Saturday, April 01, 2006

Weekend Open Discussion

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.

As always, anything goes.

69 Comments:

Anonymous Anonymous said...

"Close to Home" - a prime time crime television show had an interesting story line. This episode happened to be about a guy getting revenge on the crooked appraisers, and realtors, and investors who caused him to loose his life savings by overvaluing his home. It was an eye opener to anyone still oblivious who thinks their homes are worth more than they are, then borrowed high $$ because of that. He sued and wo. It is only a televsion story, but it was very realistic.

4/01/2006 07:30:00 AM  
Blogger grim said...

I've been noticing alot of Foxtons signs lately. They seem to be getting more and more common each week. On our grocery trip last night (about 6 miles each way) we counted 4 Foxtons open house signs.

I noticed two new ones on my way back from work last night.

Even noticing Foxtons listings becoming more common on the GSMLS.

grim

4/01/2006 08:03:00 AM  
Blogger Richard said...

quality properties in good neighborhoods are still selling, just taking 20-30 days instead of the old 2-3. if it's not at the top of the heap for that price range, many are sitting with some being sold after 1 or 2 price reductions within 60 DOM.

4/01/2006 08:43:00 AM  
Blogger lisoosh said...

Richard -
In response to your question in a previous thread regarding how long those who hold out can wait I think I have an answer.
Just as many have been talking about the cycle of grief and how it applies to the housing market and sellers - anger, denial, fear, panic and acceptance, so too it can be applied to those waiting out the bubble. But those waiting are at a different point in the curve - mainly acceptance, the panic buying could be seen at last years peak.
I pushed to wait and my husband wanted to dive in. He especially suffered because it is "manly" to own a house but I forced him to wait because I am neurotically debt averse. However now, he is finally happy with the decision and positively giddy at the prospect of drops in prices.
Why?
Because he bought a car with a small loan and the financer said he had the cleanest credit he had seen in a year.
Because his friend wants to move to Florida but can't afford to.
Because friends panicked and bought houses without due diligence and are now suffering for not having pushed for careful inspections and taken time to check out the neighbours.
Because people selling are watching their houses sit and sit.
Because he is the only guy at work not sweating under a mountain of mortgage and credit card debt.
Because we can live on one income and weather any storms, such as lay offs or illness.
Because a new business opportunity came up and we can run with it - we have cash and are flexible.
Because our housing outlay is relatively static - no sudden increases in property taxes, so unexpected repairs.

Need I go on?

We will buy a house some day - when the prices are worth it. And we may even buy investment properties - but only when they are a steal.

4/01/2006 09:29:00 AM  
Anonymous Anonymous said...

Can't wait for the next Existing NJ Market Report. I've reduced my equity by "buying down" last summer. I only hope this market ends up as a flat one once the ups and downs average out in a couple of years.
I can't decide if I should have got completely out by renting or if my decision to buy down was something I'll end up regretting.

4/01/2006 10:07:00 AM  
Blogger Metroplexual said...

An article by Damon Darlin our favorite blogger over at the NYT Walkthrough. Basically and interview with two married professors in Pomona CA that wrote a paper on how there is no bubble. Shiller is interviewed as well for balance.

http://www.nytimes.com/2006/04/01/business/01bubble.html

Also front page of tomorrows New Jersey section of the NYT "Boom Bust or Breather". Just about the whole section is devoted to people and the current bubble not biubble thing. Also a primer on zillow.com.

4/01/2006 11:21:00 AM  
Blogger chicagofinance said...

Q: What kind of company is Countrywide?

A: The kind of company that would condone this behavior before being caught with their hand in the cookie jar in a very public place.


Mortgage Insurance Without End
Ellen McGirt
March 22, 2006: 4:20 PM EST
(MONEY Magazine) - QUESTION: I tried to get my private mortgage insurance (PMI) removed, believing that I could easily qualify because my condo had appreciated in value. I called Countrywide, my lender, and they said I needed an appraisal. I used the person they recommended ($580!), but Countrywide still turned me down. What gives? --Kristine Reynolds, Brooklyn

ANSWER You were smart to want to lower your monthly nut, but unfortunately there were a few hidden obstacles that derailed your efforts.

