sometimes up a little, sometimes down a little. Houses/townhouses/etc are especially in demand. Apartments might be a little down, although there are probably a lot of people still drooling over how big the apartments are here compared to Manhattan.

And most of the shops and restaurants are still open here, which is pretty handy
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 09, 2020, 01:14:17 AM
If only WISHING things were true made them true...

For everything. Including real estate.
Title: Re: Current Real Estate Market
Post by: r on September 09, 2020, 02:39:52 AM
It sounds like you are wishing for things to be worse than they actually are  ::)

Take a look at sale prices on Redfin if you want some data. Redfin actually says sale prices in Jackson Heights are up 13% over last year. The prices are down 40% in Manhattan though.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 09, 2020, 08:43:39 AM
The figures that matter are what's happening NOW.

As this endless pandemic unfolds.

In a few months the situation will become clearer and numbers from pre-Covid times will dissipate.

From my observation...re:real estate whether going UP or DOWN.

First Manhattan...then Brooklyn...then Queens some time later. (Then the Bronx etc)

For the future...look to Manhattan when it comes to real estate...it predicts what will happen to Queens...months or even years later. UP or DOWN.

Separation from the rest of NYC is bizarre to me. Is it some type of "exceptionalism" thinking?



Title: Re: Current Real Estate Market
Post by: r on September 09, 2020, 09:00:14 AM
There used to be a lot of good reasons to prefer living in Manhattan to the rest of NYC but over the past 6 months those reasons have mostly all ceased to exist. It doesn't seem so strange for prices in Manhattan to be behaving differently now.

I agree that prices in Jackson Heights could fall over the next few years (probably - but who knows). But they haven't really changed so far.
Title: Re: Current Real Estate Market
Post by: JH3525 on September 09, 2020, 09:06:27 AM
abcdefghijk:  I listed my 1 BR Jackson Heights cooperative apartment 5 weeks ago.  If I had listed prior to the Pandemic, I would have listed for $479,000.  Its listed for $439,000.  It's been shown 4 times by realtors without success. 

I have no idea where the bottom is and neither does anyone else.  I agree that it will be clearer in a few months.

 

Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 09, 2020, 09:15:22 AM
abcdefghijk:  I listed my 1 BR Jackson Heights cooperative apartment 5 weeks ago.  If I had listed prior to the Pandemic, I would have listed for $479,000.  Its listed for $439,000.  It's been shown 4 times by realtors without success. 

I have no idea where the bottom is and neither does anyone else.  I agree that it will be clearer in a few months.

 

Yes. Unfortunately wishful, exceptionalist thinking isn't going to achieve pre-Covid levels of real estate prices.
Title: Re: Current Real Estate Market
Post by: agentarmen on September 09, 2020, 05:00:02 PM
Hi everyone,

It's hard to speak about the market as a whole now, but I can speak from direct experience with our own Jackson Heights portfolio.

Recently, most (not all) our properties traded with a 20-30k discounts in comparison where they would have traded before the pandemic. They all started listed at pre-pandemic prices. Some sellers also adjusted pricing in 20-30k range. As more properties sell and come on/off market, we will be able to tell IF we are on continuous downward trajectory OR the 20-30k range is the extent of the COVID era market correction.

Ahead of us are elections, hopefully a vaccine and what will ultimately be the post-vaccine economic report. These are all moving parts that based on outcome, will move the market needle.
Title: Re: Current Real Estate Market
Post by: r on September 11, 2020, 05:37:36 AM
Are you mostly listing smaller co-op apartments?

I wonder why Redfin and Zillow think that prices are still up overall in Jackson Heights. Besides buyers driving up prices of houses/townhouses/etc, maybe more larger homes are being sold in Jackson Heights than usual?
Title: Re: Current Real Estate Market
Post by: jh_coop_buyer on September 11, 2020, 08:05:50 AM
20-30k out of 400k-700k is like 5%. It’s a tiny drop after the huge buildup of the price in Jackson Heights
Title: Re: Current Real Estate Market
Post by: JHResident on September 11, 2020, 08:37:55 AM
20-30k out of 400k-700k is like 5%. It’s a tiny drop after the huge buildup of the price in Jackson Heights
Unless you're the one out the 30k.  :'(
On the bright side, if you're moving, maybe your destination has had a similar or worse price deflation. Good luck to the OP.
Title: Re: Current Real Estate Market
Post by: jh_coop_buyer on September 11, 2020, 11:29:22 AM
20k-30k is only a problem for a recent purchaser in Jackson Heights.

