Weekend Open Discussion
Open Discussion for this weekend
Observations about your local areas, comments on news stories or the New Jersey housing bubble, Open House reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let's have them.
For readers that have never commented, there is a small link on the bottom of each new message that reads "# Comments". Go ahead and give that a click, you might be missing out on a world of information you didn't know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.
Caveat Emptor!
Grim
Observations about your local areas, comments on news stories or the New Jersey housing bubble, Open House reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let's have them.
For readers that have never commented, there is a small link on the bottom of each new message that reads "# Comments". Go ahead and give that a click, you might be missing out on a world of information you didn't know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.
Caveat Emptor!
Grim
72 Comments:
Developer offers plan to construct townhouses
K. Hovnanian, one of the state's largest developers, has filed plans with Rockaway Township to build 188 age-restricted townhouses along Green Pond Road on a piece of property that was originally approved for a shopping center.
...
K. Hovnanian has built Four Seasons communities across New Jersey, including complexes in Bridgewater, West Paterson and Warren Township. Another is under way in Parsippany, Fenichel said.
Plan to make over the waterfront roils Little Ferry
Plans for redeveloping the Hackensack River waterfront in Little Ferry ran into trouble Thursday night with broad opposition voiced by residents and property owners.
Local officials want high-end housing and retail space to take the place of old industrial plants that line the waterfront in the southern Bergen County town, but 150 protesters packed borough hall for the first public hearing.
Critics say the plans have been hatched in secret and fear they will involve the town using its powers of eminent domain to seize private property and hand it over to private developers.
Residents hit Highland Cross condo plan
Developers proposing to add condominiums to the Highland Cross Redevelopment Area heard residents sound off on how an influx of new residents could alter the character of the community and increase the cost of public services.
...
Citing a declining market for office space, however, the developers are now proposing to include luxury condos and nearly double the redevelopment site, which straddles the boundary between Rutherford and the Meadowlands District. The developers said that 20 percent of the Rutherford section of the site would be retail, with 80 percent residential.
Critics find fault with housing plan
Soaring retaining walls and worst-case scenarios involving the nearby Ramapo fault line took center stage as plans were unveiled for a controversial housing development off Route 202.
Vista Bahn II calls for 13 homes on 35.5 sloping acres between Seminary and Marion drives. Two new cul-de-sacs, one leading from Route 202, would be built for access to the development.
Developer to fight Teaneck's dismissal of condo application
A proposal for a condominium complex that was to go before the Board of Adjustment next month now appears more likely to end up before a state judge.
The zoning board Wednesday dismissed the application for the five-story, 52-unit complex on the southwest corner of DeGraw Avenue and Teaneck Road, after the project's developer rejected a previously agreed-upon March 29 hearing date.
The proposed luxury complex would require several variances and faces opposition from nearby residents who say it does not fit the character of the neighborhood.
Peapack-Gladstone considers age-restricted housing
After struggling with developers for years over an 86-acre tract formerly owned by Lucent, across from the Pfizer pharmaceutical complex, the Peapack-Gladstone Land Use Board this week began hearings on plans to build a 68-unit age-restricted community on the site.
The borough council in December unanimously voted to create an overlay zone for the property, permitting residential homes in the commercial site along Pottersville Road and Route 206. That paved the way for Peapack Residential Development Associates to begin a major site plan review for 33 duplexes and two single-family homes.
why are you so concerned with savings rate? reading your prior postings, you put a lot of weight on its overall value as an economic metric. I think you are misled. A negative savings rate isnt a bad indicator on its own. You need to factor in other variables. Persons wealth is not all derived from a paycheck. Other revenue sources can and do affect spending patterns. You mentioned 1932 and 1933 as only two other periods when the savings rate was negative. This was during the great depression, not prior to it. Negative savings was a result of economic stress and hardship, not the leading indicator of an impending fiscal disaster.
Today, many more people have investment ownership, disproportionately higher than earlier periods. Your overall wealth and propensity to spend is driven by these factors as well. Payrolls and hourly wages have been relatively stagnant in the prior three years. However, real estate, credit and equity markets have shown above normal gains.
