Sunday, June 11, 2006

Weakness at the Jersey Shore

From the Asbury Park Press:

Signs of weakness

It wasn't a pretty picture when Charles Kovach and his wife, Brenda Connolly, first took a look at an octagonal-shaped house on LaReine Avenue in Bradley Beach, a block-and-a-half from the beach.

The home was run-down. It had no insulation or closets.

"It was a disaster," said Connolly, a real estate agent at Diane Turton Realtors in Avon.

But Kovach, who buys residential properties, fixes them up and resells them — also known as "flipping," — saw something and bought the house for just under $500,000 last August. He spent about $200,000 for renovations and other costs, completely transforming the structure. Now he hopes to sell it for $849,000.

But the house has been on the market for three months. A year or two ago, it probably would have already sold.
...
Last year, real estate investors accounted for 15 to 20 percent of residential sales in Monmouth and Ocean counties, said Jeffrey Otteau, president of the Otteau Appraisal Group, a real estate consulting company in East Brunswick. This year, he estimates it will be less — about 5 percent.

In the near term, Otteau said, investors will be rushing to the sidelines, hurting the market even more.

"Investors will be looking to liquidate and that is going to bring additional supply onto the market and will further weaken the real estate market," he said.

The conditions under which many investors look to buy and sell single-family homes are just no longer present, Otteau said. Typically, they hope that prices will rise quickly and until they can sell, they expect to cover their carrying costs with rents.

Neither is expected to happen. Otteau said the rise in home prices has peaked and will, at best, remain flat for the next three years.

30 Comments:

Anonymous UnRealtor said...

"Neither is expected to happen. Otteau said the rise in home prices has peaked and will, at best, remain flat for the next three years."


Is there a historic precedent for home prices "remaining flat for years" in the NY Metro area?

6/11/2006 11:37:00 AM  
Anonymous Anonymous said...

Flippers/speculators/investors are going to get crushed as the real estate market tanks. Good for them.

6/11/2006 11:49:00 AM  
Blogger Richie said...

The real estate industry is HOPING that prices remain flat.

Will they? All depends on the sellers and how much desperation they have to sell the homes or investments. With rates rising, I doubt all these people bought their investment properties with cash.

-Richie

6/11/2006 11:54:00 AM  
Anonymous Anonymous said...

It`s not yet a "Buyer`s market" until we saw 30% decline in home prices.

Don`t believe in the hype of media and salesmen that it is now a buyers market !!!!!

6/11/2006 03:23:00 PM  
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6/11/2006 03:35:00 PM  
Anonymous Anonymous said...

We live at the shore and here are some listings that are by flippers: One down the street was bought 6 months agoo for @ $500k and is now on the market for $799k. Another one bought 3 years ago for $350k and seller wants $719k...Then we have one a block away that was built in 1935- no updates/ improvements, 1 bath, complete rennovation needed... seller has lived there over 25 years and is requesting $739k for the disgusting house!
Why are realtors encouraging high prices when it is clearly a waste of time and money.
A ton of shore open houses today adn not a soul to be seen at them.

6/11/2006 04:38:00 PM  
Anonymous Anonymous said...

It`s not yet a "Buyer`s market" until we saw 30% decline in home prices.

Don`t believe in the hype of media and salesmen that it is now a buyers market !!!!!


Realtors earn HUGE Commissions from EVERY HOME SALES...

THE HIGHER THE HOME PRICES... THE MORE MONEY THEY GET.... they don`t care who the buyers are... as long as they get their commissions !!!

6/11/2006 05:06:00 PM  
Anonymous Anonymous said...

Just got back from a weekend in Wildwood Crest, there are an incredible number of condos for sale and/or for rent.

I have gone there the same weekend every year for the past 10 years, and I cannot believe the change.

The condos have been under construction for the past several years needless to say, but this year the town was downright eerie. It's a ghost town!

jw

6/11/2006 05:34:00 PM  
Anonymous Anonymous said...

"Last year, real estate investors accounted for 15 to 20 percent of residential sales in Monmouth and Ocean counties, said Jeffrey Otteau, president of the Otteau Appraisal Group, a real estate consulting company in East Brunswick. This year, he estimates it will be less — about 5 percent."

Umm, excuse me, what about the other 80 percent that aren't investors, flippers, etc? What do you suppose their ability is to hang onto their properties without the ability to refi or sell when they are upside down on their mortgage and falling behind on payments?

6/11/2006 07:20:00 PM  
Anonymous Anonymous said...

Is there a historic precedent for home prices "remaining flat for years" in the NY Metro area?

Well, in the early 1990's they declined and stayed that way for years in NY metro region.

6/11/2006 08:41:00 PM  
Anonymous Anonymous said...

Just got back from a weekend in Wildwood Crest, there are an incredible number of condos for sale and/or for rent.

I have gone there the same weekend every year for the past 10 years, and I cannot believe the change.

