Buyers Market? No. Sellers Market? No.
From the Palm Beach Post:
It's a renter's market
By Barbara Marshall
"This spring, Michelle Lewis and Rudolph Maragh of West Palm Beach were preparing to buy a condo when they took one last look at the local housing market."
"And decided to rent."
"The couple and their two kids leased a 2,000-square-foot, three-bedroom house in the gated West Palm Beach development of Briar Bay for $1,500 per month — about 40 percent less than the monthly mortgage payments on a comparable home."
""It was the same price as an apartment, so we might as well get the house," Lewis, a registered nurse at Columbia Hospital, said of their decision."
"Welcome to the flip side of the housing boom, where renters can afford brand-new dream homes while landlords struggle to meet their monthly mortgage payments."
"Deals like these changed Twanya Robinson's mind about buying a home."
""I'm approved for a mortgage of $300,000, but I didn't think I was getting enough house for the money" at that price, said Robinson, a controller with a downtown West Palm Beach software company and a mother of three."
"Instead of buying, she rented a new 2,100-square-foot house for $1,650 per month. With four bedrooms, the house in the gated Lakes of Laguna development of West Palm Beach is big enough for her children to have their own rooms. Purchasing the house would have cost $350,000 — or about $2,300 a month after plunking down a $70,000 down payment — more than Robinson can afford."
"Discussion of the strong rental market makes some real-estate agents uneasy. Several refused to comment publicly, fearing it would further erode sales in an already slow market."
"Terrence McManus, president of Florida RentFinders, said now that the interest-only periods have ended on many investors' mortgages, "they're trying to get income out of their houses any way they can.""
"McManus said that most of the landlords he works with are renting at a loss."
""None of them is cash-flow positive," he said."
"The situation is creating sleepless nights for investors, such as Dena Webster of Wellington, who hasn't been able to sell any of the 14 houses that she purchased at the peak of the boom. Eleven are in Olympia, a Wellington development where houses routinely carry price tags of more than a million dollars, but where rents are in the $1,800 to $3,000 range."
""I'm upside-down on every one of them," Webster said of her properties."
""I'm not sleeping," she sighed."
"Renters such as Michelle Lewis and Twanya Robinson, on the other hand, are slumbering soundly."
It's a renter's market
By Barbara Marshall
"This spring, Michelle Lewis and Rudolph Maragh of West Palm Beach were preparing to buy a condo when they took one last look at the local housing market."
"And decided to rent."
"The couple and their two kids leased a 2,000-square-foot, three-bedroom house in the gated West Palm Beach development of Briar Bay for $1,500 per month — about 40 percent less than the monthly mortgage payments on a comparable home."
""It was the same price as an apartment, so we might as well get the house," Lewis, a registered nurse at Columbia Hospital, said of their decision."
"Welcome to the flip side of the housing boom, where renters can afford brand-new dream homes while landlords struggle to meet their monthly mortgage payments."
"Deals like these changed Twanya Robinson's mind about buying a home."
""I'm approved for a mortgage of $300,000, but I didn't think I was getting enough house for the money" at that price, said Robinson, a controller with a downtown West Palm Beach software company and a mother of three."
"Instead of buying, she rented a new 2,100-square-foot house for $1,650 per month. With four bedrooms, the house in the gated Lakes of Laguna development of West Palm Beach is big enough for her children to have their own rooms. Purchasing the house would have cost $350,000 — or about $2,300 a month after plunking down a $70,000 down payment — more than Robinson can afford."
"Discussion of the strong rental market makes some real-estate agents uneasy. Several refused to comment publicly, fearing it would further erode sales in an already slow market."
"Terrence McManus, president of Florida RentFinders, said now that the interest-only periods have ended on many investors' mortgages, "they're trying to get income out of their houses any way they can.""
"McManus said that most of the landlords he works with are renting at a loss."
""None of them is cash-flow positive," he said."
"The situation is creating sleepless nights for investors, such as Dena Webster of Wellington, who hasn't been able to sell any of the 14 houses that she purchased at the peak of the boom. Eleven are in Olympia, a Wellington development where houses routinely carry price tags of more than a million dollars, but where rents are in the $1,800 to $3,000 range."
""I'm upside-down on every one of them," Webster said of her properties."
""I'm not sleeping," she sighed."
"Renters such as Michelle Lewis and Twanya Robinson, on the other hand, are slumbering soundly."
25 Comments:
If anyone has access to Barrons online, I'd appreciate if you could email me the text of the three housing articles published this week:
Flippers - Start Swimming
The Big Glut
Trouble In Paradise
Thanks!
