Saturday, March 25, 2006

Price Reduced! 3/13 - 3/25

Welcome to another edition of Price Reduced!

For all the newcomers to this blog, Price Reduced! takes a look at a handful of significant price reductions across Northern NJ. The purpose of this exercise is to serve as proof that the Northern New Jersey real estate market has long since been overvalued and has started the long hard decline back to the mean. These listings are in no way an endorsement by myself, nor do I believe they are a bargain or a value. Even reduced, I still believe these homes are still grossly overpriced.

There were a significant number of price reductions over the period, 1578 to be exact. The average price reduction for the group was approximately 4.3% off the prior list (not original list). The total dollar reduction was a staggering $39 million dollars.

On to the list!

MLS# 2233936 - Montclair, NJ
Original List $1,695,000
Previous Price $1,450,000
List Price $995,000 (Price Reduced 31.4%, 41.3% off Original List)

MLS# 2245996 - Bloomingdale, NJ
Previous Price $549,000
List Price $399,000 (Price Reduced 27.3%)

MLS# 2087848 - Franklin, NJ
Previous Price $1,200,000
List Price $899,900 (Price Reduced 25%)

MLS# 2255980 - Montville, NJ
Previous Price $2,400,000
List Price $1,900,000 (Price Reduced 20.8%)

MLS# 2257633 - Pompton Lakes, NJ
Previous Price $495,000
List Price $395,000 (Price Reduced 20%)

MLS# 2214336 - Union, NJ
Original List Price $625,000
Previous Price $499,000
List Price $399,500 (Price Reduced 20%, 36.1% off Original List)

MLS# 2105478 - West Milford, NJ
Original List Price $249,900
Previous Price $199,900
List Price $159,900 (Price Reduced 20%, 36% off Original List)

MLS# 2110202 - Hopatcong, NJ
Original List Price $289,000
Previous Price $255,000
List Price $210,000 (Price Reduced 17.7%, 27% off Original List)

MLS# 2256232 - Piscataway, NJ
Previous Price $399,900
List Price $339,900 (Price Reduced 15%)

MLS# 2235696 - Washington Twp, NJ
Previous Price $869,000
List Price $749,000 (Price Reduced 13.8%)

MLS# 2252084 - Maplewood, NJ
Previous Price $1,150,000
List Price $995,000 (Price Reduced 13.5%)

MLS# 2208232 - Wayne, NJ
Original List Price $1,350,000
Previous Price $1,250,000
List Price $1,085,000 (Price Reduced 13.2%, 19.6% off Original List)

MLS# 2254014 - Summit, NJ
Previous Price $475,000
List Price $414,000 (Price Reduced 12.8%)

MLS# 2241487 - Westfield, NJ
Original List Price $824,500
Previous Price $799,000
List Price $699,000 (Price Reduced 12.5%, 15.2% off Original List)

MLS# 2220885 - West Caldwell, NJ
Original List Price $575,000
Previous Price $539,000
List Price $475,000 (Price Reduced 11.8%, 17.4% off Original List)

MLS# 2226699 - Harding, NJ
Previous Price $22,000,000
List Price $19,500,000 (Price Reduced 11.4%)

MLS# 2209563 - Wyckoff, NJ
Previous Price $1,250,000
List Price $999,900 (Price Reduced 11.1%)

MLS# 2245921 - Woodbridge, NJ
Previous Price $449,900
List Price $399,900 (Price Reduced 11.1%)

MLS# 2257493 - Bernardsville, NJ
Previous Price $997,000
List Price $887,000 (Price Reduced 11%)

MLS# 2226709 - West Orange, NJ
Previous Price $695,000
List Price $625,000 (Price Reduced 10%)

MLS# 2229698 - Millburn, NJ
Original List Price $1,775,000
Previous Price $1,649,000
List Price $1,495,000 (Price Reduced 9.3%, 15.8% off Original List)

MLS# 2208171 - Franklin Lakes, NJ
Original List $9,995,000
Previous Price $8,495,000
List Price $7,750,000 (Price Reduced 8.8%, 22.5% off Original List)

Caveat Emptor!
Grim

13 Comments:

Anonymous Mar Mar said...

Grim, I love your posts, especially "Price Reduced" and all of the "Lowballs", but please comment as to why I can't get these deals? It seems to be a very small percentage of the market in which these deals occur.

3/25/2006 08:10:00 AM  
Blogger grim said...

Well I'd love to hear your story, as would other readers here, why not give us a little more info.

There have been very few, if any "deals" in the past few years. I still believe many of the lowball and price reduced listings to be dramatically overpriced.

The reason I post this data isn't to point out great deals or give people leads on them, it's to illustrate the changes in market psychology. You really have to go back and look through all of these from the beginning.

Without knowing more about your situation I really can't say. But two factors seem to be bubbling up as the most common.

