All Forum Posts by: Joe Aamidor

Hi all - does anyone have any experience working with a good Chicago attorney specifically on a condo HOA question?

Specifically, my investment condo has a water leak - likely from the exterior wall - and the condo association is moving slow to address. They have said that I can repair on my own and MAYBE they can reimburse.

I think I just need to speak to someone for ~1 hour; my experience in other cities is that attorneys usually will just charge you for their time to provide some legal advice. I think that's all I need here.

Thank you!!

@Carrick Young - yes, this is exactly what the Gensler report indicated. I think a year or two from now, we'll realize the pendulum swung too far away from the office. Much like many who adopted totally open offices with very little space realized that open office is ok if done right.

@Jenifer Levini  - thanks, great insight! I was wondering if people would move to a place like Santa Cruz. Prices seem cheaper than Oakland so MUCH cheaper than the Peninsula. 

That said - 13 offers seems normal for Oakland! Are agents not instituting offer dates so that they can get even more offers?

Also, a bit of a side note, but I saw a survey of 2000+ office workers, put together by Gensler. 45 percent want to work in the office ALL the time. 25 percent more want the office for 3-4 days a week. So, the majority of people want to be in an office all or most of the time. That said, what's stopping Facebook or Google from renting space in every major city? 

I did not know employees are getting raises - I read that salaries are being cut. And, that if you leave the Bay area, you'll be paid less as the cost of living goes down...

Watching all of this too... Here is what I've seen:

Home prices seem to be dropping in SF and San Jose. We are in Oakland and prices are not dropping - probably increasing - and there is very low supply. This all is odd to me - if sellers are holding back on selling due to uncertainty around Covid - the increase in prices should put their minds at ease. And in Jan/Feb, a lot of homes were being prepared to sell in April/May. So, where are the sellers?

I have heard that people are searching for more space, a yard, etc - but SF is not really a dense place, and San Jose does not seem to be any denser than Oakland. And, the dynamic of "Oakland being cheaper" is not new - it's always been cheaper. Moreover, if I only have to come to the office one day a week, and I work in Palo Alto, am I looking at Oakland or Santa Cruz? I think comparable homes are cheaper in Santa Cruz!

There are news reports that rents are down 10 - 15 percent in SF and the Peninsula. But, is this driven by folks who have left SF for 2020 but are planning to come back next year? What if they don't return?

And, more interesting is this article in Barron's noting that a lot of sellers are going to be coming back. Are there going to be enough buyers? https://www.barrons.com/articl...  (this does answer my earlier question about 'where are the buyers' but it also reads to me as 'sellers know this is there last best time to sell for a while...'

Lastly, I'm watching the economic recovery and the second and third order effects of the slowdown. Some speculate that the next 3-6 months will be full of layoffs as firms "right size" their businesses. The stock market does not appear to be pricing this in.

We did just this (and it's managed by FGR) - cashflow was just ok but we've seen some rental appreciation, a lot of property appreciation and are ~9 years away from paying it off (15 year mortgage). Got a bit lucky on timing, but it's just a nice no-trouble passive investment that gives us optionality for the future!

good points all. I learned that OFFICIALLY, only vacant homes can be listed now - and that may lead some occupied homes to not get listed at all (the current owners just stay). Our realtor also told me yesterday that there are some people buying now -specifically because they anticipate getting laid off (or think it may be likely) and want to make sure they can get prequalified. This seems very odd to me!

I think the big open question is employment - lots of startups are laying people off. Does this spread to tech more generally? That seems like it will have the biggest impact on prices and supply vs. demand. 

yes, I hear there are homes going off market and in general, since a very low offer price is going to lead to a lot of low ball offers, I suspect the asking prices are more in line with what sellers actually want.

a couple other things I'm watching:

-this is typically the time of year that a lot of houses are listed, and in many neighborhoods, you see listings staggered (so only a few at a time) - that's all out the window if we have a shelter in place through May - there will just be a lot of supply on the market at one time

-a lot of homes (we hear) were being fixed up before they were listed. So, now the sellers are sitting on that investment, unable to recoup it (I think that even homes going pending now will have a contingency to let the buyers walk the property before closing)

-what happens with the local economy? if many firms cut even 5 percent of their workforces, I think we have a very different real estate market (less demand and MAYBE more supply)

Great update, thanks. Up in the Bay Area (Oakland in particular) I hear more sales are moving off market to eliminate open houses. This may still be problematic because, at least in Oakland, the way almost all homes are sold is:

1 - home listed WAY under the price a seller expects (60-80 percent of actual expected sale price)

2 - many more than expected offers come in due to some buyers thinking that they can get the house close to ask

3 - some buyers 

Now, last year some homes received offers that were all "too low" so the sellers just repriced at their "transparent price". But - that "transparent price" sometimes scared the buyers away and the homes sat! In other cases the homes say at, let's say $850K, but the seller's agent would tell everyone - they'll only take $1.2M or more. (regardless of comps to justify that price or not). 