The condos have been under construction for the past several years needless to say, but this year the town was downright eerie. It's a ghost town!

jw


JW

I wish I had the nerve to show your comment to friends of mine that got suckered into one of those ponzi scheme condos down there - they werent supposed to have to make 1 payment june was no 7 - they took out a no doc,loan and have already paid out in mtge payments what they would have made I have tried to tell them this will never sell but they can not believe it.. they wont believe it
KL

6/11/2006 08:56:00 PM  
Anonymous Anonymous said...

KL,

I wish I had the nerve to show your comment to friends of mine that got suckered into one of those ponzi scheme condos down there

If they've been down there recently, I'm sure they already know they've been had, whether they admit it to you or not.

The loss of the hotels that were knocked down combined with the unsold condos that were put up in their place is going to kill the local businesses.

It looks like an deserted street scene on a movie set, a modern day ghost town. What a shame.

jw

6/11/2006 11:02:00 PM  
Blogger Metroplexual said...

Grim,

FYI. Housing Panic is featuring your lowball.

6/12/2006 03:38:00 AM  
Anonymous Anonymous said...

GRIND!!!!!!!!!!!

BOOOOOOOOOOOYcott Houses!

Bob

6/12/2006 07:08:00 AM  
Anonymous Anonymous said...

we love ya Booya Bob
-- BM (not bob)

6/12/2006 04:33:00 PM  
Anonymous Anonymous said...

In this "cooling off" real estate market, suggest that the average residence is shown about 4 times a week during the first 3 weeks of a real estate listing. After that, an unsold home goes "stale" ... it gets shown less .

6/20/2006 03:12:00 AM  
Anonymous Anonymous said...

I don�t really have a useful comment on your site, but it was a nice break from my own real estate work. I just weanted you to know I enjoyed the visit and hope you can visit my site if you have a chance.

6/20/2006 05:10:00 AM  
Anonymous Anonymous said...

When I go blogging, it often ends up a fruitless journey. I often think I'd do better if I just stuck with my own real estate sites ... and then I come across a blog like yours, and it make the trip worthwhile. Thanks. Visit my site if you have a chance.

6/20/2006 03:43:00 PM  
Anonymous Anonymous said...

. Silence Is Golden: Be courteous but don't force conversation with a potential buyer. He wants to inspect your house, not pay a social visit.
Go here for more ideas.

6/21/2006 07:12:00 AM  
Anonymous Anonymous said...

watch "absorption rates" closely. It's a time-tested yardstick for home sales. Does it prove that the Housing Bubble has already popped? You bet it has.

6/21/2006 07:24:00 AM  
Anonymous Anonymous said...

The No. 1 sellers' complaint on the is the "showing" process ... the line of people trudging through their home, inspecting their lives, in search of who knows what .

6/21/2006 01:28:00 PM  
Anonymous Anonymous said...

You can do a lot to For example, curb appeal sells: do some landscaping. Plant some flowers. Remember that the front door greets buyers. Make sure it offers potential a bright, warm welcome.

6/22/2006 10:57:00 AM  
Anonymous Anonymous said...

Hint #5 for . Loose knobs, sticking and squeaking doors and windows, warped cabinet drawers, and other minor flaws detract from home value. Fix them. Most buyers assume there will be ten hidden problems for every one they see.

6/23/2006 06:23:00 PM  
Anonymous Anonymous said...

Here's the home buying process into a single weekend. She does it by compressing the real estate marketing budget into a much tighter timeframe than normal .

6/23/2006 09:36:00 PM  
Anonymous Anonymous said...

Even if you sell your home "as is, subject to inspection" � you can do a lot to . A top-notch Realtor� will probably hand you a list of at least a dozen things you can do to help improve your sale. If they don't, well, maybe you need to .

6/24/2006 02:15:00 PM  
Anonymous Anonymous said...

I don�t really have a useful comment on your site, but it was a nice break from my own real estate work. I just weanted you to know I enjoyed the visit and hope you can visit my site if you have a chance.

6/24/2006 06:52:00 PM  
Anonymous Anonymous said...

You can do a lot to For example, curb appeal sells: do some landscaping. Plant some flowers. Remember that the front door greets buyers. Make sure it offers potential a bright, warm welcome.

6/26/2006 11:06:00 AM  
Anonymous Anonymous said...

. Noise does not sell well. Let the Realtor� and buyer talk, free of disturbances. Background "soft playing" music is okay, but the wrong sounds will turn buyers off. Noisy children and animals are roadblocks to a contract � and traffic, trains, and planes must be dealt with honestly, if they are part of the deal. Go here for more ideas.

6/29/2006 02:35:00 PM  
Anonymous Anonymous said...

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6/30/2006 04:48:00 AM  
Anonymous Anonymous said...

Even if you sell your home "as is, subject to inspection" � you can do a lot to . A top-notch Realtor� will probably hand you a list of at least a dozen things you can do to help improve your sale. If they don't, well, maybe you need to .

6/30/2006 06:57:00 PM  

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