The real problem for the real estate is the non-liquidity.

Right now, very few people want to enter the market.

Just using my own apartment as an example, the price has been doubled after the past seven years. I'm even willing have to 10% drop if it can be sold right away so that I can purchase a bigger apartment with the proceeded sale.

However, if I put the apartment for sale, it is going to be involved with a lot of work. Say with 10% drop and some buyer jumped in. Due to the long process, if the buyer wants to back down his purchase due to the price further drop, (there is some legal protection to prevent this to happen, but I'm not going to be dragged into a legal battle who only profits the lawyers),  I'm back to square one. 
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 11, 2020, 01:25:43 PM
A falling real estate market means buyers wait because they are predicting further falls.
That's the market we are in now.

All of NYC! Not just Jackson Heights!

Title: Re: Current Real Estate Market
Post by: r on September 15, 2020, 02:09:45 PM
This is about rent prices instead of sale prices, but FYI

https://www.thecity.nyc/housing/2020/9/10/21430039/what-rent-drop-listed-prices-arent-budging-where-covid-19-hit-hardest

Quote
Between February and July of this year, rents fell by 1.9% in the zip codes with the lowest COVID-19 rates in the city, like Battery Park City, Greenwich Village and Tribeca.

However, in the neighborhoods with the highest rates of COVID-19, per city health department data — East Elmhurst, Corona and Jackson Heights topped the list — advertised rents have climbed a bit in the same time period, rising 0.3%.

...

Williams warned against using Manhattan trends as a stand-in for the housing story in the rest of the city. To do so ensures people elsewhere are “rendered invisible,” she said.

“When you see this narrative of everybody is leaving the city, and rents are dropping … and you live in a community where people aren’t leaving, people are trying to figure out how to make things work day to day, where there’s very little affordable housing and you don’t have a whole lot of options to go anywhere else if you wanted to — it’s incredibly frustrating,” she said.
Title: Re: Current Real Estate Market
Post by: ljr on September 15, 2020, 04:00:09 PM
I know someone with a large, highly desirable apartment in JH who recently listed it for sale--and had a buyer lined up right away. This narrative that has "everyone" fleeing NYC seems quite exaggerated. The only people I know who are leaving are doing so to be closer to family--kids or parents--at a time when travel has become more difficult. Not because NYC is "dead". The person who listed their place is not leaving NYC either--only moving to a larger space (a house) in another neighborhood.
Title: Re: Current Real Estate Market
Post by: STomkiewicz on September 16, 2020, 10:03:16 AM
At present, there is a shortage of inventory in Queens county and therefore new listings are selling quickly and usually at asking price or above.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 16, 2020, 10:42:50 AM
A real estate agent who works in Jackson Heights real estate, Armen Meschian, has already commented in this thread with facts concerning the real estate market in Jackson Heights. Now. Prices are down. (He should be thanked for being truthful)

And yet still folks are determined to self-delude with their rationalizations concerning this topic.

Once again, facts become irrelevant as wishful thinking prevails.

It seems to me that folks would often rather shoot a messenger than accept the message.
But even with a dead messenger, the message doesn't change.





Title: Re: Current Real Estate Market
Post by: r on September 16, 2020, 11:39:50 AM
You are the one ignoring facts and generalizing.

It looks like Armen has only been selling 1 and 2 bedroom co-op apartments. It makes sense that prices for these might be flat or slightly down. But if you want to talk about Jackson Heights in general, you need to include houses/townhouses and larger apartments, which are in higher demand right now. Redfin and Zillow say that prices are up overall in Jackson Heights, probably because of sale prices of larger homes.
Title: Re: Current Real Estate Market
Post by: JH3525 on September 16, 2020, 12:07:59 PM
According to the realtor that has my 1 BR listing, houses in Jackson Heights are doing well but not cooperatives especially studios and 1 BR's.  Since I listed 42 days ago, I've reduced my price three times for a total of $30,000.  Its just 42 days, so I remain patient.   If the cooperative market continues to remain weak, I'll remove my listing late next month. 
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 16, 2020, 12:17:08 PM
You are the one ignoring facts and generalizing.

