Sunday, January 22, 2006

Lowball! 1/16-1/22

Lowball! takes a look at home sales over the past week from a very different perspective. For those new to Lowball!, a lowball offer is when a buyer offers a significantly lower bid than asking in hopes that the seller accepts the offer. We take a list of home sales over the past week and pick out the sales that have the highest percentage difference between asking price and selling price.

Lowball! is to show buyers that the market has changed and buyers now have considerably more leverage than sellers. Just a short time ago, lowball offers would have been laughed at and discarded, however, not any more. The fact that so many under-asking offers are being accepted is clear proof that the market is changing.The list does not contain all sales, I hand-pick the most interesting sales from the list. These listings might be the highest dollar drops, biggest percentage reductions, or sales in towns that are thought to still be 'hot'. Please note, even with double digit percentage reductions, these homes are still incredibly overpriced.

Since so many readers were stopping by this weekend, I decided to get the newest edition of Lowball! out a day early. This is not a full week of listings so it's a somewhat shortened list. But don't worry, there were some great lowballs this week, pay special attention to the dollar reductions of the Chatham and Mount Arlington houses.

On to the list!

MLS# 2107679 - Chatham, NJ
List Price $1,325,000 (Reduced from $1,490,000)
Sales Price $1,000,000 (23.53% Lowball!)
$490,000 off Original List Price

MLS# 2096978 - North Arlington, NJ
List Pirce $390,000
Sales Price $300,000 (23.08% Lowball!)

MLS# 2083944 - Mount Arlington, NJ
List Price $1,200,000 (Reduced from $1,600,000)
Sales Price $950,000 (20.83% Lowball!)
$650,000 off Original List Price

MLS# 2102548 - Morristown, NJ
List Price $395,000
Sales Price $325,000 (17.72% Lowball!)

MLS# 2206022 - Clifton, NJ
List Price $349,900
Sales Price $305,000 (12.83% Lowball!)

MLS# 2073283 - Morristown, NJ
List Price $1,595,000 (Reduced from $1,699,000)
Sales Price $1,400,000 (12.23% Lowball!)
$299,000 off Original List Price

MLS# 2089621 - Little Falls, NJ
List Price $739,000
Sales Price $660,000 (10.69% Lowball!)

MLS# 2210288 - North Plainfield, NJ
List Price $329,900
Sales Price $295,000 (10.58% Lowball!)

MLS# 2222188 - Roselle, NJ
List Price $334,500
Sales Price $300,000 (10.31% Lowball!)

MLS # 2220013 - Kinnelon, NJ
List Price $995,000
Sales Price $895,000 (10.05% Lowball!)

MLS# 2200544 - Kinnelon, NJ
List Price $1,999,900
Sales Price $1,800,000 (10% Lowball!)

MLS# 2091699 - Montclair, NJ
List Price $849,000 (Reduced from $944,900)
Sales Price $765,000 (9.89% Lowball!)

Caveat Emptor!
Grim

18 Comments:

Anonymous jmw977 said...

I guess there's not much truth to the stories about only the high end being sluggish, huh? It looks as though the people at the bottom of this Ponzi scheme are starting to wise up, too.

Thanks again for all your hard work, Grim!

1/22/2006 09:53:00 AM  
Anonymous Anonymous said...

Your correct JMW. I can't wait to help one of these poors souls by taking to home off their hands at fire sale prices.

1/22/2006 10:39:00 AM  
Anonymous jmw977 said...

Anonymous,

How far do you think prices will drop? What price do you think entry-level will go to? Let's say for a 3BR 1BA in okay shape in a decent working class town? What's your jump in point?

1/22/2006 11:32:00 AM  
Blogger chicagofinance said...

jmw977:

Grim has it right. This "buyer's market" nonsense is just the latest sales pitch.

I wouldn't get preoccupied with timing things just right. You first and foremost must make decisions based on your family situation. Only after you deal with the major realities and limitations of your circumstances should you approach a purchase.

Sorry about the long preface, but it has to be said.

If you have already waited until January 2006, I cannot fathom why you would approach the market before the Spring of 2007. There is just too much opportunity that will become apparent at that point. Give or take six months earlier or later.

chicago

1/22/2006 01:25:00 PM  
Anonymous jmw977 said...

Chicago,

I have the same feeling about 2007.

I'm currently faced with having to get out of the rental I'm in because the building is being demolished to make way for new high end multiple family homes.

My gut tells me to rent another place for a year or so. I have been watching the RE market in NNJ with dismay for the past 4 years since I missed the boat in the mid-90's. I'm standing firm - I haven't waited this long to get in at nearly the top!

1/22/2006 02:47:00 PM  
Anonymous Anonymous said...

