It's Not The Oklahoma Land Rush, But It's A Startby
When Lou and Fred Converse placed their Brooklyn cooperative apartment on the market late in 1989, they embarked on a big-game hunt. Their quarry: that rarest of real estate species, the buyer. For most of the time since then, sightings have been as scarce as elk tracks in Central Park. But in the space of just the past few days, the Converses have at last managed to sell their co-op to an apartment-renter who decided that the time to buy had finally arrived. That, in turn, allowed the Converses to swiftly come to terms on a 54-year-old ranch house in the suburban splendor of Darien, Conn.
Buying begets buying in the real estate business. And with buyers beginning to saunter in from the sidelines, finally lured by the depressed prices as well as 9.4% interest rates on 30-year mortgages, sellers such as the Converses are at last unloading their properties. As a result, the long-moribund arena of residential real estate is starting to come around. It's hardly a repetition of the Oklahoma land rush--as some brokers are happy to imply--but rather a slow, steady resuscitation. "People are starting to buy for the first time since we put our co-op on the market," says Fred, an executive at Showtime Networks Inc., a cable-television company. "The activity has picked up in just the past few months."
The Converses were a tad luckier than many home sellers, because they were not forced into the market by a change in employment or divorce. Such "motivated sellers," in real estate parlance, are often obliged to ditch their dwellings for well under the purchase price. But even unmotivated, patient sellers like the Converses have found the going plenty tough. It was 1988, the top of the market, when they paid $133,000 for their co-op in the heavily yuppified Park Slope section. They initially listed their co-op for $149,000 late in 1989, and when the first offer came in a few months later, it was for $125,000. They rejected it out of hand.
'LOW-BALLER.' Meanwhile, they kept hunting for a house in various suburbs of New York City. While they looked, they waited. And waited. They had many lookers but no more offers. Their search brought them to a desirable property in Westchester County. They put in an offer--but backed off in the face of the murderously slow New York co-op market, which has been pummeled by Wall Street layoffs and generally crummy economic conditions. "We could have held on to the apartment and rented it, at a $500-a-month loss," says Lou Converse. "We decided against it." They lowered their asking price to $139,000, and then to $129,000. A few months ago, a "low-baller" came in: $105,000. They turned it down.
During the fall, the market for suburban real estate was almost as inert as the glutted co-op market. "We would go into the broker's office, and we would be alone--nobody else would be there," says Fred. But in recent weeks, it appears that prospective buyers, with war worries receding, were betting that prices and mortgage rates had touched bottom. In their own house hunt, the Converses would conclude a visit to a home and find other buyers waiting to enter.
The agents in suburbia seemed more spirited. "They would say, `Don't wait, the market is picking up,' but we always resisted the nudging," says Lou. But when a serious offer came in for the co-op, they moved fast. On Mar. 7, they reached an agreement to sell it for $120,000. On Mar. 10, they put in a bid on the Darien house. On Mar. 11, they had a deal. It's all theirs: four-tenths of an acre, a pool--and, quite possibly, a monument to the end of the real estate depression.