HIB commenter submitted this guest post about his recent visit to an open house in Plainview.
Spouse dragged me to an Open House on a Plainview split-level over the weekend. Listed at $425,000, low for the area, I guess. Nonetheless, my strongest thought was that the slimy used-house salesman should be sued for malpractice for listing it that high.
As I approached the house it reeked of neglect. The first thing that caught my eye was the row of bushes along the side of the house with a line of ice draped across them looking like it was the goal line in a football game I’d rather have been watching. Looking up told why… there was no gutter along the edge of the roof. One need only wonder where else the runoff water was lurking. The aluminum siding on the front of the house was faded, accented only by the rust/paint stains that ran down several feet from each shutter, themselves hopelessly faded. The shutters and stains showcased the windows in dire need of replacement.
Inside was no better. Grandma sat in the living room breathing oxygen with her nurse at her side. The family must have been hoping to get enough to pay off the last refi and get Grandma into a nursing home. They had clearly done nothing to make the place show-ready. Small rooms and closets were highlighted by the fact that the latter were boxed-out and the former were piled high and deep. The flooring, appliances, cabinetry, window A/Cs, were all in decrepit condition. Little if any of it touched in the 60 years since construction, save for layer upon layer of paint, the last coat of which was too long ago. If it was located anywhere BUT the most overpriced suburb in the country, it would have been a complete tear-down job — and it may yet be.
The sad thing is that the owner (her family?) fail to realize that they actually sold the house piece by piece over the years in deferred upkeep. Don’t want to spend $3k to replace the gutter? Don’t want to replace the siding for $8k? Windows for $5k? Don’t want to update the appliances? Or stain/seal the floors? Just put it on the bill, which comes due on sale, right out of the price. Pay now or pay later.
We saw this one and another open house that was admittedly in much better condition, though itself still horrendously overpriced considering what we’re currently renting that essentially the same living space at 1/3 the monthly cost, in a location at least 20 min. less commuting time to Manhattan.
I was concernd that the spouse was caving just when the market itself was beginning to move our way. Fortunately seeing these two houses convinced her to do two things: 1) Start looking for better/cheaper rentals than what we currently occupy, and 2) look for those rentals off of Long Island.
Thanks for posting my trip report, Gary.
Unlike you, who seems committed to this place, I was not born here, and have convinced the Spouse (who was) that “Phallus, NY” as I’m prone to call it, has its best days behind it. My story is an escape from Long Island.
Spouse made good on her promise to look for rentals elsewhere.
I love seeing the same listing for sale and for rent. It really brings the buy/rent analysis into focus because it defeats the argument that ‘a house you buy is much nicer than a house you rent’ — here you’re really comparing apples to apples. I saw at least two in NJ last weekend that were both up for sale AND rent (read as: Accidental Landlords).
Property 1 – a 3 BR split; reasonably maintained, though (to use the listing agent’s term) ‘dated’. I could tell it needed a roof, but other major mechanicals were replaced in the last 3-5 years if not newer (gas furnace, hot water, central air). All but one window had been replaced.
To Rent, $2,100; To Buy: $499,000. Yep, that’s right, even assuming they could get their wishing rent of $2,100, their sale price was nearly 240x rent — double the ‘rule of thumb’ 100-120x rent. Plug those numbers into a rent vs. buy calculator and be amazed.
This is an area with good schools, where property taxes easily top $10k. Plus insurance, the owners will barely see $1,000/mo — before any maintenance.
Property 2:
Another 3 BR, this one semi-attached. Much smaller land that no.1 (but most of no. 1’s backyard was unusable due to slope and trees). I liked the size of the bedrooms – including a master suite with full walk-in closet and a full bath, though the kitchen was small. Spouse noted that there was no playroom for kids’ stuff, so we would be overrun in the living room and their bedrooms, i.e., no improvement over our current situation.
To Rent: $2,100; to buy: $439,000. This one clocks in at 210x rent by virtue of having been beaten down on the sell side. The Realtor-ette acknowledged that the asking rent was overpriced – other detached single-families were asking the same rent (see No. 1) – and that they had lowered the sale price, but not the rent. Odd how being more stupid about the rental market than the sale market makes the number look more favorable, but there you have it. They must have been very resistant to cross the psychic barrier of $2k rent. I’ve looked at several houses for rent asking $2,100, and invariably the seller’s first negotiating move is a cut to $2,000 – they were clearly hoping for $2k all along, but were convinced them to list it higher so they could give away some ‘nothing’. How magnanimous.
Property No. 3 –
This doesn’t fit the pattern, but it was an open house we passed in the same neighborhood, so we stopped in to browse.
3 BR center hall colonial, addition of a garage and office on the side. Small rooms, small closets, half bath in the master (I’d prefer at least a 3/4 if not a full). It was clear that they had spent some money on the upkeep, kitchen had been recently redone with some apparent luxury touches. Small EIK, and no DR to speak of. The problem was – small. “Nice” may be nice, but when “Nice” is 3 feet from your nose in any direction, you’re still cramped.
The asking price reflected that the owners were clearly determined to get their 2005 price plus every dime they invested in additions/renovations – $589,000. I don’t have the description sheet in front of me, but generously, it couldn’t have been more than 1,800 sf, including the addition. That’s $325/sf – for that money, in a living space that feels as cramped as a Manhattan condo, I should have the commute to match, not an hour away relying on a sketchy train line.
Far more creative destruction yet to come. Faster, please.
Update on Property No. 2 – MLS reports rent dropped to $1,900. Rent/buy ratio now 230x. I love it when it gets interactive.