It looks like Armen has only been selling 1 and 2 bedroom co-op apartments. It makes sense that prices for these might be flat or slightly down. But if you want to talk about Jackson Heights in general, you need to include houses/townhouses and larger apartments, which are in higher demand right now. Redfin and Zillow say that prices are up overall in Jackson Heights, probably because of sale prices of larger homes.

I'd say the number of co-ops in Jax Hts...1 and 2 bedroom far outnumber other properties. By a lot.

One and two bedroom co-ops would be the vast majority of Jackson Hts real estate. Including in the historic district. Again, Armen should be thanked for being honest to the majority of Jackson Hts real estate owners.
Title: Re: Current Real Estate Market
Post by: ljr on September 16, 2020, 01:14:15 PM
Categorizing 1 and 2 bedroom apartments together makes no sense. One-bedrooms have always been harder to sell to my knowledge--I think there are more of them (high supply, less demand) and larger units are more desirable in general, even more so with work and school at home for the time being. So 2-bedrooms would sell faster than 1-bedrooms or studios. The unit I mentioned in this thread is a 3-bedroom, and those are still snapped up quickly. I will be interested in the ultimate price--the listing was just as high as it would have been before the pandemic.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 16, 2020, 01:20:01 PM
So much wishful thinking.
So much rationalizing.
So little accepting the new reality of the recession/depression we are currently entering.

The canaries in the coal mine (the current decreases) are simply the harbingers of the gas explosion ahead.

But in 3-5 years I guess, things will turn round again. So folks will simply have to wait for their wish fulfillment to come true.
Title: Re: Current Real Estate Market
Post by: r on September 16, 2020, 01:37:26 PM
Putting prices aside for a second, I wonder if we will see more small apartments being combined together to form larger ones.

Like this cool duplex from a few years ago:

https://streeteasy.com/property/1090345-35_45-78-street-4353
Title: Re: Current Real Estate Market
Post by: JH3525 on September 16, 2020, 01:56:28 PM
r:  I just recently became aware of two 4 BR 3 BA combined apartments at the Towers that's a 3,000 SF duplex.  Imagine living in an apartment with 8 BR's & 6 BA's.  I understand that it was combined many years ago.  I'm not certain it would be allowed today.   
Title: Re: Current Real Estate Market
Post by: ljr on September 16, 2020, 02:20:36 PM
Alphabet person is hilariously determined to spread gloom and doom as far as possible. Facts would include actual quick sales at high prices. An apartment in my building closed in June at the price it was listed at before the pandemic. This is not wishful thinking
--this is a fact. I have no doubt that sale prices overall will go down, but it's not as dire as you depict, not necessarily.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 16, 2020, 02:53:22 PM
Alphabet person is hilariously determined to spread gloom and doom as far as possible. Facts would include actual quick sales at high prices. An apartment in my building closed in June at the price it was listed at before the pandemic. This is not wishful thinking
--this is a fact. I have no doubt that sale prices overall will go down, but it's not as dire as you depict, not necessarily.

It's only doom and gloom for those who already own property.

For those wanting to buy into the market at a cheaper price, (first time younger buyers) it's actually great news.
Title: Re: Current Real Estate Market
Post by: lindsey on September 16, 2020, 04:42:39 PM
The City has some interesting reporting on this question, though looking at rents, not home sales. Basically, rents are falling in Manhattan but increasing everywhere else, including those neighborhoods hardest hit by Covid-19 (hello, Jackson Heights). The money quote:

“When you see this narrative of everybody is leaving the city, and rents are dropping … and you live in a community where people aren’t leaving, people are trying to figure out how to make things work day to day, where there’s very little affordable housing and you don’t have a whole lot of options to go anywhere else if you wanted to — it’s incredibly frustrating.”

https://www.thecity.nyc/housing/2020/9/10/21430039/what-rent-drop-listed-prices-arent-budging-where-covid-19-hit-hardest
Title: Re: Current Real Estate Market
Post by: Shelby2 on September 16, 2020, 05:19:21 PM
Alphabet person is hilariously determined to spread gloom and doom as far as possible. Facts would include actual quick sales at high prices. An apartment in my building closed in June at the price it was listed at before the pandemic. This is not wishful thinking
--this is a fact. I have no doubt that sale prices overall will go down, but it's not as dire as you depict, not necessarily.