Must listen to this folks... although he forgot to mention the effects of ARMs resetting this year causing mortgage payments higher !!!
Christopher Thornburg, senior economist at UCLA speak re: California Economy, Housing Bubble
The situation is creating sleepless nights for investors, such as Dena Webster of Wellington, who hasn't been able to sell any of the 14 houses that she purchased at the peak of the boom. Eleven are in Olympia, a Wellington development where houses routinely carry price tags of more than a million dollars, but where rents are in the $1,800 to $3,000 range."
""I'm upside-down on every one of them," Webster said of her properties."
""I'm not sleeping," she sighed."
WANT TO BE ONE OF THESE BAGHOLDING UNDERWATER MORTGAGE HOLDERS?
Go Ahead DO IT!
Lose Sleep!
Boycott BIDDING
Say NOAAS to RIPOFF PRICES AND MONTHLY MTG SLAVERY!
Boooooooyaaaaaaaa
Bob
Still Renting & sleeping well!
Hope everyone had a good weekend and remembered that this is Memorial Day.
Andy
"Second Home Glut"
"With vacation homes flooding the market, sellers are cutting asking prices by up to 40%"
"Flippers Start Swimming"
"If you want to sell you've got to go back to '04 prices"
How about '00 prices in the near future?
WORRY! WORRY! WORRY!
Boycott ripoff home prices.
No Bids No Maas No noting. Let'em sit and think and lose sleep.
Buying a house does no entitle one to a profit!
Boooooooooyaaaaaaa
Bob
Overvaluation Ocean City NJ 50%!!!
Most of NNJ is 40% overvalued imo!
DO NOT BID DO NOT BID>
NOTHING! The Misery Index is climbing. Starve!
Starve realtors starve. Start working for buyers for buyers. Demand huge price concessions. Then just maybe a few buyers "may" emerge.
The Floor is about to fall out for home prices any day now any day now.
Booooooooyaaaaaaaa
Bob
DO NOT BID ON ANY HOUSES.
NO BIDS NO MAAS!
REAL PRICE REDUCTIONS NOT SOME PONZI SCHEMING MANIPULATORS TRYING TO RIP YOU OFF.
NO MAAS TO MONTHLY MTG SLAVERY.
NO MAAS!
BOYCOTT HOUSES AND BIDDING. NO BIDDING. NONE. ZERO!
BEG REALTORS BEG!
BOOOOOOOOYAAAAAAAA
Bob
This situation in the Palm Beach area is a reality everywhere else too. A property you buy is only worth as much as someone else is willing to pay. She bought 14 times at the top of this cycle and now no one else wants to become the greater fool.
3-toed Pete
We are going to be moving to North Jersey early next year. How much would be a reasonable rent to pay for a 3BR townhouse or single family house in the morristown area? thanks.
Amen bairen!
"Flippers - Start Swimming"
Great title!
3-toed Pete,
I certainly feel bad for her and I hope she pulls through.
However, she seems to have some staying power. She is not only a realtor but also the owner of a mortgage company.
http://www.denawebster.net/
http://tinyurl.com/r68dw
Also, she was certainly swinging for the fences. This might be one of the 14 listings she has. I am not sure how recent this listing is, but this is a place that was bought for about $600K in 2005. The price was reduced to only $1.3M on 04/30/06.
http://tinyurl.com/oazx2
CNS
I don't feel sorry for any broker/realtor who owns 14 overpriced houses. Bet she is trying to foist them on to her unlucky clients. Also bet she faked some docs.
CNS:
She admitted she's upside down on all her properties. What do you think that means? That she has the kitchen on the top floor?
3-toed Pete
to anonymous 8:46:
Morristown rents are astronomical. I have lived all over Jersey, and am amazed at what they are asking in Morristown. As much as Hoboken, in my opinion.
They seem to price 2BR apartments around $1600-$1800 (which is $200-$300 higher than anywhere else in the area). A townhouse or house would be truly priced at a premium.
Sorry I don't have any helpful info.
Rents won't go down in Hudson County. You have outward migration from Manhattan, people who are saving on the NYC income tax.
I make $72,000 a year as a single person which is poverty for someone at the age of 28 in NYC.
Rents in the WORST part of Jersey City where I would not feel comfortable walking anytime after dark were close to $2,000 a month PLUS utilities are not included (add another $200 a month, plus parking).