So, my point is that if you happen to spend as per your normal spending habits plus a percent of what you made from other sources of income, and your paycheck isnt larger, your personal savings rate will be negative. But, economically speaking, you are not worse off.
I will say it again. I don't see the attraction that age-restricted housing has for the buyer. I see why the towns like it. The market analysis done by Troll Bros. showed demand for it is waning not growing, that is why they killed a project in E. Brunswick.
"However, real estate, credit and equity markets have shown above normal gains."
This is why real estate will revert back to the mean. gdp grows on avg 5%. when asssets appreciate way beyond this rate they are ahead of fundamentals.
Housing normally over history appreciates about 5% a year. 10 years of appreciation just occurred in 3 years. It's time for giveback.
Liberal use of credit has spurred future consumption. At some point a retrenchment will take hold and credit expansion will slow dramatically.thus less fuel for the housing bubble.
Link to "Table of Equalized Values"
http://www.state.nj.us/treasury/taxation/lpt/lptvalue.htm
Here is a subject that should be some blood boiling.
What will be the relief for the folks that are caught short? God forbid that people loose a house , and have a ton of debt and not get bailed out!!
Anyone have thoughts on how this will play out and how us sitting on cash will be harmed?
CDF
Thanks anon for Treasury information. It fantastic info. 2 -2.5 times assessed ridiculous. I would think maybe 1.5 times should be more appropriate.
Melchior --
Great tip. I just went there, though, & did not find a link for "Table of Equalized Values." I did find a link for "Coefficients of Deviation" and downloaded a pdf for my county. But then when I returned to the treasury url, the "Coefficients of Deviation" link was mysteriously gone.
Am I going insane or should I start developing a conspiracy theory? In the meantime, I do have the "Coefficients of Deviations" data for my county and would love to understand how better to interpret it from anyone out there who can shed light.
Cass
http://news.bbc.co.uk/1/hi/sci/tech/4726300.stm
OK, I like Grim but sometimes I think he is off the mark. Just when I think he is seeing men behind trees he proves me wrong.
This is an article on increasing retirement age, but also talking about 50 year mortgages.
CDF
Melchior,
I don't see what the value of knowing the appraisal ratios is other than to look at an assessment and seeing what it's yearly value on the market is.
BTW, those coefficients are used by county governments to assess taxes to the municipality. Because some towns never reassess (or very rarely, Like when a gun is pointed at them) they need these coefficients. I've worked in county Government so I know a little bit about what I am saying.
Cass,
Same thing happened on the census vacancies tables for 2005 Q4.
vacancies
Cass,
I meant too finish saying that their may indeed be a conspiracy. That table dissappeared
North East home vacancies up from 1.2% to 1.6% YOY. Is this a sign of excess units being built. It is the highest rate by region in the country.
Census
Melchior,
Fair enough. It still is another source of info on housing prices. I was aware that the state kept these records but not that they are online. Thanks for sharing.
Here is another one to ponder (in addition to the vacancy rates)..
The homeownership rate declined in 2005.
Started the year at 69.1%, ended at 69.0%. Peak of 69.2% was set in the fourth quarter of 2004. Now, the error is great enough to explain this one away, but it is certainly a trend worth watching.
grim
Grim,
Could BK's and lack of willing buyers account for that dip in ownership?
America's most dangerous 'housing bubble'
http://www.shns.com/shns/g_index2.cfm?action=detail&pk=HOUSING-BUBBLE-02-16-06
NJ Sucks, good article. Much of what is covered in that article, is talked about here:
http://www.housingbubblecasualty.com/
OK I know we've blown past this anonymous 10:19 comment but I just have to say enough already with the blather about how Americans have "other savings" besides money in the bank stuff.
Listen, the deal is that the Average american will take a whopping 55,000 into his/her retirement now from 401k savings - that is LOUSY. Couple that with the potential for negative home appreciation and tighter bankruptcy laws and you have the makings of a big, old pauper class.
Whichever boneheads want to remake social security should remember that even when given the choice, americans can't or won't save enough in retirement plans to live on - expecting them to invest in the stock market is sheer idiocy.