Someone on the JH FB group posted that his building just had a record price for a unit. I'm not sure which building, though, or the price. But record price sounds promising :)
Title: Re: Current Real Estate Market
Post by: abcdefghijk on September 16, 2020, 06:32:31 PM
Alphabet person is hilariously determined to spread gloom and doom as far as possible. Facts would include actual quick sales at high prices. An apartment in my building closed in June at the price it was listed at before the pandemic. This is not wishful thinking
--this is a fact. I have no doubt that sale prices overall will go down, but it's not as dire as you depict, not necessarily.

Someone on the JH FB group posted that his building just had a record price for a unit. I'm not sure which building, though, or the price. But record price sounds promising :)





 

Shelby, you mean this comment from Facebook?

"our building just had a record price listing for a unit"

A price listing is very different to a sale.

In the same posting there's this comment on Facebook.

" I’ve been doing real estate in the area for years and lived there for 38 years.. Rental rates are def down, so are sales."

This grasping at straws is crazy. In 3-5 years, the downturn will revert. So no need to really worry.

Like I said before, this will be great for younger folks to be able to buy something at a lower price point. Like for those who were able to afford to buy in JH after the last recession when prices plummeted.
Title: Re: Current Real Estate Market
Post by: Shelby2 on September 16, 2020, 07:40:22 PM
Alphabet person is hilariously determined to spread gloom and doom as far as possible. Facts would include actual quick sales at high prices. An apartment in my building closed in June at the price it was listed at before the pandemic. This is not wishful thinking
--this is a fact. I have no doubt that sale prices overall will go down, but it's not as dire as you depict, not necessarily.

Someone on the JH FB group posted that his building just had a record price for a unit. I'm not sure which building, though, or the price. But record price sounds promising :)





 

Shelby, you mean this comment from Facebook?

"our building just had a record price listing for a unit"


Yes, that's the one, and you're right, I thought he was referring to a closing price.
Title: Re: Current Real Estate Market
Post by: Matt on September 30, 2020, 09:47:53 PM
I can only speak about co-op apartments - I'm noticing that those sellers that are willing to reduce their asking prices are selling their apartments and those that are defiantly sticking to pre-pandemic pricing are not. 1 bedrooms in desperate need of a renovation shouldn't be asking over $400,000 in Jackson Heights now and I'd argue that they shouldn't have been last year. I think the market got ahead of itself.

Most apartments that sold in the second quarter of this year likely were in contract pre-pandemic. An apartment in my building went into contract in October and did not close until May. I'm guessing there were other factors that delayed the closing, but the pandemic definitely didn't help. I was surprised by the relatively high price that apartment sold for. A similar apartment in my building closed in August for about 20% less. I'm not sure when that one went into contract.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on October 01, 2020, 09:44:50 AM
I can only speak about co-op apartments - I'm noticing that those sellers that are willing to reduce their asking prices are selling their apartments and those that are defiantly sticking to pre-pandemic pricing are not. 1 bedrooms in desperate need of a renovation shouldn't be asking over $400,000 in Jackson Heights now and I'd argue that they shouldn't have been last year. I think the market got ahead of itself.

Most apartments that sold in the second quarter of this year likely were in contract pre-pandemic. An apartment in my building went into contract in October and did not close until May. I'm guessing there were other factors that delayed the closing, but the pandemic definitely didn't help. I was surprised by the relatively high price that apartment sold for. A similar apartment in my building closed in August for about 20% less. I'm not sure when that one went into contract.

20% decrease sounds about right.
Title: Re: Current Real Estate Market
Post by: JH3525 on October 01, 2020, 10:42:20 AM
First time buyers of coop's who purchase studios and 1 BR's are gone.  I listed my 900 SF 1 BR 56 days ago and have reduced the price 4 times.  My realtor has not received even one phone call.  I'll lower it again next week for the 5th time.  I have no idea where the bottom is.  We could be returning to prices prior to 2016. 


