I’m baaaaack!!! Kudos to Henry for maintaining TrueGotham while I was away and providing us with excellent content. Thanks Henry.
I have just returned from spending a week with the family in Bethany Beach, Delaware and wanted to share some interesting perceptions that I had of the real estate market in this seaside resort town just five LOOONG hours (especially with two kids in the car) from Manhattan.
Firstly, we stayed in a private 5 BR home just 200 feet from the ocean beach that is currently on the market for sale at $1.8M. It is also directly on Route One which is a major fou lane highway that runs up and down the coast. Traffic noise is worse than some New York City apartments.
Although the house was quite nice, $1.8M seemed quite steep. Another interesting tidbit… the neighboring house is also for sale, at $2.15M. An ocean front home and another on the same street are also for sale. Four out of ten homes on the cul-de-sac are actively on the market.
Additionally, the number of “lookers” stopping by to pick up flyers for these homes (left in waterproof boxes on the realtor’s sign) was significant. I plan on keeping tabs on these homes to see how long they are on the market and what there sales prices may be.
Secondly, the television ads for realtors were plentiful with one in particular that left a lasting impression. A local realtor in the Bethany/Rehobeth area is offering his buyers a whopping 24% of his total commission earned just to procure buyers. Let’s see…assuming he is able to represent a purchaser buying the $1.8M home at 6%, he would split the commission with the seller’s agent and walk away with $54,000 of which he would give his company approximately 40-50% and his buyer approximately $12,000 (not a bad sum to help with closing costs)! Buyers must be pretty scarce in his neck of the woods as seems to be the reported trend nationwide.
Let’s say he is fortunate enough to sell one of these a month in his market. That’s $144,000 that he’s willing to give up on an annual basis. A hefty sum but perhaps a necessary cost of doing business in a market that has seen significant cooling. I wonder if this trend will spread across the country? Or perhaps it is already happening in other places? Has anyone heard of this anywhere else in the US?
Lastly, the NYC market seems to be picking up steam again. Don’t know what to attribute it to but I will say that my week off was the busiest of the summer with seven contracts going out for sale. Go figure… the last weeks of August is traditionally sleepy but for the last two years it has proven to be very active.