First, a quick lesson. Lenders require you to buy PMI when you cough up less than 20% as a down payment. This insurance protects lenders in case you default on your loan, which is why they're not usually in a rush to remove the coverage. But nothing is forever: The Federal Homeowners Protection Act says lenders must automatically cancel the policy after you've paid off 22% of your original loan, and you can request that the PMI be terminated when your equity reaches 20%. "With strong appreciation, you may have reached that golden level and not know it," says mortgage analyst Keith Gumbinger.

But there's another typical prerequisite. We dug through your mortgage disclosure notice, and page 3 states the conditions under which the PMI can be ended--including that you need two years of on-time payments before you can request the halt, equity or no equity. At the time, you'd had the mortgage only 16 months. Whoops.

Anyway, in good faith you shelled out $580 for an appraisal but were turned down because you were never eligible in the first place. (They should have told you this instead of advising you to go get the appraisal.) Worse, you overpaid by half because a PMI appraisal is less detailed and expensive than one you might get for, say, a mortgage refinance. (They could have told you this too.)

Countrywide was conciliatory when we asked that your request be reprocessed, and you are now officially PMI-free. You were also refunded $305 for the unnecessary appraisal. Plus, you were sent another $73 to help make up for PMI premiums you paid during the months you thought it should be lifted.

4/01/2006 12:28:00 PM  
Blogger Bubble-X said...

Grim-

I have been seeing tons of signs out there too. I mean A LOT.

We are going to shoot some more pics- maybe you can post some from your area too?

This is great seat-of-the-pants stuff- I have never seen so many for sale signs. Have you?

BubbleTrack.blogspot.com

4/01/2006 12:36:00 PM  
Anonymous Elric said...

For whatever it's worth: I've been watching the low end of the market (< 400k) in Fair Lawn for a while now.

Some of the old inventory that's been sitting for a while is standing firm with last year's high asking prices. However some of the newly listed stuff seems to be coming on at slightly lower prices. I'm starting to notice (not many, just a few) listings around 350k-375k that I believe would have been over 400k a few months ago.

Little by little. It's early yet.

4/01/2006 01:31:00 PM  
Anonymous Anonymous said...

Looks like Mills Corp is in trouble. It could mean some trouble for North Jersey real estate.

http://www.newsday.com/news/local/wire/newjersey/ny-bc-nj--millscorp-probe0323mar23,0,341623.story?coll=ny-region-apnewjersey

And I was looking forward to the first US year-round indoor Alpine ski resort in north jersey. :(

http://www.siteselection.com/ssinsider/snapshot/sf030804.htm

4/01/2006 01:56:00 PM  
Anonymous UnRealtor said...

Boycott open houses tomorrow! Let the sign-in books sit empty.

Help send the message that the bubble is over.

4/01/2006 03:48:00 PM  
Anonymous Anonymous said...

Another piece of evidence that its turning: at a completely dead open house that I was the only one to visit all afternoon in a heavily trafficked area of Passaic county last weekend, an uncharacteristically open Weichert realtor told me: "At the office these days, we are saying 'any offer is a good offer'"

4/01/2006 06:48:00 PM  
Blogger grim said...

I hope everyone was out enjoying the weather today and not thinking about real estate.

grim

4/01/2006 07:36:00 PM  
Anonymous Anonymous said...

would it be uncommon for a realtor to cancel an open house to show me houses in the area or is she full of it? i would think she would have somebody cover her open house.

4/01/2006 07:54:00 PM  
Anonymous Anonymous said...

"would it be uncommon for a realtor to cancel an open house to show me houses in the area or is she full of it? i would think she would have somebody cover her open house. "

I'd rather take interested folks to lots of homes than wait for lots of interested folks to come into one house (-: at least she know's you'll show up - no one has been showing up at the open houses
KL

4/01/2006 08:07:00 PM  
Anonymous Anonymous said...

good point.another indication the market is turning. and i have expressed extreme interest in renting and have 2 rentals on my list to see

4/01/2006 08:27:00 PM  
Anonymous Anonymous said...

lisosh thanks for the well reasoned response.
I hope others reread this everytime they have the temptation to buy an over inflated house.

4/01/2006 08:50:00 PM  
Anonymous Anonymous said...

BOYCOTT LOOKING AT HOUSES AND DO NOT SIGN THE REGISTRATION BOOK.

YOU WILL BE HARASSED BY A STARVING REALTOR!