So if the off market homes are transparently priced, then I think many buyers will be skeptical of those high prices or just weary of going all out given the economic uncertainty. But, if the homes off market are not transparently priced, sellers may just get a lot of (what they think are) low offers. I predict - though it's just my take - that there may be a bit of a standoff, but its more likely the sellers lose some influence to the buyers. Also, homes here are listed in a fairly organized way - only a few per neighborhood so there's always supply but not too much, and everyone just rotates and bids on everything. That drives demand and limits supply- increasing prices. Now we'll have a backup - the same number of homes in a smaller period of time (even if every goes back to normal in 1-2 months). I hope some homes fall through the cracks. And of course, if some homes are reducing prices to try to sell before things get worse, some buyers may just wait on the sidelines and see how low prices can go.

Also, I've been a bit skeptical of the "underpricing" model because it requires the buyer to play a bit of a guessing game. In a hot market buyers just overpay because the risk of waiting, as prices rise, is greater than overpaying a bit for a home, esp if you plan to stay in that home for a long time. But if you don't get the home, the fatigue of making a strong offer, being the only one to make that kind of offer, and still hear "that's not enough" is really discouraging. Especially when looking at home prices even 5-10 years ago - these sellers have hundreds of thousands of dollars in equity.

I can't predict what will happen but - at least in our market - i'd like to see how bad Q1 earnings will be and see if that leads to layoffs, etc... While you might think the tech companies are insulated, many small businesses buy google and facebook ads, for example. 

Would be interested in hearing what others are seeing and thinking.

Great update, thanks. Up in the Bay Area (Oakland in particular) I hear more sales are moving off market to eliminate open houses. This may still be problematic because, at least in Oakland, the way almost all homes are sold is:

1 - home listed WAY under the price a seller expects (60-80 percent of actual expected sale price)

2 - many more than expected offers come in due to some buyers thinking that they can get the house close to ask

3 - some buyers 

Now, last year some homes received offers that were all "too low" so the sellers just repriced at their "transparent price". But - that "transparent price" sometimes scared the buyers away and the homes sat! In other cases the homes say at, let's say $850K, but the seller's agent would tell everyone - they'll only take $1.2M or more. (regardless of comps to justify that price or not). 

So if the off market homes are transparently priced, then I think many buyers will be skeptical of those high prices or just weary of going all out given the economic uncertainty. But, if the homes off market are not transparently priced, sellers may just get a lot of (what they think are) low offers. I predict - though it's just my take - that there may be a bit of a standoff, but its more likely the sellers lose some influence to the buyers. Also, homes here are listed in a fairly organized way - only a few per neighborhood so there's always supply but not too much, and everyone just rotates and bids on everything. That drives demand and limits supply- increasing prices. Now we'll have a backup - the same number of homes in a smaller period of time (even if every goes back to normal in 1-2 months). I hope some homes fall through the cracks. And of course, if some homes are reducing prices to try to sell before things get worse, some buyers may just wait on the sidelines and see how low prices can go.

Also, I've been a bit skeptical of the "underpricing" model because it requires the buyer to play a bit of a guessing game. In a hot market buyers just overpay because the risk of waiting, as prices rise, is greater than overpaying a bit for a home, esp if you plan to stay in that home for a long time. But if you don't get the home, the fatigue of making a strong offer, being the only one to make that kind of offer, and still hear "that's not enough" is really discouraging. Especially when looking at home prices even 5-10 years ago - these sellers have hundreds of thousands of dollars in equity.

I can't predict what will happen but - at least in our market - i'd like to see how bad Q1 earnings will be and see if that leads to layoffs, etc... While you might think the tech companies are insulated, many small businesses buy google and facebook ads, for example. 

Would be interested in hearing what others are seeing and thinking.

@Charlotte Casey - I read that the Seattle market was slowing a bit (maybe short term) - with limited people at open houses, etc. I think many are still just looking to move, and not just hi pause, as it takes time to find a home.

But - here in the Bay Area, I still am hearing of multiple offer situations (which seems to always happen on anything good) and homes are being listed. 

I think the bigger issue for us here - and maybe Seattle a bit- is a tech bubble bursting. If the small businesses are in trouble, they will stop buying FB and Google ads, for example, which actually could be quite disruptive to those businesses. AirBNB already had widening quarterly losses, if they have a bad quarter or two, they'll likely layoff staff too. And then the startups that hoard cash as it's harder to raise more money. It's not so hard to imagine a lot more people looking for work, which probably would slow the real estate market (especially without a fast stock market rebound). 

We are waiting for Q1 earnings, the response of some of these firms to potentially poor results, and then the activity on the street before really jumping back. Apple already issued a warning due to supply chain disruption and they won't be the only one.

Also, our local market in Oakland is highly 'organized' - only a few homes hit the market in any one neighborhood each week, to create some scarcity. I think even a 3-6 week pause will delay all this (same homes to list in a shorter time frame), and there will be more supply in the short term. Some homes may fall through the cracks even if this all goes away and there is a sharp V shaped rebound. I'm buying that rosy scenario yet.

This is how I am thinking about it - would love to hear from others too.