More offer calculation with Peter. Comps to post-war gramercy/flatiron units during previous recessions. Looks like co-ops dropped 15% not 30% – they’re subject to board approvals and much more than lenders alone, so they weren’t hit as hard during the housing crisis.
Reiterating that remote work culture is the future; been saying it for a while, but covid-19 is certainly forcing the acceleration of its necessity.
ACH purchase offer proceeds to bank for house down payment.
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.
Signed up with Zoom. Video with nick eric frank qq last night.
Did some research on homebuying during a recession. Prices and rates go down. Risk goes up due to unemployment, etc. It’s the same as buying stock during a drop.
The 925 gramercy spot has been on the market for about 2 weeks now. Offer 725? These are weird times to navigate, start very low. Not gonna be (m)any buyers. S&P has dropped 32% in the past month, this is offer is ~20% below ask. It’s going to keep getting worse.
1.5T is basically just offering to buy back treasury bonds. Technically a 30day loan for cash with zero interest, but can be permanent with no change. It was undersubscribed, which means that 1.5T was sufficient for the banks and everyone, at least in the immediate future.
36 apt packages upgraded on my laptop. Updated repos.
Listened to couple npr planet money podcasts.
Tried to place an amazon fresh order, no slots available. It only shows 1 week.
Downloaded and made account with lyft so I could use citi bikes.
Walked 5 miles down to and around Gramercy to check out the prospective neighborhood. Took a little over 2 hours.
Lexington between 27th and 29th looks like a little india!! Maybe 20 restaurants and spice markets and stuff!
The walk to work is 1.5 miles, took 30 min.
Homebuying timeline: offer this week, settle on numbers, sign contract first week of april, home inspection, bank appraisal, submit package to board by apr 20, they review at meeting may 11, finalize/clear/close, move in by end of may.
Got street meat for the first time, chicken and falafel over rice and salad.
Background watched carriers and dream house.
Talked to Harner, Sean’s friends, Allie, zoom with LA folks.
Cleaned, laundry, sheets.
Removed robinhood from mint. Added td.
Submitted the cancellation request with southern california edison, my old utilities provider. It will cancel on 3/23, monday. Usage was very low after I left, so 3 weeks of empty service didn’t cost much.
Netflix asked to remove HD streaming to consume less bandwidth during these weird times.
Picked up computer and set up my wfh workstation. Bought a power strips. Didn’t need a desk or a chair, figured out a decent layout from the couch. Successfully established the vpn connection with f5 and rdp-ed into my actual desktop.
Github bought npm! Unknown amount.
Governor Cuomo announced NY lockdown today. Citadel = essential personnel.
Called a peter-referred attorney for the home closing. Introduced with Jay, got some info, clear to move forward on that front.
Talked with Peter. He’s gonna do some research with the listing agent for the Gramercy place. I need to think about my offer. Corona will definitely reduce the price. Maybe 10%? Need to revisit the area and lock down the attorney. Expect the interest rate to drop below 2 as well.
Stimulus checks of over 2k could be distributed to each american.
Window washers circled my apartment while I was wfh. I could never do that job. The heights are terrifying. He did one vertical slice and skipped the rest?
TP hoarding is weird. Unlike hand sanitizer or other consumables, your usage won’t change. Therefore the longterm business impace won’t change, sales will just spike now and lull accordingly later.
UFC postponing the next 3 events, but keeping the 4th (Khabib/Tony) on schedule for Apr 18th (one month).
Watched don’t f*ck with cats. Got extra mad when he killed the dog tho.
Tripped the level 1 circuit breaker -7% again today.
Webex is obviously seeing increased load worldwide as most offices become remote. This caused a lot of degraded performance today.
On a more general note, I think the push toward remote work culture is good. This is a coerced change, and is batched way too large, but provides good insight. In the future, we should incremental move toward this state, but maintaining steady equilibrium with each step.
“Only when the tide goes out do you discover who’s been swimming naked.” Interesting relevance to the airlines right now. Been doing fine for years, but spending >95% of free cash flow on buybacks, and now can’t survive a few months of adversity. Maintaining liquidity to cover debt during a downturn = an emergency fund, but for corporations instead of individuals. Smart.
A little self perspective during these crazy times: Every human across the globe is struggling with a worldwide pandemic and an economic recession of almost unprecedented decline. A rare event – once in a lifetime, if we’re lucky. On top of these ubiquitous problems, I have moved across the country, started a new job, dealt with no familiarity, no friends, long distance, new coast, new weather, new office, new apartment, new routines in every short-term habit and long-term hobby. It’s overwhelming, but I’m able to recognize that these additional uncertainties shroud blessings, not rights. I’m not dealing with a dying relative. I’m not fighting hunger. I’m not ailing from poor health, lack of income, or other fundamental struggles. There’s much to be thankful for, even in this strange valley.
Reached out to realtor about these lockdown times. The prices will definitely trend down, same for rates.
Remember tar -xzvf. x=extract, v=verbose, f=file. z is only sometimes necessary, it’s for gzip format.
Tom Brady to the Buccaneers??
Reinstalled the stock rdp client for ubuntu Remmina.
Went to ues to meet a colleague and get monitors for home setup. Chatted motorcycles and talked shop for a bit.
Checked mail at home, got my first nyc post!
Got the AAA letter to verify the mileage for the Ducati and BMW odometer readings. I’m about to modify my vehicle situation, maybe remove insurance, maybe switch providers since I’m in a new state, we’ll see – gonna hold on the odo response for now.
