- You Can Choose To Make Your Own Luck
- Anticipate A Housing Market Pivot And Do Something About It
- Airplanes And Houses Rarely Go Together
I’ve been thinking about the times when I’ve had some good luck, the obvious opposite of bad luck, and something we probably have more control over than we realize. Back in the fall of 2021, my wife and I were scrambling to get our house ready for sale. We had lived eighteen years in a New England Salt Box home built in 1825. We raised our four boys in that house, and we loved our time there. When we originally purchased it in 2004, it was our second consecutive home won by paying at or above the asking price, and each time, we felt very lucky to win. But we became empty-nesters during the pandemic, and all of our sons moved out and were gainfully employed, so it was time to move on. My wife and I wanted to downsize, and the house had taken a nearly two-decade thrashing from all the testosterone that lived there, so we needed to renovate.
Our 24-Hour Lucky Streak
Before I get started discussing our luck and the housing market, my wife and I had one of those 24-hour “lucky days” about twenty-five years ago that we won’t forget.
- 1. We applied for a parking pass for the local commuter train station with a five-year waiting list because I was commuting to Manhattan – walking a mile to the train in the rain and snow was getting old. My wife brought our (then) three boys to the town hall to get on the waiting list, and coincidentally, the clerk had raised three boys; she said she felt sorry for my wife and just gave her a parking pass that normally took five years to get. The only catch was that we couldn’t tell anyone this happened. When I showed up and parked my car at the train station the next morning, on a Friday, I tried not to talk with my friends about the specifics of how I got the parking pass so quickly, saying something like, “I don’t know, my wife took care of it.” One of my friends quipped: “Hey, I’m from Brooklyn, and I know when someone is full of sh*t.”
- 2. The next morning, Saturday, my wife and I ran in a 5K road race and won the big raffle prize, which was two airplane tickets to anywhere in the U.S., and my wife also won a pair of running shoes in a different raffle at the event.
- 3. A few months prior to this, I had purchased a fundraising ticket from the town fire department at the Fourth of July parade and got a call on that Saturday of the race saying we won a 64″ flat screen T.V.
Yes, we felt pretty lucky.
But I digress…
A Home Renovation To Beat The Clock
In the fall of 2021, we were going stir-crazy after being cooped up for the pandemic and, like millions of other Americans, were itching for a change in home scenery. So, we hired a contractor who we had used before and who was the father of one of our kid’s classmates. He was stretched out over five different home improvement jobs in town, but we felt lucky to have him since all contractors were fully booked. We planned to renovate two of the four bathrooms, paint the entire interior, refinish all the hardwood floors, fix the front door, update a deck, and replace eight insulated glass doors that were defective. This project was expected to take 5-6 weeks. During this time, we cleared out a couple of decades of clutter in the attic, basement, crawlspace, eaves, and around the house. Lots of trips to the town dump and many donations to charities ensued. I learned that my kids, who had already moved out, didn’t want any of our old furniture, which was in sharp contrast to the way I viewed offers from our parents when we were fresh out of college. I still can’t claim to understand the mindset of the Millennial and Gen Z generation. Sigh.
As it turned out, the 5-6 week renovation project quote was wildly optimistic. We had to beg the contractor to actually show up. When he did, he and his crew were terrific, but working one day a week wasn’t the same as working five days a week.
By February, it was clear that the Fed was gearing up to begin raising rates, and since our home renovations were going very slow, so we decided to risk buying a house before selling our house. Since only one or two new listings arrived in our specific market subset each week, we thought it would take a long time to find something – we were wrong, but we were lucky.
Before the first Fed pivot in early spring of 2022, we lost an 8-way bidding war on a house that needed a lot of work (we were the highest offer, but the winner was all cash) but it had a two-story peace sign painted on the outside of a converted barn that felt like a Soho loft inside. How cool is that?