Sure, everyone believes that everyone in the NYC metro area (NNJ, the 5 boros, Long Island, Westchester & Rockland NY) is a white collar professional making between $150,000 - $300,000 per person.
If you are making in the five figures or under $100,000 a year the only place that you could afford for less than $1,500 a month is Newark.
I am the same 'anonymous' as above. These articles are laughable and do not pertain to 2006 and in every region of the country.
In the NYC metro area (again NNJ, all the 5 boros, Long Island, Westchester & Rockland) rents are spiraling higher and higher. The gap between rents & equivalent total PITI is closing fast.
Vacancy rates citywide & region wide in NJ & NY State have never been lower.
Can you find any apartment of any size, shape in any location for less than $1,000 in Northern New Jersey except in the worst most horrible neighborhoods, even $1,500 is a stretch. You need to budget at least $2,000 a month for any location within 50 miles of NYC. Don't believe me look at the ads.
And I don't know where everyone is coming up with 20% downpayments for condos, 6 months of rent upfront which is demanded by landlords @ $2,250 a month, neighborhoods where median income is $60,000 a year where apartments rent for $2,000 a month and up.
They should expand the Earned Income Tax Credit for single people to $100,000 a year and greatly expand the mortgage income tax deduction as well as fully tying in marginal tax rates to the confiscatory cost of living.
{{{They seem to price 2BR apartments around $1600-$1800 (which is $200-$300 higher than anywhere else in the area). A townhouse or house would be truly priced at a premium.}}}
Still cheaper than Hoboken or Jersey City where you are looking at paying double (plus another $200 - $400 depending on season for utilities).
Astronomical is a relative term. In the absence of rent control, rents are controlled fully by market forces.
And who lives in places like Morristown or Morris county?? Not some high school educated low wage service worker making $75,000 a year, but a college educated professional making $200,000 - $400,000 per person. Seems like a bargain to me...
I am not talking nonsense. There is a general perception in the NYC & NJ media that everyone is making $100,000 + per person and the only issue is the trendyness factor as well as bars, restaurants, & other nonsense (see the NY Times)..
Like I said before & I won't lie, I only make $72,000 a year which for a single person is near poverty anywhere in the region. I couldn't buy anything unless I looked in Camden or Syracuse NY.
People talk about these great deals but as a native NY'er, I see nothing near what they are saying. I checked out what $1,500 a month gets in Jersey City near Journal Square or JC heights. Maybe a small studio at best with another few hundred for utilities.
Oh, and then there are the realtor fees which are a bargain compared to 15% & 25% of annual rent for the city.
Maybe that is why rents have sprialed higher & higher in Jersey City (but it sure beats paying $700 in HOA fees to be on the waterfront). Hoboken is different, there you have the post college mentality and mommy & daddy still paying their kids rent.
Again, the main point was that the NYC/NNJ/LI rental market is unlike that of the rest of the country where rents have remained stagnant while home prices have soared. In the NYC metro area, both have (and continue) to spiral higher & higher.
Checking craigslist, the only thing in the $1,100 range is a one bedroom in the 'ironbound' section of Newark.
You are looking in THE most expensive towns in NJ!! Hoboken, Edgewater, Jersey City.
Look in Cliffside Park, Fort Lee, or Palisades Park. You'll find plenty of low priced rentals. Now quit crying.
Yeah OK, you sound like the people who say to look in Washington Heights, Inwood, or Riverdale.. They are just as expensive.
Oh, I saw a nice broom closet also known as a studio in Fort Lee for the bargain price of $1,400 a month with 'only' one month brokers fee. If you were to buy the unit, total PITI would probably be only around $400 more AND you get the tax deduction.
My point was orginally that rents are not dropping or remaining stable in the greater NYC area and the gap between total PITI and rent is closing fast.
I don't know.. I see at least 3 apt on craigslist that are 1br in Hamilton Park JC.. Pretty nice area for $1300-$1500 a couple of 2 bedrooms too..
Anon looking for apt. within 50 miles of NYC. Here's one maybe 55 miles. Train station nearby and short line bus from Port Authority.
MONROE NY Large 1 BR attached to private home.Heat, Hot Water & elec. in-cluded. Skylights, spiralstaircase. No smoking, orpets. $975 / month + security. Call 845-986-4587
Source: The Journal News 5/30
I am 8:46am anonymous. Thanks to all who made suggestions of places outside of the morristown area. Will definitely look around before signing anything. It is nice to have so much support when you are the minority who have not bought into the "buy..buy...buy" philosophy!!Will update you once we find a place. Thanks again.
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