Wednesday, October 05, 2005

NNJ Weekly Inventory Update

It's Wednesday again, so time for the weekly inventory update:

GSMLS

Bergen
9/28 815
10/5 833

Essex
9/28 1920
10/5 1918

Hudson
9/28 97
10/5 100

Morris
9/28 2526
10/5 2540

Passaic
9/28 1374
10/5 1408

Somerset
9/28 1641
10/5 1677

Sussex
9/28 1598
10/5 1560

Union
9/28 1760
10/5 1767

Warren
9/28 804
10/5 808

Total
9/28 12535
10/5 12611

All in all, slight increase in inventory in GSMLS, nothing really noteworthy as far as week to week increases go, I believe it was on the order of 0.6%. Notable is that the GSMLS changed their system/database on 10/3, I noticed a drop in active listings at that time.

NJMLS

I'm having issues with NJMLS this morning, all sorts of errors with the database, however I did pull data yesterday, so I'm going to post up a shorter timeframe anyway, but just the totals.

Total
9/28 5455
10/4 5542

These figures are more in line with expectations, an increase of about 1.6% for 6 days. If they resolve their issues later in the day, I may edit this post to include the new values.

One last tidbit I'll throw out, and it's completely anecdotal, so take it with a grain of salt, but it seems like the days of price increases are long gone. The hot sheet price changes are almost fun to read these days. However, there is still a fair share of overbidding in certain "hot" areas.

Caveat Emptor,
grim

25 Comments:

Blogger Richard said...

overbidding is right. it's in the usual hot areas in essex like montclair, milburn, short hills, summit and maplewood. i believe this is mostly wall street money where relative to similar places in NYC prices are a steal. if you get away from easy commuting areas, the picture isn't so rosy.

10/05/2005 03:27:00 PM  
Blogger njdoc said...

Grim,

I am starting to notice some increased inventory in my neck of Bergen county. I really like your blog. Keep up the good work.

P.S. Richard, Summit is in Union county.

10/06/2005 07:04:00 AM  
Anonymous Richie said...

First post here; the slowdown may be due to the end of the summer season and parents who already moved to the city of the school system they want their children in.

In any case; it's not surprising either way. The prices are only being fueled by the greedy realtors. Remember the famous names of the dot-com era? People who praised companies like Amazon, CMGI, Real Networks, PETS.COM, Lycos, Redhat, etc.. Where are they now? Where are those stocks now? There has to be VALUE in a house in order to sustain such fast increases. A fixer-upper for $500k? My my... Sounds like buying Worldcom when it was at $70/share..

The fact is, now people have a lot LESS equity in their homes. I don't see the logic in that "interest rates are low so you can afford more".. Bull. They just used it as an excuse to make more commission. The only people who made out with the low interest rates are the people who bought in 1998-2001 at 7-8% and refinanced when the rates went below 6%. Everyone else (in my opinion) got screwed!

I'm just curious how many people's salaries increased more then 40% in the last 3 years...

10/06/2005 07:40:00 AM  
Blogger NJGal said...

I got caught in a bidding war in Maplewood, which is still a relative deal compared to other areas in NY, NJ and CT. However, it never ceases to amaze me that they are trying to get people to pay 500Gs for a house that borders on Irvington, and in a school district that SUCKS. None of these young people will stay in Maplewood to improve it either. They all just dream of Millburn. Thanks but no thanks.

10/06/2005 08:13:00 AM  
Blogger InvestorDavid said...

Various reports I read suggested that the housing price will be down 20%-30% in NY, NJ, CT area. Some reports suggested that it will happen starting 10/17 (new Bankruptcy law) and will pop between next Spring and Summer. Does anyone buy this prediction?