GOOD SIGN FOR FUTURE BUYERS AT MUCH LOWER PRICES!

HEHEHE

4/01/2006 08:53:00 PM  
Blogger gravitymatters said...

>>>YOU WILL BE HARASSED BY A STARVING REALTOR!<<<

must admit... last couple of open houses I signed in, brokers called 2 or 3 times after, even though I made my disinterest clear when looking at the places.

desperate???

I sure didn't get those calls last year.

on a side note.... I can't help but sense a big time bust brewing on the gold coast (condo central) both cranes in the air & for sale signs EVERYWHERE! when viewing some online, the majority are EMPTY (can you say flippers), with only the price (same/similar models) separating most.

i'm still trying to figure out if there are any end users living in one (the mirabela?) on river rd in N. Bergen. brand new & supposedly luxury... however, it is on the wrong side of river rd, while being squeezed between a dunkin donuts & storage place.

IMHO, looks like a glorified rental to me... but then what do I know?

4/01/2006 09:19:00 PM  
Blogger Richard said...

westfield, summit and chatham are still selling briskly. you are seeing more price reductions though. example. one house in westfield started at $699k, then after 14 days dropped to $679k then after another 30 days dropped to $659k and now in contract. seems many sellers are setting their prices 5-10% above what the market will bear initially then slowing adjusting down. i guess not a bad play if you get out of the gate early and have some time to adjust to market demand during peak season.

4/01/2006 09:24:00 PM  
Anonymous Anonymous said...

"BOYCOTT LOOKING AT HOUSES AND DO NOT SIGN THE REGISTRATION BOOK.

YOU WILL BE HARASSED BY A STARVING REALTOR!

GOOD SIGN FOR FUTURE BUYERS AT MUCH LOWER PRICES!"

I have never called a person coming into an open house unless they have asked me to. I give them a list of homes that are similar in price and amenities to the one they are looking at, as they are leaving attached to that is my card. If they want to see them they call me. If they don't want to they don't call.
KL

4/01/2006 10:23:00 PM  
Anonymous Anonymous said...

Metroplexual,

I read some of that article and basically stopped when their assumption turned out to be just incorrect... they claimed that a home sold for $560K and across the street another home was renting for $2295... they assumed 20% down at a 5.7% 30-year fixed rate mortgage... according to my calulations, that monthly nut which doesn't even include their assumptions for taxes and maintence, comes out to be $2550. That's $250/per month in the hole!.... and their conclusion was that this home calculated to be a good buy! Am i missing something here?

4/01/2006 10:29:00 PM  
Blogger Rob Ryley said...

Perhaps Grim or Chichagofinance could take a look at the following paper, which argues against the housing bubble, based on cash flows from rent.

http://www.brookings.edu/es/commentary/journals/bpea_macro/forum/bpea200603_smith.pdf

My initial impressions:

The problems with the assumptions:
The conventional 20% downpayment. At such high levels, a 20% downpayment strikes me as unrealistic in the "bubble areas." It is pretty clear from the statements from Fed members that subprime borrowers are driving the housing market. That means "exotic" mortgages, and lower, even zero, down payment.

Growth in rents: Perhaps I don't understand their chart, but their table 9 would undercut the entire theme of their paper. The only way to have a positive NPV, and hence, underpriced homes, for most of the bubble areas is to assume at least a 3% growth in home prices. And this is assuming the conventional 20% downpayment. Looking at columns where zero price growth is assumed, the California markets, Chicago, and Boston are all grossly overpriced, even assuming 4% growth in rents.

Given the lax lending in the mortgage market, the required rate of return is likely to be higher than 6% used in the paper. A mere 3% increase in home prices is going to cause many borrowers to be upside down, given the leverage used.

I just don't see how a "soft landing" can work, even given this data.

4/02/2006 01:10:00 AM  
Anonymous sorry state of affairs said...

I saw (read) somewhere that there was a 50% increase in the number of vultures, opps, I meant Realtors in the last few years during the housing boom, looking for the easy money that was flying out of seller's pockets. It reminded me of hyenas on a kill. A quarter of the new jobs since 2001 have been in construction, mortgage finance, and related industries. Even the bad contractors have been busy, fixing up the POS that people have just paid way too much for, and because the "also new on the bandwagon" home inspectors (who have been wooing the new realtors) missed or ignored all of the defects they should have picked up on.
I suppose (hope) they'll all go back to flipping burgers, or working at the local WaWa. The demand for fast food and lottery tickets will never weaken.

