Wednesday, May 10, 2006

Taking Longer To Sell In New Jersey

From the Record/Herald:

It's taking longer to sell a house
by Prashant Gopal

"Last spring, Michael Segal put his Teaneck home on the market for $600,000 -- an asking price selected with the help of his Realtor."

"Buyers showed interest, but Segal said he decided it wasn't time to sell. This spring, the four-bedroom colonial is up for sale again. The asking price: $529,000 ($19,000 above his current's agent's recommendation)."

"What changed? North Jersey's real estate boom, it appears, has gone flat."

"Springtime is here, and "open house" and "for sale" signs are everywhere. But unlike the past few springs, real estate agents are having to work harder to sell homes and convince sellers to be more realistic about asking prices."

""Sellers and the buyers are at a standoff," said James Collins, an agent with Coldwell Banker in the Alpine/Closter office. "The sellers think their home is worth more than what fair market value is. The purchasers are thinking there's a big real estate bubble that's going to burst. So they're ... wanting to wait and see.""

"Jeffrey Otteau, who owns the Otteau Appraisal Group in East Brunswick, recently released data showing that the average number of listings in New Jersey from January through March jumped by 65 percent, compared with the same period last year. Meanwhile, sales in that period were down 12 percent."

"In Bergen County, there was a five-month inventory of homes as of March 31, meaning it would take that long to sell all the homes on the market at the current pace, Otteau's report said. By comparison, there was a three-month inventory at the same time last year. Inventory is also building up in Morris, Passaic, and Hudson counties."

"But some experts say it's unlikely the housing market will soon return to the boom levels of prior years, especially with slow job growth in North Jersey, and high energy prices cutting into buyers' budgets."

"The boom is "over, and we're into a cycle that's going to last three years with high levels of inventory and a slow pace of sales,'' said Otteau."

49 Comments:

Blogger minutesfromNYC said...

Sellers and Realtors are finally coming to the conclusion that not many people rake in more than 200k a year

5/10/2006 07:26:00 AM  
Anonymous Anonymous said...

GSML Listings
Everyday it is relentless Housing Inventories Piling Up

5/10/2006 28,660 houses for sale

5/9/2006 28,587 houses for sale

5/8/2006 28,471 houses for sale

4/12/2006 26,582 Houses for sale

3/06/2006 24,111 Houses for sale

Relentless.
And this does not include FSBO. WOW!

BOYCOTT HOUSES!!!

Booooyaaaaaaaaa!

Bob

5/10/2006 07:27:00 AM  
Blogger minutesfromNYC said...

Sellers think that people in their late 20's, early 30's are looking to buy a 500k house with a big sack of money

Yes, your 2 bedroom cape cod is definately worth 500k

5/10/2006 07:34:00 AM  
Anonymous Anonymous said...

Sellers do not give a damn where and how the buyer gets the money. they get their money and the buyer signs up for debt slavery.
Seller laughing all the way into retirment by sucking in a gullible fool listening to all the hype.

5/10/2006 07:54:00 AM  
Anonymous Anonymous said...

Grim - did you post April data already? Did I miss it?

5/10/2006 08:15:00 AM  
Blogger grim said...

April data has not been posted yet. Also waiting on the 2006 Q1 Stats from the NJ Association of Realtors.

grim

5/10/2006 08:19:00 AM  
Anonymous Anonymous said...

This is the most important info in that article, at least about bergen county...

More recent data from the New Jersey Multiple Listing Service show the trend is accelerating. On April 30, there were 6,268 home listings for Bergen County homes, 52 percent more than on April 30 of last year. But 26 percent fewer Bergen County homes sold last month than in April of 2005, according to the data.

5/10/2006 08:19:00 AM  
Blogger Shailesh Gala said...

"The boom is "over, and we're into a cycle that's going to last three years with high levels of inventory and a slow pace of sales,'' said Otteau."

Just the bad part is one will have wait 3 years for things to become affordable again. Which I am still little skeptical with raising interest rates, the affordability will increase much.

Keeping monthly mortgage same, Every 1% increase in rates reduces the loan amount one can take by about 10%. So, if prices drop 10%, but also the rates increase 1%, it still costs same on monthly basis. Already the rates have gone from bottom 5% to 6.5%, that itself should have caused prices to come down 15%.

5/10/2006 08:25:00 AM  
Blogger pesche22 said...

perhaps it would help to place the for sale signs in spanish.

and bank of america can finance the loan with just a tin number.