Winner, Winner
About two weeks later, I saw a listing on Zillow one afternoon that looked promising, so we told our broker about it and raced to the house, all within about two hours. By then, there were at least a dozen couples walking around the yard outside of the listing as we pulled up to the house. We became immediately deflated at all the competition, especially after losing out on the “peace barn.”
But this time, we beat 30 people in a bidding war (best and final) and only overpaid by 36%. Ha. This was now our third consecutive home won by paying at or above the asking price. We felt lucky because we won the perfect house, half the size with more land, renovated and historic like our old home, but older, built in 1755. Using my appraisal hat, I felt strongly that the house was listed for much lower than the value the local sales data indicated, so I’ve rationalized that we really only overpaid about 15% (LOL) and locked in a 4% mortgage rate. We felt very lucky.
Finally Selling Our House
After several months of waiting for those new glass doors to arrive, one out of seven doors was damaged during delivery, and thankfully, the replacement door only took two weeks to arrive. We ended up placing the home on the market about a month after the 2022 Fed pivot, and instead of a bidding war, we only heard crickets. Two weeks later, without an offer, we cut the price by 4%, but again, there were no offers, and then two weeks later, we cut the price by another 6% and ended up getting an over-ask offer within hours of the second cut. We sold our home to a happy young couple with a baby, and we felt lucky. We knew that when the Fed pivoted, it was clear as day that we needed to get our home ahead of our direct competition in a rapidly changing market, and it worked. We made our luck. In my nearly four decades as an appraiser, I find that most sellers take 1-2 years to adjust to a market pivot to weaker conditions without feeling they left money on the table when they sell. Most of the competing homes on the market in our specific segment stayed with their asking prices and, therefore, sat for another six months or more, and most never sold. We felt lucky.
As you can tell, I am from a school of thought where individuals make their own luck, good or bad. But sometimes, that belief in making your own luck gets challenged.
Stories About Bad Luck
It is the 45th anniversary of New York Yankee catcher Thurman Munson’s tragic death in a private plane crash. His bad luck story reminded me of the more recent tragic death of another Yankee player in a plane crash, Corey Lidle, who accidentally flew his private plane into a Manhattan residential condo tower known as The Belaire at 524 East 72nd Street in 2006. But that’s not the beginning of this particular bad luck story.
Back in 1997, a woman was watching the Macy’s Day parade on Central Park West, and high winds caused the rope of the Cat In The Hat balloon to knock over a lampost and strike her, sending her into a 24-day coma. Nine years (or nine lives) later, that plane flown by New York Yankee pitcher Corey Lidle crashed into her building, with the engine landing in her bedroom. Thankfully, no one was in her condo unit at the time. In 2007, there was a rumor that her husband had filed for divorce. A lampost falls on you, placing you in a coma. An airplane crashes and the engine falls into your bedroom, and your husband leaves you. She was brimming with bad luck. What are the odds?
Get ‘Pre-Disastered’ And Make Your Good Luck
The movie The World According To Garp came out in 1982 – I loved it. You’ll appreciate the concept of “pre-disastered” and airplanes, so wait for it.
Final Thoughts
Yeah, I’d say we feel pretty lucky about our current home. We got the home we really wanted, we enjoy a low mortgage rate, and we love our new town.
And best of all, there are too many trees surrounding our home to get hit directly by a private airplane. That’s some good luck, no? Oof.
Did you miss yesterday’s Housing Notes?
August 5, 2024
Image: Chat & Ask AI
Housing Notes Reads
- Mortgage Lock-In Spurs Recent HELOC Demand [Liberty Street Economics]
- Homeowner Equity Rises Across the United States [CoStar]
- NYC renters are ‘paying more for smaller apartments’ [Brick Underground]
- New York Renters Brave Bidding Wars, Long Lines in Hot Market [Bloomberg]
- Lease signings, not rents, set records in July [Crain's New York]
Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 7-2024 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 7-2024 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 7-2024 [Miller Samuel]
