I had a conversation with my new tenant yesterday. Seems like my friend/realtor found a really great person. I could have talked to her for a lot longer than either of us had time. She did mention how my next door neighbor sold her condo for $40,000 less than what I paid for mine just 2 years ago. We have nearly identical condos.
I know that I haven’t realized that gain, so the money isn’t lost. Plus the old lady next door had enough of the market and just wanted to get out. Truth be told, it’s about $20,000 less than any other condo has sold for. I’m not particularly worried about this development as I’m in it for the long haul. Part of me is just sad that I didn’t have the liquid assets to buy it and rent it out. It would not have been a cash flow positive, so it’s probably a good thing.
John Wilks says
Great update. If you had the assets, would you buy the condo and then sell it for a gain?
It would have been somewhat difficult in practice. It was my direct neighbor who I knew well, a little old lady no less. I’m not sure I could have bid a price that was about $50,000 below her original asking price. She did lower her asking price and at some point I might have jumped on it, but I’m not sure I would have been able to play as much hard ball with someone that I said hello to for 2 years.
That said, if there were no emotions in it, I probably would have bought it and rented it out it perhaps indefinitely, but at least 4 years (or until prices rebound). I’m not ready to call it a bottom in parts of the Greater Boston area, but this is one place that I think was undervalued.
Interesting situation. Good luck with your property value. I’m sure by the time you end up selling (if at all) that you’ll be fine. The title of the article was great…I just had to come read it!
David B. says
The thing with real estate is that it fluctuates so much. One month it’s up $40,000 and the next it’s down $40,000. That is rough to hear that your neighbor sold for less than what you bought at, but no big deal if you’re in long term.
Well I should mention that her starting price was 285K, which was close to what I paid for mine two years ago. The Zillow value was 290K when I checked last month. So we are talking a fairly big change in terms of percentage. If that were to be the “fair value” it would take me 4 more years at 5% yearly appreciation to break even on the place I purchased two years ago. That would be 6 years of no appreciation, which seems historically pretty odd.