4/02/2006 06:30:00 AM  
Anonymous Anonymous said...

Below is the monthly market conditions sent to me by a realtor:
__________

STILL! Waiting for the Spring Market

Although buying activity in February registered a 15% increase over January's level, it is currently running well behind last years pace confirming the slowdown in the residential market is continuing into 2006. Year-to-date buying activity is currently running 14% less than last year's pace while the inventory of unsold homes on the market is 61% higher than a year ago. By combining these indicators the resulting Market Swing of -75% indicates that the 2006 market has lost 75% of its strength as compared to last year at this time. While considerable demand still exists from the buying side of the housing equation, declining housing affordability will continue to dictate the "mood of the market". From the seller's perspective, more aggressive marketing and pricing strategies will be essential to restore the buyer's 'sense of urgency' that was prevalent in 2005.

ZIP Code: 07922

Approximate Location Boundaries: Warren, Short Hills, Mountainside,Watchung

Location Characteristics: Strong Desirable Area, Excellent Schools, Close To Transportation

__________

4/02/2006 07:23:00 AM  
Blogger Rob Ryley said...

Trying to post that URL again:

To a PDF lin of a paper by Margaret Hwang Smith and Gary Smith
"Bubble, Bubble--Where is the Housing Bubble."

http://tinyurl.com/qmxx4


For the HTML version (tables don't come out right)

http://tinyurl.com/qk5r6

4/02/2006 07:54:00 AM  
Blogger Metroplexual said...

Anonymous said...

Metroplexual,

I read some of that article and basically stopped when their assumption turned out to be just incorrect... and their conclusion was that this home calculated to be a good buy! Am i missing something here?.......

Not at all. The reporter is our favorite antibubble blogger at the walkthrough (ablog at the NYT). His favorit activity use to be cruising bubble blogs and lifting them for ideas. He then graduated to just writing what they said and saying that there is no bubble. I just thought I would throw out the article so that folks could think for themselves. BTW I came to the same conclusion.

The two profs are total eggheads. I don't follow their reasoning either. Maybe someone with an econ background can explain what it is thy are implying. Opportunity costs? I don't get it (usually I can.)



10:29 PM

4/02/2006 08:36:00 AM  
Blogger Bubble-X said...

God has spoken on the housing bubble :-). This was too funny!

BubbleTrack.blogspot.com

4/02/2006 09:15:00 AM  
Blogger Richard said...

entry level housing prices in the top towns are in the low to mid $600's. with a 30 year fixed at 6.5% and 10% down with say $7k a year in taxes that's a monthly nut of ~$4200 just for shelter. maybe i'm just a poor boy but that seems like an awful lot to me. this is why i believe the majority of the players in the housing market are existing homeowners who've all built equity over the last # of years. many of the houses i've been seeing in this market space being sold are step-up homeowners. those buying for the most part seem to be young double income no kids (who else can really afford it) looking to get in before the affordability increases further. what happens when they eventually want to have children? both will have to work coupled with childcare that can run $1000 a month. it's going to take a few years before we really see the cracks in this whole scheme.

4/02/2006 10:04:00 AM  
Blogger Richard said...

to clarify the prior post, most of the first time buyers seem to be young double income no kids types.

4/02/2006 10:06:00 AM  
Anonymous UnRealtor said...

$50,000 price drop:
MLS 2254520
57 Chestnut St, Millburn
$799,000 => $749,000
Days on Market: 27

4/02/2006 12:33:00 PM  
Blogger Newyawker said...

So I'm interested in what the sense is out there of the New York City market. I've been very much in the bubble bleachers for five years now, admittedly a pretty painful seat. As I look out there, I see many signs of softening, in California, in DC, and certainly in Boston.
But few signs of real softening--much less bubble bursting--in NYC. This isn't to argue that NYC won't change eventually. In the bubble popping of the late 80s, NY's real estate bubble popped first, and the West Coast didn't follow for two years. But when the West Coast's turn came, the losses were even worse there.
Still, I'm wondering what people are seeing out there in terms of the NY market, and if perhaps there are reasons that this market will not ultimately pop.

4/02/2006 12:35:00 PM  
Anonymous UnRealtor said...