Anon 7:19,
Right with ya.
anonymous 7:19
I couldn't agree more regarding Social Security. Did you know that the Bonehead-in-chief put the proposed privatization of Social Security into the latest budget, even though it received no support from Congress or the people? There's no bonehead like an arrogant bonehead, I always say!
Anon 7:19,
Can you elaborate on "the Average american will take a whopping 55,000 into his/her retirement now from 401k savings" ?
I'm not sure what you're saying here.
Former school gets back in session with classy condo project
People have debated what to do with Bloomfield's South Junior High School since the school closed nearly 20 years ago.
Some pushed for a condo complex or senior citizen housing and one plan had the district leasing the property to a private school for special-needs children.
...
Finally the fate of the 67-year-old building has been decided.
Instead of empty classrooms, loft-style condominiums will be housed in the historic Franklin Street building. The plan calls for 114 units with hardwood floors and granite countertops, ranging in size from 650 to 1,400 square feet, some of them rooftop penthouses.
WEST PATERSON - Construction of an adult community at the site of the Tilcon Quarry is moving full steam ahead despite, "minor problems," and borough officials hope to earn much-needed tax revenue from the development by next year.
A spokesman for K. Hovnanian Homes, the company building the 814-unit development for people over 55, said the project is "on schedule," despite minor weather delays.
...
So far, a water tank and the concrete foundations for three buildings have been built, and 73 units have been sold, Fenichel said. Prices start at about $400,000.
Link for that one:
Adult housing 'on track'
Grim,
Seeing how much of NNJ is becoming built out I don't see the wisdom of selling any municipal property. It is an accounting gimmick to stave off inevitable tax hikes. What do you do when 20-30 years down the road your older residents have died off or moved away and now you have a fresh bunch of young families. Bad planning, bad leadership imho.
Two,very unscientific observations:
- Just scanning Craigslist and it seems like the bubbles in Jersey City and Hoboken are starting to pop. Lots of people trying to sell.
- Again, scanning Foxtons, it seems like at least one in 10 or 1 in 5 homes are empty based on the photographs (no furniture to be seen, at all).
I'm also seeing quite a large number of empty homes on the GSMLS.
It makes me wonder one thing. How many homeowners have purchased homes, moved, but have not yet sold their homes.
One of the large builders, when questioned about contract cancellations, cited the fact that buyers were cancelling due to the fact that they were having 'problems' selling their homes.
This is a potentially significant issue that really hasn't been explored yet.
Caveat Emptor!
Grim
People shouldn't read to much into the rise of hoboken listings - it is part of the usual post bonus suburban migration. Of course, it might be aided a bit by the impending opening of the Maxwell House development but even so, the number of for sale signs doesn't appear to be abnormally high for this season just yet.
Wait a minute, I thought Wall Street bonuses would make the Hoboken market roar and otherwise make the town bubble-proof.
Now these bonuses are a cause of increased inventory?
(sitting here scratching head)
well...if you had a choice,and a large bonus, would you live in NYC or hoboken? Alternately, would you choose summit/short hills or the like if you had kids, or hoboken? Given the transitional nature of the community and the poor school system, the rise in sales right now is not surprising. Come summertime, it might be a different story.
Today(Sunday) I was driving in Riverside Ave(the next exit after route 21 when driving in Route 3 towards NY) and I saw from 17-20 Open house signs in almost every intersection. And these in a 1.5-2 mile length.
Also I also found out that a cousin of mine just bought a 2 family house in East Rutherford for $440,000 and he makes about $25,000 to $35,000 as a substitute teacher. How is THIS possible??????
This is going to end SO BAD.
Ignore the anonymous poster at 10:27. It's the same "bull" from the Kannekt (Hoboken) Real Estate Forum who keeps trying to convince others that the market is not tanking.
Good point...anyone who offers an opinion contrary to your must be an evil realtor spy.
My only point was that the rise in hoboken listings at this point of the year is normal - couples with kids will list their properties now to be able purchase in the suburbs prior to schools starting.
People tied to the wall street bonus cycle also tend to sell now since they have a better grasp on their financial situation.