Title: Re: Current Real Estate Market
Post by: CaptainFlannel on October 02, 2020, 09:41:08 AM
^do you think it possible the closing on the apartment was delayed due to the pandemic and the price reflects a pre-pandemic offer? I'd be curious what someone knowledgeable about real estate contracts would say about if Covid could be a legit reason to break a contract and get a deposit back?

An apartment in my coop sold in July for a price that reflects closing prices from early this year. I wonder if the offer was made in Feb/early March or possibly earlier. I recall it took us a good 3+ months to go from offer being accepted to closing on our apartment.

Quote
An apartment in my building closed in June at the price it was listed at before the pandemic.
Title: Re: Current Real Estate Market
Post by: JH3525 on October 02, 2020, 10:08:15 AM
Captain Flannel:  If the listing you mentioned in July was in streeteasy.com, visit the website, enter the address of the building and click "Past Sales".  Click on the apartment (scroll down) and the listing will indicate the date it was listed, contract date and closing date. 
Title: Re: Current Real Estate Market
Post by: CaptainFlannel on October 03, 2020, 06:25:50 AM
^thanks for the tip. It wasn't on StreetEasy, but I did find it listed as sold on another site with less than 80 days on the market. So if closing date was in July, I guess that means it went on the market some time in May-ish.
Title: Re: Current Real Estate Market
Post by: r on October 04, 2020, 07:03:31 AM
It might be a long time before studios and one bedrooms become easier to sell. People need space, and separate rooms to use as offices.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on October 04, 2020, 01:54:15 PM
There are 3.4 million apartments in NYC.

At least 1/3 would be 1 bedroom or studios. (Maybe up to 1/2?)

What people might need and what is available in NY are two very separate things.

My opinion. There's a recession. Prices drop. Sellers must adjust their expectations.

People looking for space, (real space not an extra few square feet)  leave (and have left or are considering leaving) the urban environment of NY. Which definitely includes JH. 

Anecdotally, pals of mine (30's) who may have previously bought 1 bedrooms in NY,...including JH... have decamped to buy big cheaper properties in non urban areas. Where they do have real space for an office. And kids. Etc. They are the market for NY 1 bedrooms...starter apartments... (or 2 bedrooms) and they are leaving...


Title: Re: Current Real Estate Market
Post by: lindsey on October 09, 2020, 02:37:34 PM
Anecdotally, pals of mine (30's) who may have previously bought 1 bedrooms in NY,...including JH... have decamped to buy big cheaper properties in non urban areas. Where they do have real space for an office. And kids. Etc. They are the market for NY 1 bedrooms...starter apartments... (or 2 bedrooms) and they are leaving...

How common is the practice of combining adjacent studios or 1-bedrooms to make a more family-sized unit? I've heard of it happening a few times but if this could become more common, maybe would make it easier for families to buy and stay in the neighborhood.
Title: Re: Current Real Estate Market
Post by: abcdefghijk on October 09, 2020, 04:48:43 PM
Anecdotally, pals of mine (30's) who may have previously bought 1 bedrooms in NY,...including JH... have decamped to buy big cheaper properties in non urban areas. Where they do have real space for an office. And kids. Etc. They are the market for NY 1 bedrooms...starter apartments... (or 2 bedrooms) and they are leaving...

How common is the practice of combining adjacent studios or 1-bedrooms to make a more family-sized unit? I've heard of it happening a few times but if this could become more common, maybe would make it easier for families to buy and stay in the neighborhood.

I know it does happen but I imagine that two maintenance charges per month (one from each unit) becomes prohibitive pretty quick.
Title: Re: Current Real Estate Market
Post by: hum@njukebox1 on October 09, 2020, 05:53:15 PM
That depends.  If I combined with the unit next to mine, I'd have 3 good sized bedrooms, 2 baths, living room and dining room.  Combined maintenance would be @ $800 which I'm guessing is quite a bit lower than most 3 bedrooms.  Would run into extra costs renovating......especially turning one kitchen into a bedroom.
Title: Re: Current Real Estate Market
Post by: lalochezia on October 09, 2020, 06:26:22 PM
Sometimes it's as simple as knocking a wall through; other times....not.