5/10/2006 08:32:00 AM  
Blogger grim said...

Otteau's tune has changed dramatically in the past few months.

The optimism is quickly fading.

I have a feeling the 3 year figure was based on the trends seen during the last bubble. The steepest declines were seen in the 3 years that followed the crash, 1989, 1990, and 1991.

grim

5/10/2006 08:44:00 AM  
Anonymous Anonymous said...

Just my opinion... this is just more evidence that continues to dispel that myth of wall street bonus money.

5/10/2006 08:59:00 AM  
Anonymous Anonymous said...

I think I might of seen a similar question posted here but I was wondering if anyone that has been following specific properties noticed reductions coming in lower than 2005 peaks on the similar properties.

bobby

5/10/2006 09:04:00 AM  
Blogger minutesfromNYC said...

Just my opinion... this is just more evidence that continues to dispel that myth of wall street bonus money.

Most people are earning between 50-80k a year.

5/10/2006 09:12:00 AM  
Anonymous Anonymous said...

50 Year mortgages hit the market:

http://money.cnn.com/2006/05/10/news/economy/economy_mortgage/index.htm?cnn=yes

5/10/2006 09:21:00 AM  
Blogger grim said...

50 year mortgages?

Reminiscent of the top of the Japanese RE bubble..

Lenders were pushing 100 year mortgages.

Take It From Japan: Bubbles Hurt - New York Times

Economists and real estate experts see other parallels as well. In the 1980's, the expectation of rising real estate prices made many Japanese homebuyers feel comfortable about taking on huge debt. And they did so by using exotic loans that required little money upfront and that promised low monthly payments, at least for a short time.

A similar pattern is found today in the United States, where the methods include interest-only mortgages, which allow homebuyers to repay no principal for a few years. Japan had its own versions of these loans, including the so-called three-generation loan, a 90- or even 100-year mortgage that permitted buyers to spread payments out over their lifetimes and those of their children and grandchildren.

5/10/2006 09:33:00 AM  
Anonymous Anonymous said...

Grim....."Also waiting on the 2006 Q1 Stats from the NJ Association of Realtors"... How honest do you think that will be? Are they even capable of telling the truth? Looking forward to that report!

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

BOYCOTT GAS!

Insultingly Overpriced.

Boooooooyaaaaaaaa

Bob

5/10/2006 10:17:00 AM  
Anonymous Anonymous said...

BOYCOTT RIPOFF HOUSE PRICES!

Starving realtors + desperate sellers = Plunging prices

Booooooyaaaaaaaa

Bob

(the Real Deal)

5/10/2006 10:32:00 AM  
Blogger minutesfromNYC said...

Bob, why don't you just register a name with the blog so that we can know who is you and who is fake?

5/10/2006 10:35:00 AM  
Blogger minutesfromNYC said...

Check out this load of garbage:

http://www.anateisenberg.com/files/400519/bergen-county-news-May2006-1.html

According to a study conducted by CNBC, with over 13,000 residents, the Bergen County town of Tenafly is still not getting the housing rates it so deserves. Many houses that have been on the real estate market have been around for some time. This is seen to occur, because while buyers are waiting for the prices of homes in Tenafly to come down, property owners are waiting for prices to go up. However one must consider that home prices in Tenafly reflect much more than just paying for the house. While buying a home in Tenafly, it is wise to remember that one is also paying for the blue ribbon schools in Tenafly and the houses of worship that are at walkable distances. Also, Tenafly is much closer to the city of New York, which is just ten miles away. Click here for more information on the Bergen County town of Tenafly.


give me a break

5/10/2006 10:44:00 AM  
Blogger grim said...

It's always different "here".

grim

5/10/2006 10:53:00 AM  
Anonymous Anonymous said...

Bob, why don't you just register a name with the blog so that we can know who is you and who is fake?
That's funny...like we care who's really saying "booyaa".
that's so 90's anyway.

5/10/2006 10:57:00 AM  
Anonymous Anonymous said...

Bob

(the Real Deal)


LOL!!

newsflash to "Bob" - we don't care

5/10/2006 11:47:00 AM  
Blogger transmissionfluid said...

On one block in Bernardsville, there were 7 houses for sale. There were probably 15 houses on the block as a whole. It was kind of eerie.

5/10/2006 12:01:00 PM  
Anonymous Anonymous said...

The latest promotional postcard I got from the local W agent changed content and format from previous mailings.

They used to just say how many high-priced homes in my neighborhood they'd sold. And of course the front would be a picture of a prize local house.

