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Update to the newsletter!
Unfortunately, the weekly updates I was using might not be possible for now. The company I was using for this has taken down graphical charts that they updated, so I will need to find a new source I can trust.
I also had to switch to # of Homes Sold for the Month, instead of New Listings.
For now, I will leave the monthly updates as they are above. I will figure out a way to get you the most up to date information soon!
I made a Quick Video about it!
Cape Cod Sells For $922,500!
I was shocked this week to find out a 1,728 sqft Cape Cod, that was 3 beds, 1.5 baths, on a 7,300 sqft lot, sold for $922k! I personally toured the house and the half-bath was the size you'd find in an airplane.
Don't get me wrong, the house was nice for anyone to move in to. But, that much had me stunned. When I ran my only valuation on it, I found it was worth $780,000 at the MOST!
How could a home sell for that much? The only thing I can think of is that these were out of state people that had to buy something right away. The home they purchased was likely more than what they could get from the city they were from, so spending that much may not have been a big deal to them.
Sales Like The One Above Move The Market
Homes selling way over market price has been part of the rapid price growth issue here in Northern NJ. What happens most often is someone from New York comes here to find more land, more house, a nicer neighborhood, and better schools -- all for 1/2 the cost. So to them, it's totally validated to spend 20%+ over the market value. All they would typically do is waive the appraisal, or buy in all cash.
The consequence for our communities is that once these sales close, it raises the price of every home in that neighborhood instantly.
Why Does It Change The Values?
The banks do not care how a home is sold, they just care that it did. It doesn't matter how much over the previous value of that property was, or if it was an all cash deal.
I completely disagree that appraisers and banks can take cash offer or appraisal waived sales as a genuine comparison to be used for home valuations. They would not provide a 100% loan to anyone, even they could afford it, if the offer exceeds it's appraised value. But, they will take a crazy sale and use that as a comparison for the next appraisal. There should be a curve at the very least when it comes to weighing these sales.
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