Patience & Emotion

grim

3/25/2006 08:44:00 AM  
Anonymous Anonymous said...

Grim,

How about "Price Reduction" compare to last year?

Thanks.

3/25/2006 08:51:00 AM  
Anonymous Mar Mar said...

Grim, I must admit I am rather impatient at this point......it appears to me if I don't buy now the prices will continue to increase. I have only been looking for about 4 months now in the Morris/Essex bordering area with no luck. Most people (realtors) say I will not find anything in my price range (<$300K) and I should try to increase my price range, although I do not have the means to do so.

You make a good point in your previous post that even the lowballs are still overpriced. It appears I will have to take it one step further in my homehunting process and go sub-lowball (40% less) and see what happens. I believe the sellers are so spoiled that I will never find a "deal".

3/25/2006 09:09:00 AM  
Anonymous Anonymous said...

Mar Mar Said--
"Grim, I must admit I am rather impatient at this point......it appears to me if I don't buy now the prices will continue to increase. I have only been looking for about 4 months now in the Morris/Essex bordering area with no luck. Most people (realtors) say I will not find anything in my price range (<$300K) and I should try to increase my price range, although I do not have the means to do so."

I was fed that same info in 1989 - please be patient do your own research and take the info from your realtor with a grain of salt.
Seller's and realtors alike are not all aware of what's going on, there are many indicators to them that this market is the same.You now have the benefit of the web to glean your own information, use that benefit.

KL
(realtor)

3/25/2006 09:17:00 AM  
Anonymous Anonymous said...

Its seems like the price reductions are more a sign of bad realtors than anything else. From what i have seen regarding days on market statistics, property will sell quickly if it is priced properly relative to its value - not to last years comps.

People who price things like it was 2005 are just fooling themselves

3/25/2006 09:18:00 AM  
Blogger JMW977 said...

mar mar,

If you're currently living in a place where you can stay for another year to eighteen months, why not just sit back and watch the show?

The downward trend is just starting to gain momentum.

Patience...

3/25/2006 09:57:00 AM  
Anonymous Bubbled Out said...

Mar Mar, I have to agree with jmw977, the decline is just starting. If you have patience, you will be well rewarded. Don't get discouraged. Sellers need to have their properties sit on the market for a long time before they fully understand that the party is over. The psychology is slowly turning, rising inventories will produce more competition, and will initiate declines in asking prices.

I am a recent seller of a $1.5M house (closed Oct.) and due to bad pricing advice from my realtor, it took me 3 yrs. to sell from an original listing price of $2.2M. It was a while before I understood how overpriced my property was, but I also had no pressure to sell. Sellers will get the message eventually. Just have patience. I expect there will be some real seller price concessions if they can't move their properties during this spring selling season.

I now rent and expect prices to decline over the next 18 - 24 months.

3/25/2006 12:36:00 PM  
Anonymous Mar Mar said...

OK, It's not the waiting that has me impatient/annoyed/perplexed/etc.....I have agreed with all of your views since I have been reading Grim's blog. What getting to me the most is that if I rent for the next 12-18 months I will be spending @$24K. Is this $24K better spent towards a more expensive home now or should I write it off as a loss until the bubble bursts? I know the answer.....with mortgage rates over a 30 year period I will save $24K, but I can't predict what the interest rates will be in 18 months and nor can I predict how much I am missing out on in tax deductions. It just seems as though I will be throwing away $24K (as it seems I have been doing since 1998 when I began my career and when I should have purchased).

3/25/2006 01:00:00 PM  
Anonymous Anonymous said...

What is going on in the Morristown area? I was out there today, and all I saw was lawns plastered with "For Sale" signs--lots of yellows from Weichert.

Has there big a spike in listed properties there? Actually, it looks horroble with all those signs sticking up in the front lawns.

Thinking back to the '89-'91 bust, I don't recalling seeing the volume that is out there today, and I lived in the area and was looking for a house back then.

Any insights?

Jerry

3/25/2006 01:00:00 PM  
Anonymous bubbled out said...

mar mar, I believe that you will save much more than the $24k you are spending to rent if you wait.

I expect a 20 - 25% decline in current prices which works out to at least a $60k savings on a $300k property.

If you buy now, you will be spending about the same $24k a year in mortage interest, taxes and maintenance, and will have bought into an "asset" that is declining in value. That's worse than renting since you will have a huge downside risk and very little chance of upside potential.

Also don't immediately assume the tax benefits will be that wonderful. You should check with an accountant to find out what the actual benefits would be in your individual circumstances.

3/25/2006 02:28:00 PM  
Blogger desi dude said...

It just seems as though I will be throwing away $24K

i dont understand this logic. esp when fairly knowledgeable people confess it!

a 10% reduction on a 300K home over two years is worth more than 24K thrown on rent!
I see that some else already made this point. dut what the heck!

3/25/2006 09:10:00 PM  
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4/18/2006 09:12:00 PM  

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