Richard wrote:
"entry level housing prices in the top towns are in the low to mid $600's. ... this is why i believe the majority of the players in the housing market are existing homeowners who've all built equity over the last # of years."


Why would existing homeowners sell their home to buy a starter house?

I think your point contradicts itself.

4/02/2006 12:37:00 PM  
Anonymous UnRealtor said...

"I'm wondering what people are seeing out there in terms of the NY market, and if perhaps there are reasons that this market will not ultimately pop."


No market is immune.

4/02/2006 12:39:00 PM  
Anonymous UnRealtor said...

Here we go selling at a $100K loss:

320 Lupine Way, Short Hills
Closed June 2005 @ $1,300,000


Now here's the ad in today's Star Ledger:

SHORT HILLS $1,198,500 1-4 OPEN HOUSE 320 Lupine Way DIR: Hobart to Forest to Lupine. Glenwood CH Col perfectly presented inside & out, new cust kit w/granite, beautiful hdwd flrs, 4BRs, 2.5 bths, fin bsmt & more. Walk to school & train. Call Jane Goetz 973-376-6444 RE/MAX Achievers, Realtors

Published in The Star Ledger on 04/02/06

4/02/2006 01:02:00 PM  
Blogger JMW977 said...

This ad in today's Star-Ledger caught my eye, Essex County, Nutley for sale:

Desperate MUST SELL! Kick me while I am down. Best offer! Go to www.fsbo.com property ID #82546

Here's a link:

http://www.fsbo.com/detail_list.phtml?session_code=9a66fd3d11dfdbf0545b0437109ad99e&search=2&id=82546&search.x=14&search.y=6

Be sure to take note of the property size. I know this area well, tiny 1950's capes are the standard.

This particular property is located at the base of a steep hill, the basement probably floods during extreme storms.

4/02/2006 01:09:00 PM  
Blogger chicagofinance said...

This comment has been removed by a blog administrator.

4/02/2006 02:36:00 PM  
Blogger chicagofinance said...

“Rob Ryley said...
Perhaps Grim or Chichagofinance could take a look at the following paper, which argues against the housing bubble, based on cash flows from rent.

[edit]

My initial impressions:
Given the lax lending in the mortgage market, the required rate of return is likely to be higher than 6% used in the paper. A mere 3% increase in home prices is going to cause many borrowers to be upside down, given the leverage used.

I just don't see how a "soft landing" can work, even given this data.
1:10 AM”


You don't need to dive into the details of the paper to question its findings. Its conclusions are so fundamentally flawed, I think most interested parties can merely dismiss the paper as irrelevant.

That said, I reviewed the paper and believe your comment about its core model undercharging for risk is valid.

Among other items, they have conveniently sidestepped the issue of the expenses associated with owning. In a sense, their model is a Frankenstein [i.e. bastardization of finance], that uses data and cash streams from the renter's market, prices from a purchaser's market, and pulling risk from a financial instruments market.

On page 17, they put forward the assumption that the buyer never sells, and that I would point out that is a convenient way to avoid noting that relative to their cost of capital, future home prices are by definition NPV negative. Read: even at their unrealistically low 6% after-tax rate hurdle rate, long-term real estate appreciation is lower than 6%, so the cost of carry is negative.

I am also uncomfortable with the fact that they seem to have spent more time peer reviewing this paper with financial types rather than real estate types. Even then, the financial types are CFP’s, not CFA’s, Economist, Phd’s etc. As someone who has dealt with economists, finance professionals, the academic community as well as the financial planning profession, I would characterize CFP’s on the whole more applied than theoretical, and certainly less analytically rigorous, so I wouldn’t be parading the review of 27 CFP’s as some gold standard. However, do not confuse this comment with the fact that in my profession, a CFP is a valuable and important credential. It is just that in this theoretical discussion, the author’s are miscasting the utility of experts in applied thinking.

My last comment is that GIGO [garbage-in garbage-out] comes to mind. What is the source of their market data? The idea that they remotely make various assessments about different regional markets is laughable at best, or downright reckless at worst. Performing data analysis while needing to put forward assumptions about the functioning of “Yahoo! Maps” ugh…..

Put this one in the circular file, but market sure to shred it first, so no one is tempted to pull it out.

chicago

4/02/2006 02:36:00 PM  
Blogger Richard said...

