Got the security deposit from the previous place, only 20% was removed for cleaning/fixing after living for 5+ years!
Shopping, groceries, stocking up on everything, $350 gristedes yikes. Bagel dozens. Some helpers from duane reade and rite aid as well.
APM = application performance management.
Real estate research, right at the cusp of an offer. Comparing to units that closed in the same building. Sent the wrapup and offer to my realtor before extending to the seller.
Every number in the following analyses is rounded up to favor the seller. I want to be conservative to find my baseline in their favor, and then we can move from that baseline toward my advantage as necessary.
(from yesterday’s notes) S&P has already fallen from 338 to 228 (32.5%) in the past month alone.
The real estate market (as measured by the median home price) dropped from 275k to 193k (29.8%) during the 08 bear.
This one will be worse because the 08 crisis was due to human oversight and had an explicit solution. Health pandemics and their global impact on market are much less deterministic, and last much longer. Prices will continue to fall sharply, and will trend that way for a long time.
If we average the comps in that building by $/sqft, it’s $884/sqft. This makes the 925-sqft unit $818k.
If we average the comps in that building by $/share, it’s $684/share. This makes the 977-share unit $670k.
If we average the comps in that building by $/maintenance, it’s $551 for dollar in closing price / dollar in monthly maintenance. This makes the $1606-maintenance unit $885k.
Incorporating the value of the renovations, let’s include the Instant Value estimate of $930k.
Averaging all 4 of these wide estimates yields a bull value of $825k.
If we model the real estate pattern from the last recession, disregarding the determinism and severity which makes this pandemic worse, 30% off 825k yields a bear value of $578k.
The usual song and dance of bid/ask applies in real estate, same as it applies in professional finance. The fair value of 825 reflects one pole, 578 reflects another. Splitting the difference is 701.5. Rounding up to favor the seller, as with all other numbers in this analysis, yields $705k.
Given that it’s going to get worse as time goes on, and continue to drop if the seller waits, I think this is a fair offer for March 22rd. Each day is going to change this a bit. We’ll see how markets open tomorrow.
The buyer typically extends their first offer with the undertones of willingness to eventually split the difference. If that were the case, I’d offer $580k right now. However, I think this process is offensive to both parties and I’d rather skip the middle steps and just offer an inflexible $705k directly.
