5431 Via Del Sole is a beautiful newer home in upscale East Amherst, NY, an area ranked by Money Magazine as one of the best places to live due to high incomes, an excellent school system, and being the affluent part of one of the safest towns in the US. Wow! Even better, the suburbs of Buffalo are reported to be among the few places experiencing appreciating real estate – steady as she goes people are fond of saying, we do not experience the highs or the lows…..But reality paints a different picture. 5431 Via Del Sole was purchased in April 2003 for $383,000. This home was and continues to be well appointed, clean, with high ceilings, brick exterior, great in-ground pool, view of the lake, hardwood floors, columns, etc. With 5% annual appreciation compounded over four years one would expect this home to appreciate at least $80,000 resulting in a sale price of $465,000. I see it went on the market in August of 2007 and languished for almost six months. Its final sale price in January 2008?: $387,000. Factor in probably $23,200 in real estate agent commissions, $3,483 in transfer taxes, another $1,000 for search, survey and legal. The seller here lost about $25,000. Not to mention the mental anguish as September rolled around with no sale, followed by Oct., Nov, December, into January.
Okay, one example you say. Must have been something wrong with that house. Just down the street from my home in Forest Heights, a mature development of about 160 larger homes with treed lots, 329 Timberlane, a 4000 square foot brick home, was purchased in 1998 for $308,000. The owners put some money into renovations and updating, as I was in the home before and after the purchase. Again, using a 5% annual appreciation, we would expect this home to appreciate about $200,000 over a nine year period. It was put up for sale in the Spring of 2007 and also languished on the market almost six months. It finally sold in September of 2007 for $309,000. No appreciation! Even after nine years. After factoring in $19,000 real estate commissions, $2,700 transfer tax, and closing costs, these people lost $23,000 before considering the money they put into their home.
The owner of 26 Eastview Terrace in Fairport, an affluent eastern suburb of Rochester, put her home went on the market for $299,900 in June of 2007. It finally sold for $265,000, about $35,000 less than the asking price. Commissions were about $15,000. Carrying costs for mortgage, taxes, and utilities and closing costs also applied. So this seller walked away with somewhere in the $240,000’s. A far cry from $299,900.
So what is this about? How come we keep hearing that Buffalo and Rochester are appreciating? Why are we being told “we do not experience the highs and the lows of other places.” Tell that to the sellers above. I read only positive reports about the local real estate market in the local papers. Who is writing these reports? Why? What is going on here? I just read an interesting article on the Internet about a survey showing 77% of respondents believe their home has appreciated (or at least held the same) notwithstanding evidence to the contrary.
Yet, the owners of 15 Hunt Club in Mendon, an area south of Rochester, sold their home with America’s Choice for $469,000 in only a few months; it was their third home sold with us. The owners of 931 Girdle in Elma, south of Buffalo, informed me that they sold their home for just under their asking price of $239,000 in less than 30 days. They listed with us on January 13, 2008. I met with the seller who informed me that she had multiple interested parties. It was her second home sold with America’s Choice. A seller just informed me that he went on market with us Saturday of last week. He received an offer on Saturday night from a person who received an email alert the day he listed with us, and now he has a second offer. What was the common factor for these sellers? What accounts for the drastic difference in the experience of these sellers to those discussed above? Ever hear of the term “buying a listing?” Can it be institutional? By institutional, I mean do the reports about our market paint a true picture? Or are the reports based upon faulty information or faulty analysis of the information. Or worse, are the reports a deliberate attempt to influence sellers to take inappropriate action with regard to the sale of their home – not by individual agents, rather by an entire industry. I just read an interesting discussion of this topic on another real estate blog. I’d like to explore the concept of institutional “buying of a listing” further. For now, think about it. I’ll answer the question as to what accounts for the great difference in selling experience in a later post.