Singles / couples with a partner going back to grad school also list now to adjust for that change. Every year for the past 4 years i've seen the same behavior.
The big test for the hoboken real estate market will be when Maxwell House opens - filling the high price point - and velocity - mid town development with an estimated 1200 units - opens. I suspect those developements, with their first phase opening later this year (at least for Maxwell, not to sure whats up with velocity), will cause havoc with the market as they flood the market. Between that and quality of life issues (double parked cars everywhere, traffic in and out of town getting to unbearable , interesting shops / restaurants being replaced by chains), i agree that hoboken market could be in for a big shift.
The amount of homes for sale in Hoboken may or may not be greater than in the same period last year. I can't say since I don't know what the current number of listings are or what they were last year.
However, I can say that there are a huge number of open houses compared to last year, or any other time I can remember. My impression, given all the open houses, is that nothing is selling and that sellers are desperate to attract buyers. I don't think we are seeing a normal spring listing season inventory build, I think we are seeing:
1.Homes from as early as late August still on the market.
2.A huge supply of "starter" two bedrooms that must be sold because the owner has committed to buying in luxury type two bedrooms like the Maxwell.
You see the star ledger "special" this week? Outlook 2006 "Housing Industry living large"
This newspaper strongly needs a reality check or should be held to some sort of accountability for their press. They need to stop coupling solely with realtors and begin doing some true journalism (Sleuthing, gathering facts, etc) instead of collecting one-sided quotes. They put in 2010 "prediction/projections" for median price value, fucking crazy - Predicting 60-140k increases in median prices across the state.
WTF? The article by Tracey Porpora starts off "Despite the lack of available land, developers are building homes across northern NJ to try to keep up with the strong demand for new residential real estate". The first few words are enough to know that the article is garbage. This comes from a writer of such fine articles as "The Three Flirting Moves That Never Fail" and "My grandfather holds the Guinness World Record for his 475 spoon rests". This author is a frequent writer for "Contemporary Bride" and has no business reporting on Real Estate.
The whole damn thing made me sick to my stomach. It sickens me to see that the RE industry is using the press to pressure the market into irrational exuberance.
Regarding the hoboken market, and the debate with the other anonymous, I think think the issue is not with the crappy 2 bedrooms, but will be with large number of $1 million plus high end units that end up on the market due to Maxwell. Based on the people I know who are planning on moving to Maxwell when it comes, none of them live in a starter 2 bedroom.
Crappy 2 bedrooms with an easy NYC commute can almost always be sold at some price; the high end units will run into much stiffer competition from NYC.
I own a 3 bedroom in hoboken and from seeing the sales process in the like units, I am very glad that I have no plans on moving for the next 5 or 6 years due to my wife's career. Otherwise, I would gladly cash in and rent.
I think the big debate, at least in the local market here, is whether the weakness will come from the bottom or top. Unfortunalety for myself, I think the top will push the bottom down.
I only went to one open house today in Hoboken. The condo was empty as the owners had moved about a week ago.
"I think the big debate, at least in the local market here, is whether the weakness will come from the bottom or top. Unfortunalety for myself, I think the top will push the bottom down."
On the low end of the bubble dynamic in Hoboken, I think you have quite a few people in the under 30 crowd who "panic bought" over the past two years. They ended up with what they could afford, which was mostly conversions west of Willow, but ultimately overpaid. I think that some of these people are trying to cash out now; witness all the open house signs on Washington pointing west.
Also on at the low end, I think you probably have quite a few married couples with one or two kids who maybe bought 4 to 8 years ago and are trying to cash out now so they can buy a house in the 'burbs. They probably planned to buy in the 'burbs all along, but the fear of the bubble bursting has probably helped to accelerate any long term plans to leave Hoboken.
Bloomfield's South Junior High School has sat vacant for 20 years. The windows have no glass in them and you can see the plaster peeling off of the walls through the windows.
For this property, it is positive for the town to sell it and get it on the tax rolls.
I don't know who would take the chance now and try to sells condos out of it.
For those who move into it, the Votech next door will allow for free headlight removal from their cars.
