Lagging growth in N.J. tied to housing costs
Thanks everyone for bringing this one to my attention:
Lagging growth in N.J. tied to housing costs
by Robert Gebeloff
The high cost of housing is increasingly cutting into in New Jersey's demographic bottom line.
With more and more residents leaving the state, and the rate of international immigration decreasing slightly, population growth has slowed to crawl, according to Census data released yesterday.
The Garden State grew by just 0.4 percent in 2005, according to population estimates, the second consecutive year of minuscule population growth. In the 1990s, New Jersey typically grew by a modest but steady 1 percent each year.
The slowdown was so stark that New Jersey nearly dropped off of the nation's population Top 10 list.
While I'm not sure I agree with his hypothesis, the fact of the matter is NJ demographic growth has been anemic. There has been no new influx of buyers driving home prices upwards. Realtors and other media cheerleaders love to use population growth and housing shortage as a justification for high prices. The stratospheric jump in demand that drove prices upwards was not due to population growth or a shortage of housing, but from speculation and easy money. Realtors and media cheerleaders will continue to be unmasked for what they are in the upcoming months.
Caveat Emptor,
Grim
Lagging growth in N.J. tied to housing costs
by Robert Gebeloff
The high cost of housing is increasingly cutting into in New Jersey's demographic bottom line.
With more and more residents leaving the state, and the rate of international immigration decreasing slightly, population growth has slowed to crawl, according to Census data released yesterday.
The Garden State grew by just 0.4 percent in 2005, according to population estimates, the second consecutive year of minuscule population growth. In the 1990s, New Jersey typically grew by a modest but steady 1 percent each year.
The slowdown was so stark that New Jersey nearly dropped off of the nation's population Top 10 list.
While I'm not sure I agree with his hypothesis, the fact of the matter is NJ demographic growth has been anemic. There has been no new influx of buyers driving home prices upwards. Realtors and other media cheerleaders love to use population growth and housing shortage as a justification for high prices. The stratospheric jump in demand that drove prices upwards was not due to population growth or a shortage of housing, but from speculation and easy money. Realtors and media cheerleaders will continue to be unmasked for what they are in the upcoming months.
Caveat Emptor,
Grim
10 Comments:
UH OH. There goes another real estate "Myth".
I wouldn't be surprised if people who bought in last 1-2 years are lucky to breakeven after 20 years. If ever!
The People of India China and other developing markets will work for a fraction of our pay. It ain't good and salaries are going down.
Housing is going bust. Just ask the investor who bought that great company wmt or hd or KO or this or that. many have not broken even in 5-8 years. In Japan reale estate and its stock market were down for 13 years. Now finally rebounding off lows.
DO NOT BUY A HOUSE AT THESE PRICES OR ANYWEHERE NEAR CUZ YOU WILL REGRET IT.
Someone at work recently said that people who can't afford to buy a home in North Jersey are just jealous. She also said that if you can't afford to live in North Jersey then you need to move to another state. I overheard this conversation she had with another person. I wanted to pounce but just walked away.
By the way, I am a home owner in North Jersey and I'm hoping that the prices crash because I think it's an absolute crime what happened to the housing market in the last few years.
I could buy now because my income is higher and I have a wad of money to put down. But when I was looking in 2002 it was already out of control. I actually had a bid on a house where I was the high bidder and it was given to the other couple. It was nice and was priced more or less reasonably but equal value houses in the neighborhood now are stratospheric. I am waiting for the sh!t to hit the fan.
I am only worried how bad it will get. We have not experienced depression in our lifetimes but the excesses of this bubble from the stockmarket (we never got the hangover from it as it went into housing) to the bubble in housing will be a double whammy.
depression? I don't think that will happen.
I'm sorry to have to predict that there will be horror stories, and they will be big, bloody and visceral. However, it is going to be a very thin swath of the population.
The victims, anyone who is not a big income earner, who lived a dramtically different lifestyle based not on their earnings, but on extracting value from their homes.
The embarassing thing will be seeing people who simply cannot retire. They will need to work until they are six feet under. If they are workaholics, then maybe this situation is a fine resolution.
The uninitiated will always find a way to separate themselves from their money.
Yeah there are bellhops buying condos, but every decade has it's own trap for the unwitting.
Condos, Boston Chicken franchises, buying a Mr. Softee truck for Fairbanks Alaska. What's the difference? the outcome is the same
I am not hoping for anythhing like it but with all of the excesses Especially government largesse in excess.
Chitownfinance, how do you see the trade imbalance, budget deficit and household debt playing out?
It looks ugly to me and the longer the day of reckoning gets pushed off the worse it gets.
Just me speculating. But all of it scares me or am I just chicken little?
I think they meant "committed" like to an institution.
Japan Hoing Kong real estate prices went to absurd levels and eventually collapsed down over 60% in both cases.
leveling off moderation. This is the new gimmick psychological warfare the greedy real estate industry uses to keep people overpaying for ridiculously high prices.
NOONE OUT THEIR REPRESENTS THE BUYERS IT ALL ABOUT THE SELLERS AND THEIR F"" COMMISSION.
DO NOT BUY ANYTHING AT THESE RIPOFF PRICES. THAT MEANS AT LEAST 25% DISCOUNT AT A MINIMUM.
"Chitownfinance, how do you see the trade imbalance, budget deficit and household debt playing out?"
Complete madness. It reflects a macroeconomic system that is clearly in a state of dis-equilibrium in the long-term.
With too many variables and structural impediments, any system can be held in a given range for short periods, but ultimately TIME wears you down and brings everything back to the mean (hence the theory of "mean reversion").
That does not necessarily predict LOWER real estate prices, but as has been stated ad nauseum, long-term prices in line with incomes.
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RickJ
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