"Why would existing homeowners sell their home to buy a starter house?

let me clarify. those already in starter homes are stepping up to larger homes. reviews of tax records of these properties have shown most bought around 7-10 years ago in the low to mid $200's and are now asking low to mid $600's. no one saved money here. this was just living life. to 'get in' to a starter home with no prior equity would require substantial income or a 20%+ down payment and 1 person having a very good income (~$200k+). this is why you see double income no kids mostly interested in these properties with the occasional wall streeter who pulls down $200k+ that can carry such a mortgage.

4/02/2006 03:13:00 PM  
Blogger Richard said...

went to 3 open houses today in westfield. 2 got multiple bids over asking and the other one got 1 bid at asking. prices were in the $650-$700k range. the market may be slowing, but not yet in some areas.

4/02/2006 04:25:00 PM  
Anonymous Anonymous said...

Looking for some advice..

I am currently renting and trying to keep a pulse on the market. It is obvious things are on the downside. My question is how long do I wait it out? Is it worth waiting another year? I am currently renting with a renewal coming up, and debating to jump into home ownership or rent for another year.

I am looking for a multifamily investment property I would occupy. I figure if I hold on to the property long enough, I shouldn't get burned. Although a lot of the investment property calculations I've done depict excessive over valuation, based on asking and recently sold prices.

On the other hand, long term I anticipate I would rent the entire property out and move into nice, large single family home, once I start a family -- barring any major catastrophe. I've got a good job, I'm young and sitting on a pile of cash.

Appreciate any advice from a seasoned real estate investor!

Thanks from a future Jersey real estate investor.

4/02/2006 04:28:00 PM  
Anonymous Anonymous said...

Held an open house today no one showed ......almost. Last 20 minutes a couple showed up. Made offer .. same offer that was turned down 3 weeks ago. NOw that sellers have recieved same offer twice hopefully they'll realize thats what it is worth. I am comfortable with the fact that they are putting 20% down not doing 100% financing. If the owners takes this offer it is approx 13% off of asking.
KL

4/02/2006 04:44:00 PM  
Anonymous Anonymous said...

Guys -- would anyone know about pricing of townhomes at the Eagle Rock at Roseland (off Eagle Rock Ave), or the Stonegate townhomes development in East Hanover (off River Road)?

Just trying to get an idea of what a 3br/2br in either place costs now and possibly 5-10 years ago... any info would be great!

4/02/2006 05:03:00 PM  
Anonymous Anonymous said...

Guys--

Would any of you know about the pricing of the townhouses at the Eagle Rock at Roseland (off Eagle Rock Ave) or the Stonegate development off of River Road in East Hanover? I'm trying to find out what a 2bd/3bdroom townhome in either development is going for..

Thanks!

4/02/2006 05:04:00 PM  
Anonymous Anonymous said...

Guys--

Would any of you know about the pricing of the townhouses at the Eagle Rock at Roseland (off Eagle Rock Ave) or the Stonegate development off of River Road in East Hanover? I'm trying to find out what a 2bd/3bdroom townhome in either development is going for..

Thanks!

4/02/2006 05:04:00 PM  
Anonymous Anonymous said...

guys, so sorry, i didnt meant to post so many times -- the browser was acting up..

4/02/2006 05:05:00 PM  
Anonymous Anonymous said...

Expect no more than a 10% drop in prices nationwide, per businessweek.

http://www.businessweek.com/magazine/content/06_15/b3979612.htm

4/02/2006 05:15:00 PM  
Blogger Richard said...

last time i checked Eagle Rock at Roseland were going for high $500's.

4/02/2006 05:21:00 PM  
Anonymous Anonymous said...

Question is - are the people bidding on these $600+ small houses moving up or buying in? And if they are moving up, what happens when they try to sell their overpriced condo/townhouse to a newbie?
I'm not sure that this activity means much until we see if these houses really close and what happens to the condo market later this year.

4/02/2006 05:46:00 PM  
Anonymous Unrealtor said...

Thanks for the Open House updates, KL!

We did a few drive-bys where we saw baloons. Still refuse to give foot traffic at current fantasy asking prices.

4/02/2006 05:47:00 PM  
Anonymous UnRealtor said...

"went to 3 open houses today in westfield. 2 got multiple bids over asking and the other one got 1 bid at asking. prices were in the $650-$700k range. the market may be slowing, but not yet in some areas."