Anonymous said...
Bloomfield's South Junior High School has sat vacant for 20 years. The windows have no glass in them and you can see the plaster peeling off of the walls through the windows.
For this property, it is positive for the town to sell it and get it on the tax rolls......
They could lease it. It is very difficuly and expensive to get the property needed for a school especially if the anti emminent domainers have their way
I don't know who would take the chance now and try to sells condos out of it.....
Right with you there.
For those who move into it, the Votech next door will allow for free headlight removal from their cars.
Is that a comment on it being a bad neighborhood? If so , funny! Or is it a service of the auto tech guys?
What is going on with the old Demaio's Restaurant on Route 10?
If you don't NEED to be in this market to buy, I can't possibly fathom why you would be.
If you've been on the sidelines this long, it is not going to kill you to wait another 6 to 30 more months.
Chicago Finance said: "If you've been on the sidelines this long, it is not going to kill you to wait another 6 to 30 more months."
Predictions are just "educated guesses." It is simply a gamble to wait for prices to drop ... they may or may not; and by what percentage? and for how long? In the meantime, if you are in the market to buy a house--NOT MAKE AN INVESTMENNT-- and find something you love..... why risk losing it while waiting for some hypothetical bottom in what will be just a dip-- perhaps a deep and wide dip, but just a dip. So in 30 months, you'll just be that much more behind the curve.
And for all those bubble lovers out there, I am NOT a realtor.
Shailesh Gala said...
In NJ, if you see any new development, more than 60% to 70% are for ACTIVE ADULTS only. I do understand why people living in the Town want Senior Citizens (No children, no schooling cost to pay for). But my question is that isn't this discreminatory?
I know there are rules that builders cannot discreminate against Race, Gender etc.. But to my knowledge even Age is part of discremination criteria, right? Can't someone sue the Towns for approving Age Restricted Housing only?
Sorry to say it is an exemption in the law written in 1995. the following link explains it and its implementation. Its our wonderful congress at work.
hud rules
Don't mean to cheapen the dialouge but I received this in my fax today:
*Refinance Now and save thousands!!! - and we'll give you two airline tickets
Services include: Unlimited Cash Out - rates as low as 1% - -call today and ask about our mortgage repair and restoration loans.
Loan amount: $500,000 - Monthly Payment - $1608.20...et., etc.*
Of course, just your everyday low-end facsimile marketing which just about anyone would discount - I've gottent these before but this is the first one i received not geared toward the prospective buyer.
if you by a home at these prices you will be regretting it in 12- 18 months.
anon 1:38 - From my point of view, even though you may not be looking at a house as an investment, how can you consider putting out hundreds of thousands of dollars down and not worry about if that x hundreds of thousands of dollars will not be valued at less?
The possibility at the moment that you could buy a house and watch your equity head south for years should be at least a concern.
If others have experienced what I have, and I’m looking for my first home, something ‘I love’ is no where in sight. Many houses I’ve seen have sat for months and have been reduced and sellers are motivated, two realtors reinforced this yesterday – I looked at 3 houses.
The market has probably allowed me too much time to put emotion aside and pull out a calculator to really, really look at the positive and negatives of what the next several years or more could hold for me and how a better window could benefit me.
Anon 1:38 here
I'm not saying forgo research about both the house and the neighborhood before spending hundreds of thousands of dollars but I'm also taking the long view. I wouldn't advise anyone to buy now if they plan on moving in a few years. But if you plan on living in the house for a long time (more than five years at least) then who cares what market fluctuations occur in 18-30 months.
The longer you live in a house the less the chance that you'll lose money, and if the decision to purchase is for housing rather than to realize a profit then you are ahead of the game--because you've also enjoyed your home for all those years, which is priceless.
I'm speaking from experience having bought a house in Hoboken in 1986 at supposedly the height of the then-boom and have just sold it for a VERY nice profit (with multiple above asking offers).
I think many of the posters on this blog are young and expect more instant gratification from their house purchases.
Regarding 'not caring about the price of a home if you intend to stay there for a long time', how does that figure into the mortgage budget, when homes have increased about 100% in the last few years, and salaries remain flat?