10/06/2005 08:18:00 AM  
Blogger Richard said...

njgal, maplewood is crazy. i'm renting in south orange in the village so i know the market well. many DINKS (double income no kids) are buying properties way over asking because of the nice village and the proximity to the city. the school system isn't what it used to be, especially Columbia High School and the taxes are just atrocious. the houses will always maintain some value because of the train line but i don't see how much higher they can go once the market really cools down.

10/06/2005 08:21:00 AM  
Blogger grim said...

Do you really think buyer/seller psychology can change that quickly? People can, and will hang on waiting for things to improve. I don't think we'll those massive 20-30% drops next year. If for some reason we do drop by 20-30% by next summer, it's only a step on the way down. The real pain will be seen with ARM readjustments in the coming 2-3 years. I can't imagine being in a worse financial situation. Likely not being able to claim bankrupcy, paying a mortgage payment more than double what the home is worth, not being able to sell it for enough money to cover the mortgage. Standard of living is going to be in the gutter as those folks are held captive in their golden prisons.

grim

10/06/2005 08:50:00 AM  
Blogger pascackvalley said...

The supply of homes in Franklin Lakes is equal to one year of inventory, this comes from all places realtor.com, market conditions. The supply in Saddle River and USR ia at around 8 to 9 months.

As of this morning there are over 2700 listings on njmls for Bergen County

In my own zip, nothing has sold in weeks, and many houses have been on the market 3 to 6 months. price derductions are becoming common.

I certainly believe we can see a 10 to 20 5 correction by Spring/SUmmer of 06, in my zip sold prices are down at least 5% from this time last year.

A far as Maplewood, people are out of theri minds spending that kind of money there, the town has serious issues.

10/06/2005 09:37:00 AM  
Blogger NJGal said...

I'm so glad I'm not alone in being thankful that I lost that bidding war in Maplewood. The town is very cute and it is a good commute. However, I cannot imagine myself paying those taxes or sending kids to those schools. As a DINK, I expect to have kids soon enough and my greatest fear would be buying into a crappy school district and getting stuck there with an upside down mortgage when the bubble pops - when prices drop in good areas, they are sure to drop in the more "borderline" areas.

I have heard, anecdotally, that many of those Maplewood places go for 100K over asking. I lost to someone who went a mere 25K over.

10/06/2005 11:45:00 AM  
Anonymous Anonymous said...

This housing bubble makes the 1980's-early 90's bubble sound like a meow.
It was ugly back then. Really ugly. Don't be fooled it won't happen again. It will. This time however the mtg debt is much higher as well as other consumer related debt. Back then credit was tougher to come by. More people are highly leveraged today.
This will unwind much quicker than early 1990's bubble due to higher levels of debt and greater more free flowing of information coming from interbet and 24 hr news media.
The big chill is on. Prices are going down and inventory is moving on up.
A past bubble veteran. All in my opinion of course.

10/06/2005 12:16:00 PM  
Anonymous NJRich said...

Article from Oct. 4 on NJ Economy...

http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20051004/UPDATES01/510040349

10/06/2005 01:50:00 PM  
Anonymous Anonymous said...

I agree with the post about leverage. Live by the sword, you shall die by the sword. When a illiquid leveraged investment turns against you, YOU ARE F*CKED

10/06/2005 01:59:00 PM  
Blogger pascackvalley said...

njgal A rising tide lifts all boats, and that is what this bubble has done, there are areas near me where people were paying ridiculous amounts, for towns they should not have purchased in. Now those towns have high inventory, just like the towns on the high end.

It is just like the last down turn, started on the high end, and the low end,a nd than spread to the middle. Keep in mind many people coming from NYC know little about Jersey, and the realtors home owners know about it, and take advantage of it.

I was in a social situation a while back, where somebody was joking about the people who ourchased there Aunts house and how clueless they were, paying that kind of money in that town.

The comment they made was"they were better off staying in NY"

10/06/2005 03:53:00 PM  
Blogger NJGal said...

So true pascackvalley. A 500-600K house looks cheap next to a million dollar one bedroom apartment I guess!