HI JMW, DON'T FEEL TOO BAD.
My husband and I are professional, when we moved to the Northe east from the south in the late 1998 we were sticker shock. We missed the boat. Actually our friends had been telling us that prices were going down since the year 2000. Now we have been renting for so long. The commute to work is 30 min every day from our rental. We were empty nesters but now we have grandchildren that likes to visit and we need more space. We have just been to a development this afternoon, the prices have not come down yet in Westchester. We have accumulated enough cash to pay for what we want to buy in cash. What do the wise people out there think we should do. Wait?

1/22/2006 03:09:00 PM  
Blogger landgrab said...

Anon - I don't think you need to wait until spring 07. See how things are going this summer. I have a feeling the market will be crowded with houses, and people will be hard-up to move.

When THEY don't sell, and the fall rolls around, my guess it that price reductions will be severe, and that when people jump in.

Buying cash - congrats!!

We just hope interest rates aren't over 7 in the fall.

1/22/2006 05:38:00 PM  
Anonymous Anonymous said...

landgrab,
My husband is not so optimistic. People in Westchester has plenty of money and the schools are good. Even now the prices are holding. He wanted to buy last year saying we cannot wait forever. "Wait till we are almost going to retire?" He wants a house and home NOW!!!! I was the one that found this website and house bubble 2. I thank Grim and Ben for their insights. We might lose all our hard earned savings. He hates living in an apt and have to go out and do laundry etc. Just not the kind of things to do at this stage of our lives. I just hope the waiting is worth it.

1/22/2006 10:22:00 PM  
Blogger desi dude said...

lady,
just go ahead and reant a home/condo with all features inside. sign a 2 year lease. you dont have to move till end of 2007.
by that time , you can have your pick of the homes!

1/23/2006 01:20:00 AM  
Anonymous Anonymous said...

desi dude,
You sound very positive. It is a well known fact that people that live in this town have plenty of old money. The house values hold in Westchester because it is a desirable area to live. We just were too cautious and misses the boat.

1/23/2006 01:54:00 AM  
Blogger grim said...

Please continue on with the "old money" discussion. I'm really not sure what that means, and how it protects an area, so I'd really like to understand it. What exactly is the rationale behind it?

grim

1/23/2006 01:02:00 PM  
Anonymous Anonymous said...

Grim,
I think Mo money from Ben's blog was the first one that introduced me to this phrase. I asked around and they say those are people that are born rich, inherited a lot of money or even realestate. In other words the bubble will not affect them. Correct me if I am naive or wrong.The rationale is that rich dad and poor dad thing ( I am exaggerating a little bit ). To go one step further, Rockefellors or Bill Clinton living in this area will not have to worry about bubbles either. There are too many of these people in Westchester I was told.

1/23/2006 01:38:00 PM  
Anonymous JMW977 said...

Anon,

You say you moved to the Northeast from the South in 1998. One characteristic about the NYC metro area is that there are pockets of "old money" all around the region. That doesn't mean that real estate is different this time. It's all relative. Yes, Westchester will always command more money than a blue collar town, but the prices have skyrocketed everywhere. In my opinion, prices have plenty of room to come down EVERYWHERE.
Just my humble opinion, of course.

1/23/2006 03:53:00 PM  
Anonymous Anonymous said...

jmw977
Thanks for the reassurance. Somedays I wish I have a house to go back to after a long day's work. The house we sold in Miami can never be replaced in the New York market.

1/23/2006 05:35:00 PM  
Blogger grim said...

I wouldn't put too much merit behind the 'old money' rationalization.. It seems more like grasping at straws for some kind of "bubble-wrap" reason.

I don't care if money is new or old. I care if it's smart or dumb. Old money disappears fast in frivolous hands.

In fact, I'd argue that any money made in Westchester real estate recently is decidedly new money, in new hands. I hear financing a high-end lifestyle in that area is rather expensive these days.

Just look to the past. What happens when old money picks up and leaves? Doesn't happen you say? Sure does. Just look to Eastside Park in Paterson, or Branchbrook Park in Newark. Both were certainly old money in their heyday as well. In fact, there are areas of Newark, Irvington, and Passaic that were considered upper middle class "prestige" neighborhoods in their day.

Amazing what can happen to these communities when the money starts to leave. Disinvestment.. Disrepair. The next thing you know you are left with.. well.. nothing.

If smart money knows anything, it's when to buy and sell real estate. It's not old money that financed the bubble, but believe me when I say old money will certainly finance it's recovery.

grim

1/23/2006 07:08:00 PM  
Blogger skep-tic said...

anon,

Westchester will always be expensive, but that doesn't mean it's not currently overvalued.

the old money effect is exaggerated. was this a realtor's explanation for the prices?

the reality is that there is a small amount of old money and a great many more people who are trying desperately to keep up with them by living beyond their means. once the credit well dries up, many of the latter group will be screwed.

you will have your chance. you've waited this long-- be patient.

1/24/2006 11:06:00 AM  
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