Tuesday, May 09, 2006

Are You Sure Spring Is Here?

From the NY Times:

A Chill Is in the Air for Sellers

"Many Americans who planned on real estate as their path to wealth are beginning to find that there are limits to how high is up."

"Blame market forces. As higher interest rates dampen demand in cities and suburbs that only a year ago were battlegrounds for fierce bidding wars among numerous buyers, sellers are grudgingly lowering their prices to drum up interest."

"It is a slow leak, to be sure. The most widely used statistic to measure home values, the median home price, shows that once-hot markets like San Mateo, Calif., and Mercer County, N.J., are now registering year-over-year declines. In general, prices are still climbing, but they are doing so far more slowly in cities like Las Vegas and San Diego, which had been lucrative markets for speculators."

"Prices in most of California and the Boston-to-New York corridor could also fall, said Mark Milner, the company's chief risk officer. Its statistics, which lag the current market by about two months, show homes continuing to appreciate, but at a slower rate."

"After open houses for their four-bedroom, two-story ranch house in Lawrenceville, N.J., brought in no offers, Mary Ellen and Anthony Pierrard are telling potential buyers they are willing to negotiate their $420,000 asking price and are even considering enlisting a real estate agent to help them market their home. That's a far cry from the couple's experience selling two houses on their own in Rockland County, N.Y., a few years ago."

"Robin L. McCarthy, a real estate agent who works in nearby Princeton, N.J., said homes were sitting on the market three to four months, when houses sold in as little as a few days a year ago. Houses that would have been the subject of intense bidding wars now sell for slightly less than asking price."

""Buyers are afraid that real estate prices are going to go down, so they are very careful," Ms. McCarthy said. "They don't want to pay too much.""

27 Comments:

Anonymous Anonymous said...

Ba ba ba ba ba ba BOYCOTT HOUSES!

Prices are way way way to high vs incomes.

Boooooooyaaaaaaaa

Bob

5/09/2006 07:35:00 AM  
Anonymous Anonymous said...

GSML House listings

Inventory going up everyday everyday.

5/4/2006 28,209

5/8/2006 28,471

5/9/2006 28,587

WAIT!

Inventories will be over 40,000 by the fall. And they say there is a shortage of housing. Only thing there is a shortage of is Rationally priced housing. Gluts of insulting priced houses.
The tide is turning. Panic will be setting in.

Ba ba ba ba ba BOYCOTT HOUSES!

Booooyaaaaaaa

Bob

5/09/2006 07:39:00 AM  
Anonymous Anonymous said...

Check this out.

http://www.files.bz/files/11251/RealEstateValuationMethods.xls

Plug in rational numbers so not to overpay and be a bagholding fool.
Booooyaaaaaaaa

Bob

5/09/2006 07:57:00 AM  
Anonymous Anonymous said...

Bob that link does not work

5/09/2006 07:59:00 AM  
Anonymous Anonymous said...

Sorry.

Go to Ben's "The Housing Bubble"

Go to article "Show No pity"

Comment by Gekko
at 14:28;23

Great spreadsheet for home buyers.

BabababababaBOYCOTT Houses!

It's all business Nothjing Personal!

Booooooyaaaaaaaa

Bob

5/09/2006 08:14:00 AM  
Anonymous Anonymous said...

Grim:

Could you please help to check how long this has been on the market? any price reductions?

It seems a vacant property now.I know it is very close to a busy street, probably it is why it is not sold.

Thanks,

MLS: 2236980

5/09/2006 08:54:00 AM  
Anonymous Anonymous said...

The link worked fine, it's just long and scrolls out of view.

Triple-click to select the whole line, then choose "copy."

5/09/2006 10:42:00 AM  
Anonymous Anonymous said...

"The nature of the [NY Times] writing appeared tortured to me..."


That's SOP at the NY Times -- some of the hoops they jump through to dance around reality are quite amusing.

5/09/2006 10:47:00 AM  
Anonymous Anonymous said...

Anon, MLS 2236980 was originally put on the market @ $839,000 Jan 20, 2006.

It's now at $789,900, and will probably be at $650,000 in six months.

Note: it may have been listed under a different MLS for a higher price.

5/09/2006 10:52:00 AM  
Anonymous Anonymous said...

Grim,

Can you find out any information on this MLS: 2601726. I'd like to know how long it's been on the market and if there have been any price reductions as well.

Thanks!

5/09/2006 12:02:00 PM  
Blogger grim said...

That home was purchased for $415,000 in 1987, during the last bubble.

The inflation adjusted price of that home is somewhere around $700,000 (if you trust the government supplied numbers).

Good example of why not to buy at the top. In 20 years they've seen very little real appreciation. However, we'll need to see the sale price to pass final judgement.

5/09/2006 12:05:00 PM  
Blogger grim said...

Or, looking at it another way, it took a second asset bubble for this seller to be able to recoup their initial investment.

grim

5/09/2006 12:09:00 PM  
Blogger Metroplexual said...

One of the writers is a blogger on NYT blog "the walk through". For a while he was going to the bubble blogs to get ideas for his blog. I don't even bother visiting it anymore. Damon Darlin just baits people with the notion there is no bubble to get comments otherwise there is little dialog over there.

5/09/2006 12:21:00 PM  
Anonymous Anonymous said...

"Re 2236980, I don't know, that house doesn't too overpriced given the size age and the township"

How much do you think it was worth in 2001?


