Bubblewrap?!?!?
The Northern NJ bubble made the front page of The Record this Sunday with the first in a four part series on the housing market. Writer Prashant Gopal took, what I thought, was a slightly anti-bubble stance on the issue, however, with 3 more parts to go, we'll see if Prashant is an unbiased journalist or just another real estate cheerleader.
Boom or Bubble
I only have a single comment on the article, I'll hold back until I can read the entire 4 part series..
Tkacz and other agents interviewed by The Record believe North Jersey home prices - which were up roughly 15 percent over the 12 months ended June 30 - are protected by a sort of "bubble wrap." These factors include proximity to New York City, a shortage of undeveloped land, environmental regulations that restrain development, a steady influx of immigrants and a strong, diverse job market.
This kind of argument is currently being used in every bubble market. You can say the bubble won't pop here because of the weather, because of the proximity to certain metro areas, because you think jobs are there, because of this, because of that, you can come up with 100 excuses for this area being different, but the truth of the matter is that there is a bubble.
The fact that Northern NJ is a part of the NYC metro area has always been reflected in house prices here. Go out into the midwest, why does a house 3x the size on 10x the property cost a quarter of what a home here costs? It's no secret, we've been paying a premium for a long time. All of these factors were priced-in long before the bubble and will still exist post bubble. The boom pushed our already high home prices even higher. The same article goes on to say NYC is a cooling market. Interesting, we stay hot because of our proximity to NYC, but NYC itself can cool? I don't get it.
Caveat Emptor,
Grim
Boom or Bubble
I only have a single comment on the article, I'll hold back until I can read the entire 4 part series..
Tkacz and other agents interviewed by The Record believe North Jersey home prices - which were up roughly 15 percent over the 12 months ended June 30 - are protected by a sort of "bubble wrap." These factors include proximity to New York City, a shortage of undeveloped land, environmental regulations that restrain development, a steady influx of immigrants and a strong, diverse job market.
This kind of argument is currently being used in every bubble market. You can say the bubble won't pop here because of the weather, because of the proximity to certain metro areas, because you think jobs are there, because of this, because of that, you can come up with 100 excuses for this area being different, but the truth of the matter is that there is a bubble.
The fact that Northern NJ is a part of the NYC metro area has always been reflected in house prices here. Go out into the midwest, why does a house 3x the size on 10x the property cost a quarter of what a home here costs? It's no secret, we've been paying a premium for a long time. All of these factors were priced-in long before the bubble and will still exist post bubble. The boom pushed our already high home prices even higher. The same article goes on to say NYC is a cooling market. Interesting, we stay hot because of our proximity to NYC, but NYC itself can cool? I don't get it.
Caveat Emptor,
Grim
8 Comments:
HAHHAHAHA NYV apartments fall 13% in price.
Now it is hapening here.
Just ask some from Bostone. 15% drops are the norm last 3 months.
The crash has began.
I still can't get over that "bubble wrap" comment. I'm sorry, while I do agree it's got a clever kind of twist to it, it's making light of a very delicate and somewhat dangerous situation. God I hope I don't start seeing this term elsewhere, it's almost as bad as "bubblettes" and "froth". It just makes me angry to hear that kind of nonsense.
-grim
I went to one open house this weekend. The open house was in Cedar Grove, near the reservoir, I believe asking was somewhere in the low/mid fives. Overpriced? Absolutely, it really did belong somewhere in the mid fours, but it was a nice place. In fact, I thought it was a much nicer place for the money than alot of others I've seen in that price range. Did I think about making an offer? Heck no, you'd have to be crazy.
I did a few drive-bys up near Chester and Mendham as well. Nothing spectacular and all significantly overpriced.
Buyer and Seller psychology doesn't change quickly. While I am definately seeing a shift, I'm still going to hold my ground and say it's going to take some time to play out. We probably won't start seeing pain in the market until February at the earliest.
-grim
The tide is going out. Anyone can ask anything they want. But houses are sitting and are obscenely overpriced.
80-100% in 5 years is absolutely to much increase in such a short period of time.Similar houses 5 years ago sold for about $275k-$300k so this house with very little in terms of upgrades and about 35 years old deserves maybe a $385K bid. 5% compounded return over 5 years. about 38% overpriced.That's how insanely priced housing is.
Don't even bother looking.
One house I looked at about 2 months ago still sits.You can just see the seller desperation. When it first came on the market the yard was all neat and trimmed. Now the grass is getting long and looks a little messy.
Reality sinking in.
Does the seller have to sell? If so then he better start acting fast to lower price to find a buyer before the drop picks up steam. A token 5-10% price reduction will not be working soon.
My wife spoke with a friend whose brother is a weichert realtor.
He said things have really slowed.
I am collecting names of realtors that are quoted in local NJ papers saying that there is no bubble and it's a great time to buy. Then when the bust is in full force will contact several journalist and give the quotes, papers and dates of articles to expose these greedy pros in public.
I hope everyone else does the same. If so called pro's give bad advice then they should be held accountable for their incompetency.
TC
I'm hoping the ability for a buyer to add forced value after purchase, may help my home's marketability when the time comes to sell it, by providing built in protection to it's buyer.
I'm in West Central Jersey, Hunterdon County, about 4 miles off Rt 78. My home is one of the smaller ones, on one of the neighborhood's largest lots. (They lengthened the street and added bigger homes going for about 400k more than mine) My house is sound, about 30 years old, in good shape but needs updating. A renovator told me about $150k worth of additions (great room and master suite)and updates could bring my home closer in value to the newer larger ones. I'm not in a position to renovate myself, - am thinking of moving to an adult community.
If he's correct, a 546K base ($579K minus 33K in saved realtor commission) plus 150K could equal a current value of close to 900k, thus leaving a nice cushion if prices fall back.
Any suggestions?
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
Post a Comment
<< Home