You can't draw conclusions based on anecdotal evidence. The regional and town-level sales data is what tells the story.

There will always be a few last Greater Fools, who are oblivious that the market has changed, and buy in at what we know is market peak.

4/02/2006 06:30:00 PM  
Anonymous Anonymous said...

Houses are moving fairly well in Mendham and Morris Plains, as well. Seems like enough Greater Fools for me to think we cn kiss the 30% idea goodbye.

4/02/2006 06:51:00 PM  
Anonymous Anonymous said...

I have to disagree that Mendhem is moving. We were thinking of going to that area and still track it but the prices are coming down. We are looking at other areas now.

4/02/2006 07:41:00 PM  
Anonymous Anonymous said...

"Houses are moving fairly well in Mendham and Morris Plains, as well. Seems like enough Greater Fools for me to think we cn kiss the 30% idea goodbye."

Add Summit to that list of greater fool magnet towns. Today I saw several obscenely overpriced homes with plenty of apparent interest. When will the madness end?

4/02/2006 07:41:00 PM  
Blogger grim said...

First off, I can't remember ever seeing so many open house and for sale signs in North Jersey.

One of the open houses we stopped in had decent traffic. It was a $1.3m Hapgood in Mtn Lakes. Two other open houses (Bernardsville and Chester) were dead. At roughly 5:00pm we were only the second couple to stop into the Chester home.

4/02/2006 07:47:00 PM  
Blogger gravitymatters said...

>>>Why would existing homeowners sell their home to buy a starter house?<<<

a better question.....why would a couple who bought in early/cheap, with ultra low rates (hopefully locked in) want to upsize so quickly in these mess of a market.

carrying costs (perhaps including taxes at lower assessments) are probably very low & affordable.

anyone looking to up size would prefer prices compress (correct) more, while looking for clues the FED may be ready to start dropping rates again.

IMO...not wise to upgrade under those circumstances. bigger mortgage (higher rates), bigger taxes & bigger energy bills.

but hey, looks like some people still think prices only rise.

my 2 cents on open houses today. saw a TON of signs & balloons, but didn't feel compelled to enter any.

4/02/2006 07:50:00 PM  
Blogger grim said...

Sorry I haven't been around to field questions or comments today. Was out taking advantage of this beautiful weekend. Looking at the traffic logs it seems like everyone else was as well.

And no, I'm not looking to buy a 1.3m home in Mountain Lakes in case anyone thought I was either wealthy or planing to IO my life away. Just a fan of Arts & Crafts architecture.. They've been tearing down and destroying the Hapgoods for some time now, so I try to get a good look whenever I can.

jb

4/02/2006 07:50:00 PM  
Anonymous Anonymous said...

$87 Million for a 6.57 acre lot + house in cream ridge? What am i missing

http://www.forsalebyowner.com/show-listing.php?currentlySearching=1&iListingID=20594098

4/02/2006 10:16:00 PM  
Anonymous UnRealtor said...

"$87 Million for a 6.57 acre lot + house in cream ridge? What am i missing"


Could be the 2-hour commute into NY City and Philly makes that farmland prime real estate.

Or, it's a typo for 8.7M? (Which also seems too high)

4/03/2006 07:07:00 AM  
Blogger grim said...

Seems more like they forgot the decimal point. $870,000.00 seems more in line, although still, very high.

I see lots of similar miskeying errors in the GSMLS.. I wonder if someone fixes those before they run local stats on that data..

grim

4/03/2006 07:52:00 AM  
Blogger skep-tic said...

"I see lots of similar miskeying errors in the GSMLS."

it always amazes me when I see typos in real estate ads. these are huge transactions and you can't even proofread? I would fire my realtor immediately if I saw a typo in the ad for my house.

4/03/2006 10:04:00 AM  
Anonymous Anonymous said...

KL,

appreciate the open house coments.
The 13% off price. Is this lower than last summer prices in neighborhood? Meaning are prices down now.

4/03/2006 10:45:00 AM  
Blogger bubble disciple said...

anecdote about the NYC real estate market:

my friend is in a Co-op in the 10022 zip code. The board recently mailed fliers to the residents easing the open-house policies, apparently because traffic has slowed down significantly.

so what's happening in NNJ is also happening in NYC.

4/03/2006 12:53:00 PM  
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