Now it's all about how they can enpower me to achieve my goal of home ownership! *Barf!*

oh, and no prize home picture this time - the post card front is a SALAD RECIPE! Hilarious

PbW

5/10/2006 12:03:00 PM  
Blogger RentinginNJ said...

Otteau's tune has changed dramatically in the past few months.

The Otteau’s reports are always interesting. I get the feeling that they are trying to be intellectually honest while at the same time not alienating their biggest clients. They make some pretty frank observations about the housing market, but they always fall short of predicting an actual fall in prices. For example, they are one of the few groups tied to the RE industry who will actually acknowledge that growing inventory is bad for prices, rather than a once-in-a-lifetime opportunity for buyers to have a bigger selection of overpriced homes to chose from. Unlike the rest of their RE industry brethren, they point to rising interest rates as actually supporting Spring market, as rising rates have instilled a sense of urgency in some buyers. They also say that buyers will have a “much more say in determining the selling price”. Of course, they still fall short of predicting declining prices; the RE industry equivalent of publicly pointing out that the emperor has no clothes.

5/10/2006 12:22:00 PM  
Anonymous Anonymous said...

BOYCOTT BLOATED HOUSES!!!!

Keep the BOYCOTT GOING INTO SUMMER THEN FALL THEN WATCH THE

PAPAPAPAPAPA PANIC!!!!!!!

LEAN TIMES COMING YOUR WAY BUBBLEHEADS.

BOOOOYAAAAAAA

Bob

5/10/2006 12:26:00 PM  
Anonymous bubbled-out said...

Here is a very interesting debate that was on the radio yesterday (NPR's "To the Point") between the economist who wrote the recent Harper's "Housing Serfs" piece and David Lereah of the NAR. Lereah sounds like a cheerleader, what an a**hole.

The following link will stream the Real Audio file from NPR:

http://tinyurl.com/zyd4m


For at least a year, some economists have predicted the bursting of what they call the housing "bubble." The real estate industry has insisted that won't happen, and the superheated housing market did protect the economy when the stock market faltered, but have good things finally come to an end? Fortune magazine says the boom is over, and foreclosure rates are beginning to rise. In Harper's, an economist observes, "Never before have so many Americans gone so deeply into debt so willingly," and that the "investments" they believe will lead to wealth and freedom may be a kind of slavery. If prices drop, what's the fate of homeowners with interest-only loans? What are the consequences for the economy as a whole? We hear from economists, realtors and investment experts.

5/10/2006 12:40:00 PM  
Anonymous Anonymous said...

"...the post card front is a SALAD RECIPE! Hilarious" I got an email like that from a realtor. She has a voice email on how to make some chicken recipe along with her listing! What is going on - is there going to be a glut of short order cooks next?

5/10/2006 12:48:00 PM  
Anonymous Anonymous said...

chicken and salad recipes?? the only things cooking now are their gooses

5/10/2006 12:58:00 PM  
Anonymous Anonymous said...

BOYCOTT GAS TOO!!!!

Keep the BOYCOTT GOING INTO SUMMER THEN FALL THEN WATCH THE

PAPAPAPAPAPA PANIC!!!!!!!

LEAN TIMES COMING YOUR WAY BUBBLEHEADS.

BOOOOYAAAAAAA

Bob

5/10/2006 01:30:00 PM  
Blogger minutesfromNYC said...

Ridiculous to compare a house boycott with a gas boycott. No one HAS to purchase an over priced house. Gas is a necessity…unless you commute via public transportation that is.

5/10/2006 01:40:00 PM  
Anonymous Anonymous said...

"Ridiculous to compare a house boycott with a gas boycott. No one HAS to purchase an over priced house. Gas is a necessity…unless you commute via public transportation that is."

That's just some tool impersonating Bob.

5/10/2006 01:56:00 PM  
Anonymous Anonymous said...

$3 per gallon is high, but it's still not that bad with inflation adjusted...

Just like the real estate market, everything is due for an adjustment... can't keep expecting to pay $2 at the pump year after year...

5/10/2006 02:06:00 PM  
Anonymous Anonymous said...

Grim,
Do you think it will take 3 years before housing becomes affordable again?

5/10/2006 02:09:00 PM  
Anonymous Anonymous said...

it all depends on your definition of affortable...

some people believe current price is affortable..

it's all relative...

5/10/2006 02:19:00 PM  
Blogger REINVESTOR101 said...

BOYCOTT GAS TOO!!!!