 Sometimes co-ops are fine with it, other-times...not.

It's not as simple as just buying two places, that's for sure

https://www.cityrealty.com/nyc/market-insight/features/get-to-know/combining-apartments-nyc-6-things-you-should-know/36202

https://www.brickunderground.com/content/how-much-does-it-cost-combine-apartments-new-york-city

e.g "New Yorkers are only permitted one kitchen per apartment—although an exception may be made you have a letter from a rabbi saying that you need a separate, kosher kitchen."
Title: Re: Current Real Estate Market
Post by: ljr on October 09, 2020, 06:33:10 PM
Well....how would the city know if you combined two apartments and kept both kitchens? (Shhh...I know someone who did. They just opened up a wall to combine, no other construction at all. It's still two apartments with an opening between them.)
Title: Re: Current Real Estate Market
Post by: lalochezia on October 09, 2020, 06:40:34 PM
If they wanna sell it as one apartment that might get tricky.
Title: Re: Current Real Estate Market
Post by: ljr on October 10, 2020, 12:44:14 AM
They don't want to sell it as one apartment. I think they figure that selling two apartments would yield more money. Each of the  apartments has 2 bedrooms/2 baths. They just put the wall back up if they ever want to sell.
Title: Re: Current Real Estate Market
Post by: carrefour_ny on October 10, 2020, 03:57:49 PM
Armen, I wonder if you can comment on appraisals. Are properties appraising below pre-pandemic levels, and if so, by how much? Thanks for your perspective.


Hi everyone,

It's hard to speak about the market as a whole now, but I can speak from direct experience with our own Jackson Heights portfolio.

Recently, most (not all) our properties traded with a 20-30k discounts in comparison where they would have traded before the pandemic. They all started listed at pre-pandemic prices. Some sellers also adjusted pricing in 20-30k range. As more properties sell and come on/off market, we will be able to tell IF we are on continuous downward trajectory OR the 20-30k range is the extent of the COVID era market correction.

Ahead of us are elections, hopefully a vaccine and what will ultimately be the post-vaccine economic report. These are all moving parts that based on outcome, will move the market needle.
Title: Re: Current Real Estate Market
Post by: agentarmen on October 12, 2020, 05:28:22 PM
Armen, I wonder if you can comment on appraisals. Are properties appraising below pre-pandemic levels, and if so, by how much? Thanks for your perspective.


Hi carrefour_ny ,

Just saw this, looks like you asked a couple of days ago. Appraisals really are divided into purchase appraisals and bank refinance appraisals. In a purchase it's a bit simpler, because in a purchase we have a contract price, which the bank appraiser must justify by comps and agree with contract price value.
Title: Re: Current Real Estate Market
Post by: agentarmen on October 12, 2020, 05:51:16 PM
Sorry, got cut off and had to repost:


Armen, I wonder if you can comment on appraisals. Are properties appraising below pre-pandemic levels, and if so, by how much? Thanks for your perspective.


Hi carrefour_ny ,

Just saw this, looks like you asked a couple of days ago. Happy to answer.

Appraisals really are divided into purchase appraisals and bank refinance appraisals. In a purchase it's a bit simpler, because in a purchase we have a contract price, which the bank appraiser must justify by comps and agree with contract price value. In refinance appraisals, the value is pulled through a "lottery" of similar comps. I find refinance appraisals to be far more conservative than purchase appraisals.

One very important point: It's important not to mistake an appraiser's price opinion for market value. Only buyers' value perception drives the actual market value of an apartment.

Since most of last 6-12 months sale closings are of units that entered contract PRE covid, those comps are very healthy and do not reflect the impact of the covid dip. As more post covid deals close, harder it will be to drum up comps as values begin to rise again.

I am wondering however, what position lenders will take on comp properties that went into contract and closed during the pandemic. If they will look at them at face value, or factor in a credit for pandemic era dip. I think that will depend on how soon we will see a rise in prices after end of the pandemic. If say pandemic ends and prices remain unchanged for another year or so, then those comps will likely be taken at face value.

Globally, for now, I can say that we don't have underappraisal concerns on properties that sell at a slight discount during covid. Those prices are easy to justify due to past 6-12 month closings.

I hope this is helpful.

Warmly,
Armen