"I dont' see it falling to 650K in 6 months."

12 months?

5/09/2006 01:06:00 PM  
Blogger grim said...

I think I may have deleted someones post by accident while cleaning up spam. Sorry if I did.

grim

5/09/2006 01:45:00 PM  
Blogger grim said...

gg,

You overestimated the percentage, it's more likely around 3%.

jb

5/09/2006 01:46:00 PM  
Anonymous Anonymous said...

One of the Real Estate agents quoted to us yesterday for Edison-Middlesex.

"The inventory is moving fast with the close of the current school year, the properties can be available today and under Attorney Review or Contract tomorrow".

Do you belive this?


KBR

5/09/2006 01:50:00 PM  
Anonymous Anonymous said...

"I don't see it going to 650 K in 12 months either unless there is something majorly wrong with the house or its surroundings that is not obvious in the listing."


Isn't that another version of the "Houses in Summit Never Go Down in Value" thesis?

:)


This house will go down in value, because the market has changed, not because of its location.

5/09/2006 02:54:00 PM  
Anonymous Anonymous said...

"A realtor said: The inventory is moving fast with the close of the current school year, the properties can be available today and under Attorney Review or Contract tomorrow"


A few months ago I went to an open house, and said offhand "The market seems to be changing," to which the realtor replied, "This house is already in attorney review, this open house is just for backup offers."

The house indeed went into attorney review, and three days later, was back on the market.

Buyer got cold feet/came to their senses, apparently.

Guess that realtor wasn't so smug after that.

5/09/2006 02:58:00 PM  
Anonymous Anonymous said...

Grim:
re: MLS: 2236980 I have to respectfully disagree with you. Due to the facts that you pointed out, I would have to say that this house will not sell for a penny over $650,000. In addition, I agree with Unrealtor in that it will take only 6 months.

Check out MLS:2264717. This home, also located on Mt. Airy has been on the market for months. It has also experienced several reductions, and the owners still can't seem to sell it. Now, this house is extremely young for Basking Ridge/Bernards Township, it doesn't have oil heat, has 5 bedrooms, and is on a bit more land than the other home. I don't think this house will sell for a penny over $700,000. Honestly, I think they would be lucky to get $700,000. For that reason, I think it is impossible for the other house to sell for any more than $650,000.

Again, this is all my opinion, but I have been hunting in Basking Ridge/Bernards Twshp for a long time now...actually too long.

If anyone wants either of these houses...I would say low ball, so you can be part of Grims list in a few weeks. Both houses are vacant, and have been for an extremely long time. Don't know how long the bridge loans will go...TAKE YOUR CHANCES IF YOU ARE INTERESTED. Good Luck!!!!

-CJ

5/09/2006 03:47:00 PM  
Anonymous Anonymous said...

True, there are several houses in the 600-700 range. However, they all have issues. Several are located on wet lands. Not sure if you are familiar with wet land issues, but definitely not anything you would want to go near. Others are located on streets that look like they belong in Arkansas. And finally, the best of them all had to be a house that was missing load bearing walls in the basement, and instead had 2x4's on bricks holding the ceiling up.

If all of these things aren't a problem...then you can definitely get a house in that range.

Whats your opinion on Mendham??? I went there recently and fell in love. How much do you think the prices will drop there????

-CJ

5/09/2006 04:26:00 PM  
Anonymous Anonymous said...

I received the below email a person who lives in New Milford):

Is it possible that the original prices on the list of houses were primarily high speculation prices?
I don't disagree that the drop in prices are and reflecting higher mortgage interest rates.
The statistics on employment recently sent the stock market up.
Comparative price drops on homes in the 350's and lower 400's from what I see locally in the Bergen Record
have not taken the substantial price reduction.
Cash is not king just yet!

Immunity in Bergen county. I doubt it.

Prices have escalated there as much as anywhere else, maybe even more so. I really would like to see original price, the current prices, and what a property finally closes at for communities in Bergen County.

Can you get access to comp's like that?

I doubt there is any difference between Bergen County and the rest on NJ.

5/09/2006 05:44:00 PM  
Anonymous Anonymous said...

Grim Ghost - did you consider the train from Madison/Convent?

My preference would be Montville/Whippany since it's just a 45 min ride downtown and the stop is < 10 min depending on loc.

5/09/2006 05:57:00 PM  
Anonymous Anonymous said...

randolph

any one have thoughts on randolph...it is a bit of a commute to nyc but the school systems seem very good and the prices 'relatively' reasonable relative to other towns...unfortunately we are moving from out of state and have young kids so would like to buy sooner than later

5/09/2006 06:55:00 PM  
Anonymous Anonymous said...

Hello Boycott Bob:

Please direct me to the article below:

Go to Ben's "The Housing Bubble"

Go to article "Show No pity"

Comment by Gekko
at 14:28;23

Great spreadsheet for home buyers

thank you
ArrElle

5/09/2006 09:06:00 PM  
Anonymous Anonymous said...

Here's the home buying spreadsheet mentioned earlier. (Simply triple-click long URLs to copy them.)

Here's a shorter URL to the spreadsheet for those who can't seem to triple-click?

http://tinyurl.com/ggfzp

5/09/2006 09:39:00 PM  
Anonymous Anonymous said...

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Take a look at Wallstreetwinnersonline.com

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5/18/2006 04:10:00 PM  

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