Keep the BOYCOTT GOING INTO SUMMER THEN FALL THEN WATCH THE

PAPAPAPAPAPA PANIC!!!!!!!

LEAN TIMES COMING YOUR WAY BUBBLEHEADS.

BOOOOYAAAAAAA

Bob


I've had it with you. Now there's two of you doing the same thing. Funny, between the two of you, the extent of your vocabulary is about 25 words with every phrase ending in some nonsense.

No one should have to continue to read this spam. Why don't you do us a favor and cease with posting?

5/10/2006 02:25:00 PM  
Blogger minutesfromNYC said...

it all depends on your definition of affortable...

some people believe current price is affortable..

it's all relative...


Yes, people who take out ARMs :)

5/10/2006 02:27:00 PM  
Blogger chicagofinance said...

Most ARMs are close to 6%, if not more, at this stage.

You need I/O's now.

5/10/2006 02:41:00 PM  
Blogger RentinginNJ said...

Do you think it will take 3 years before housing becomes affordable again?

If by "affordable" you mean return to historic valuations in line with rents, wages and the rest of the economy, my guess would be no.

I think houses will cost less in 3 years than they do today, but that it will be a slow and painful process. Sellers will fight tooth and nail on the way down. I'm guessing 7-8 years coming from a combination of falling prices and inflation playing catch-up.

Again, just my guess. No one really knows for sure.

5/10/2006 03:38:00 PM  
Anonymous Anonymous said...

I hope it doesn't take that long (7-8 years) for prices to drop. If housing prices just dropped 10% this year, that would be encouraging. Compared to the last RE bubble, it seemed prices fell a bit sooner. There are still sellers who are listing their homes 100ks overpriced and thinking that the 10 year old jacuzzi tub in the master bath is the sale clincher!

5/10/2006 03:56:00 PM  
Anonymous UnRealtor said...

Don't overlook the panic effect. Just because sellers seem to be reluctant now, in a newly chilled market, wait until the market becomes colder than the Arctic.

What foolish speculators remain, will take their loss and head for the hills, and the inventory will climb.

Add in the suicide loans people have been using to "afford" these over-priced homes, with rising interest rates, and you have even more inventory pouring on the market.

In 12 months I think this market will look very different that today.

Cash will be king, so be patient, save your money, and get ready to make a move in 2007.

5/10/2006 04:11:00 PM  
Anonymous Anonymous said...

unrealtor, thanks for the feedback.


bh

5/10/2006 07:23:00 PM  
Anonymous Anonymous said...

My guess is within 2 years. I believe it's the re-adjusted ARMS that will start the major slide. And if energy costs continue to go up or even stay at current levels along with any slight downturn in the economy the drop over the next two years could very well be one of the worst on record.

5/10/2006 07:25:00 PM  
Anonymous Anonymous said...

WELL I GUESS THIS ARTICLE ANSWERS MY QUESTION FROM YESTERDAY:

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.

5/10/2006 08:14:00 PM  
Anonymous Anonymous said...

As a seller, the market has become fustrating. I have a beautiful townhouse in clifton that my husband and I are selling and some buyers have come to see it 3 to 4 times and not deciding yet. The amount of townhomes for sale right now is staggering. I'm also out there as a buyer and understand both sides of the coin. It is crazy to see some of the prices people are asking for small houses but boycotting only hurts everyone. Some of the lowball offers we have gotten just make it impossible to pay the realtor the 4% commission and have enough to buy a small house. It may be that we need to take it off the market and wait another year before moving.

5/12/2006 07:46:00 AM  
Anonymous Anonymous said...

Here is my listing, it has been on the market for 50 days even though it has the lowest taxes, fee's, and better area than some of the townhomes in clifton. Buyers don't realize that sellers have to buy property too. Boycotting hurts everyone.
http://newjersey.craigslist.org/rfs/159343461.html

I guess we will just have to wait until the market settles before re-listing.

5/12/2006 11:48:00 AM  
Anonymous Anonymous said...

I am in Warren County close to rt 78 trying to relocate to CO for job reasons. We have been trying to sell our 3 yr 3000 sq ft custom home on almost an acre our taxes are under 8000.00 List for around 480 we have dropped significantly already still no bites. I grew up in Bergen County. You can keep those small homes on postage stamps they are overpriced and the taxes are higher than my new home for some 50 60 or more yrs in need of everything updated home. In search of homebuyers anyone got any?

5/15/2006 12:39:00 PM  
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5/18/2006 05:16:00 PM  

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