Homes are simply too expensive today, relative to incomes.
The last anonymous, gravity matters does not understand. they think paying alot for a house is normal. Readjustments happen and he will be proven wrong. dont worry it is coming sooner than later.
Gravitymatters
I would love to open a debate on your topic... I'm sure all the women are dying to move NOW and all the men want to wait. I am in the same situation and looking in Bergen too. Your story made me laugh and your wife gave me inspiration for next Sunday!
Karen
To David.
What Blog?
I urge everybody to read the following article titled "Bubble with a Fuse". This could get MUCH worst that we might expect
http://www.thetrumpet.com/index.php?page=article&id=2050
Gravity Matters,
Along with grim, I just think the readjustment is going to be so big that in a few years if you have to sell you will be uside down on the loan. Patience is warrented here. I bought in the last go around (late 80's)with a bubble here in NJ,. and sold in 1999 just barely getting enough profit to cover my expenses. Many people I know didn't see prices recover until 2002.
Many on this blog think that it is atleast a 2-3 year wait for the real readjustment. BUt that is only my opinion, my wife is anxious as well.
NJ Sucks,
I don't think that article info is very good. Their number of $600 billion in resets is not for the next couple of years but is for this year. Next yeqar is around $1.3 Trillion. Making it closer to 2 trillion over the next couple of years. Which IMHO is wayyyyy scarier!
Metroplexual said...
"I don't think that article info is very good. Their number of $600 billion in resets is not for the next couple of years but is for this year. Next yeqar is around $1.3 Trillion. Making it closer to 2 trillion over the next couple of years. Which IMHO is wayyyyy scarier!"
If this is the case this means that people will try to refinance sooner than later and alot of them might find the door closed. Their only option will be to sell.
I bet you. Within the next 2 years alot of them will be in for a nasty surprise.
I personaly believe that the Information flowing on the Internet will bring the market down MUCH faster that in the early 90s since 80% of the people now do their house hunting online.
Sorry for the lack of updates over the past two days.. Had to deal with a nasty stomach flu. I'm finally back up on my feet now.
jb
I just do not see home prices falling that much in areas like Short Hills, Chatham, Madison and Summit. If anything I have noticed prices increasing. There are still a ton of people that are moving from the city to the burbs that I think do not really care. My fiance and I have been renting in Madison for the last 3 years and are ready to settle down but when you have idiots in Chatham selling their 4 room condos with 1 br and 1 bath for over 400k it is killing the market. I mean these places do not even have 1k sq feet and people are buying them. Yes, there are a couple around $325-$350k but those are still overpriced by at least 40%. If these idiots are willing to pay these prices (which they are)then the market in this area will never change.
I just found this blog, as we've reopened our house hunt to (mostly) Bergen County.
So, what's everyone's consensus on a place like Teaneck? Is it relatively protected by a bubble burst? We're looking in the 700k range. Thanks!
You're going to spend $700 to live in Teaneck?????? Do you have kids?
Karen
Yes, we have twin one year olds. We live in a Junior-4 in Manhattan and are rapidly running out of space, plus our lease is up in June.
Have you done research on the schools? I live two towns away. If you want to email me for more local info I wouldn't mind explaining it all. Kiwijacks@gmail.com
Yes, we've researched the schools somewhat, though not exhaustively. We do not plan to send the kids to public school, but we would like the option to be good enough to make our decision worthwhile. :-)
Also, of course, it's good for resale, once this bubble pops of course. ;-)
Thanks for the offer. I may take you up on it. What town are you in?
Grim, glad you're feeling better.
"If these idiots are willing to pay these prices (which they are)then the market in this area will never change."
First of all calm done take a deep breath. You said "idiots". Well just because someone does drugs or eats to much fast food does not force you to also.
It's irrational. Use some common sense. You want to COMPETE against a few irrational fools then you have to act like an irrational fool. Noone is forcing you to play their game.
Thinking sensibly is very difficult when lunacy is is running wild.Use your own independent thought processes instead of following the clueless masses.
Well said anon.
Post a Comment
<< Home