Saturday, March 11, 2006

Buyer sentiment rapidly changing, Sellers feeling pain

I came across this bit in Realty Times this morning, just more examples of the rapidly changing real estate market:

Ask Realty Times

Question: We purchased an ocean-front condo in south Florida last May. We've decided we want to sell. However, according to our real estate broker there have been few to no showings because people are just not coming to look and if we do sell at this point we'll loose anywhere from $75,000 to $100,000 or more. We understand that the real estate market is flat right now, but how shall we understand that (a) no one is looking and (b) we will be suffering such a large loss?

Answer: If you're a short-term speculator you have a lot of risk in selected markets and with selected projects. There is a belief among some buyers that in certain areas of the country condo units have been grossly oversold to investors and speculators. There is little reason to buy -- if this theory is true -- while prices are still declining.

Anyone else think that buyer sentiment isn't changing incredibly quickly? And before you start to rationalize why the Northern New Jersey market is 'different', you should go back and read this piece, Northern New Jersey Among Riskiest Real Estate Markets, which found Northern New Jersey to be just as risky (or more) than Southern Florida.

Even the realtors are changing their tunes (From Realty Times Market Conditions Report for NJ):

"There were more homes coming onto the market this month and about the same going under contract as in January but much less actually being sold. The average asking price is about the same.

The Spring Market is here and more and more homes are being listed for sale. We have passed the time of the double digit rise in home values and now is the time for Sellers to realize this and begin to rethink the market position of their homes. If Seller's continue to list their homes at Yesterday's Prices…more and more homes will remain on the market as buyers have more to choose from."
- Leonard Klein, Realtor

"The Luxury market has leveled off. Rising interest rates, and double digit increases, are already "OLD" news." - Edward Meyers, Realtor

"For those Sellers who wish to market their home in this Spring Market, I recommend pricing aggressively, and make sure you are represented by..." - Susan Laskin, Realtor

"...sales activity in January ran 12% less than January 2005 indicating that the weakness in the residential market which began in October has carried over into 2006. Further evidence that the market has softened comes from the continuing increase of unsold inventory which grew by more than 2,000 homes in January and now stands 46% higher than 1 year ago. Home buyers will clearly have much more to say in determining the selling price of a home in 2006 than was the case last year." - Spring Otteau Report

(emphasis added)

Caveat Emptor!


Anonymous Anonymous said...

Lower prices here we come!

Clearance sales may have to wait another 6 months.

3/11/2006 08:42:00 AM  
Anonymous Anonymous said...

We just sold this week in FL - House sat on market for a year and we sold for $100K less than we paid a year ago. Too many hurricanes, new construction, etc. We took the loss and got out while we still could get a buyer. There are thousands of places for sale and still even more being built.
We are renting in NJ and see the market leveling off here too; hopefully we will be able to recoup some of our loss when we buy.
I suggest you price your FL place low (by owner) cut out realtor, and take what you can, if you get an offer. Good luck.

3/11/2006 08:45:00 AM  
Anonymous Anonymous said...

New Jersey voted the 5th most livable state to live in!

3/11/2006 08:54:00 AM  
Anonymous Anonymous said...

Holy Smokes!
Fire Fire fire Rush for the EXITS!
Prices are plunging!

Reality hitting hard.

3/11/2006 08:55:00 AM  
Blogger lisoosh said...

Its turning slower here because people still think that "in this area it is different, there are no more homes, we are all built out, people are moving to Jersey all the time, yada yada yada".
Does anyone know how many properties in New Jersey are investment properties? That would include second homes, rentals and flips. My area has a few McMansion flips but few rentals. The shore is full of them but how about Hoboken and Jersey City?

3/11/2006 09:29:00 AM  
Blogger Richie said...

I just saw 2 homes in my town back on the market. Why is this so interesting? Just two weeks ago both of these homes had "UNDER CONTRACT" signs on them.

Now, one of them just has the lonely "for sale" sign, while the other has an open house tomorrow.


3/11/2006 03:32:00 PM  
Blogger skep-tic said...

realtors are slowly waking up to the fact that if sellers don't cut prices, there won't be any sales. the question remains whether they understand just how far the market has actually fallen in the last six months. 5% price cuts might have worked last August, but not now

3/11/2006 03:39:00 PM  
Anonymous Anonymous said...

"I just saw 2 homes in my town back on the market. Why is this so interesting? Just two weeks ago both of these homes had "UNDER CONTRACT" signs on them."

Saw the same thing near me. Two very nice homes, well maintained, where the buyer bailed during the 3-day attorney review period.

Now the houses just sit...

3/11/2006 03:52:00 PM  
Anonymous Anonymous said...

More price drops...

$75,000 price drop:
63 Great Oak Drive, Short Hills
$1,175,000 => $1,100,000
Days on Market: 12

$26,000 price drop:
15 Hobart Avenue, Short Hills
$925,000 => $895,000 => $869,000
Days on Market: 55

This one was withdrawn from the market after the first open house last week:

11 Pinewood Court, Short Hills
Asking: $1,295,000

Must have decided to bail when no takers jumped on...

3/11/2006 04:01:00 PM  
Anonymous Anonymous said...

Low-balled this week and the seller was insulted! I was insulted that I was lured to a home where two of the bedrooms has NO heat--didn't think they qualified as bedrooms. Found out he has two offers on the table, but neither are countering to his "magical" number.

He did not even counter my offer! Gee, I'm insulted :-)

3/11/2006 07:09:00 PM  
Anonymous Anonymous said...

Why real estate commissions will fall

3/11/2006 08:40:00 PM  
Anonymous Anonymous said...

I just learned of your blog and have found the comments great!I like the list price and selling price info.That is a wake up call.I came online to find out how much of a drop is happening. .I am considering a condo in South Jersey near C/Hill for my daughter.Was at $238 now at $199.Should i offer 160? or wait?Any comment will be appreciated. Thank You All

3/19/2006 02:05:00 PM  
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