10/06/2005 04:51:00 PM  
Blogger grim said...

I met a couple from Mass last weekend looking at an 850,000 "fixer upper" on Upper Mountain in Montclair (corner of Claremont if you know the area). It's a wreck of a house that needs at least 250,000 worth of work, maybe 150,000 if you contract out all the major work and finance the rest with sweat equity.

The place has been falling apart for years and years, a youngish couple owned it, I'm sure they didn't pay more than 150 for it a few years back, and believe me, any hackjob work they did, would likely need to be 'redone'.

The couple was very interested, I talked them out of it, they didn't realize the house was sitting for months on the mls, and finally went fsbo with a 50k price drop. Granted, it *can* be a nice house, but the location is lacking, not exactly the most desirable section of Upper Mountain. At 400 it might be worth it. They didn't realize that any good deal in Montclair would have been snatched up by contractors and remodelled months ago. I sure hope they didn't change their minds..

Caveat Emptor,
grim

10/07/2005 06:13:00 AM  
Anonymous Anonymous said...

The value people put on money today is shocking. Of course when you are using an interest only loan or some risky new creative financing scheme to get in with very little down, you will not have same feeling as if you had worked and grinded to save for a 20% down payment.
The people that are selling and moving up are playing with monopoly paper. Well that monoploy paper is falling in value now.
The RE market is popping now.

10/07/2005 07:23:00 AM  
Anonymous Anonymous said...

Prices of houses and condos in 1992-1995 got crushed. Many builders went bankrupt and lots of agents unemployed.
This is the time to watch from a distance. Do not attend or show any interest in homes. Greedy realtors and sellers have one thing in their eyes green. They are trying to stick you with an overpriced house you will lose money on if you have to sell in next 7-10 years. remember the infdustry takes care of itself through high transaction cost between the appaisors inspectors lawyers and realtorsand mtg brokers. Everyone trying to rape the buyer.

10/07/2005 07:32:00 AM  
Anonymous Anonymous said...

Track this:

http://www.realtor.com/Prop/1051851412

It's a 2 br/1 bath brownstone (walkup) condo in Hoboken. While it has nice details, it does not incude a parking spot and sits roughly a mile from the PATH.

All this can be yours for....

better sit down...

$790,000.

:drum shot, cymbol crash, audience laughter:

Or you can keep your $160,000 down payment and rent a very similar property for less than half the monly carrying costs of this "gem."

10/07/2005 09:10:00 AM  
Anonymous Anonymous said...

If is sounds insane it is insane.
It's that simple.

10/07/2005 10:46:00 AM  
Blogger NJGal said...

I know that we have all talked a lot about the early 1990s condo crash in NYC, but out of curiosity, how did that effect the suburban housing market? I am assuming it did, but I have never heard of anyone specifically talk about it.

10/07/2005 12:36:00 PM  
Anonymous Anonymous said...

"I am assuming it did, but I have never heard of anyone specifically talk about it."

I did. Indirectly anyway.

There was this US News&WR cover story "The Great Housing Bust" that I remember reading at the gym circa 1989/90 or so.

I opened to the story and the big photo they used for the top half of the headline page featured this unhappy looking couple and two kids standing in front of a house which they couldn't sell. The house/yard looked familiar.

Reading the article, I confirmed my hunch: the house depicted was on Grant Place, Little Silver. (And less than a half mile from where I grew up.)

I also recall a neighbor of my parents remarking about all of the "for sale" signs up along Rumson Road. "No one seems to be able to sell their houses these days." She remarked.

10/07/2005 01:00:00 PM  
Anonymous Anonymous said...

The suburban housing market got waffled just like NYC condos.

Condos in NJ fell about 50% in price and houses about 25% (some areas fell more).Lots of for sdale signs and real estate was not in demand at all.
The real estate bubble this time is much worse so it could be worse.

10/07/2005 03:15:00 PM  
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