Weekend Open Discussion
I'm going to open up the weekend thread earlier than usual. Since my web access is a bit spotty, I'm going to get the topic up now.
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!
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!
198 Comments:
Are we going to have
Summertimes Blues in the
Housing market?
Harvard says it just
a slow down.
Will we have a relief
rally?
heard on the radio that some people have resorted to buying $9 St. Joseph "kits" to help them sell there homes.... apparently you purchase the statue bury it upside down in your yard and your home sells.... what planet am i on anyway
I had two realtors call me this week. These were realtors that I had not spoken with in 6 months to a year. I got the calls out of the blue.
will another rate increase do us in?
We have elections coming up,will
this have an effect?
Who do we sell to?
I heard the new ReMax ad on WCBS-AM this morning. I had to laugh when I heard the new marketing come on.
"We have more houses for sale than ever!"
Study Says 39% of U.S. Housing
Is at Risk for Falling Home Values
http://www.realestatejournal.com/buysell/markettrends/20060616-nutting.html
By Rex Nutting
From Marketwatch
A growing percentage of U.S. housing markets are "extremely overvalued" and are at risk of falling prices, according to a study based on government data released Monday by Global Insight and National City.
In the first quarter, 71 housing markets, representing 39% of all U.S. housing, were deemed to be "extremely overvalued" based on median sales prices, median income, population and historic values.
That's up from 64 markets accounting for 36% of housing in the fourth quarter. In the first quarter of 2004, just 1% of housing was considered overvalued. To be "extremely overvalued," homes had to be valued at least 34% more than "normal."
When prices do fall from overvalued levels, they typically fall by about half the overvaluation, DeKaser said. The correction usually takes three and a half years.
Well, guess I've got plenty of time to save up for a larger downpayment.
Another dead weekend for the greedy money grubbing sellers and starving realtors.
BOOOOOOOOOYcott Houses!
Bob
The greedy grubbers will get the message in time!
NO MAAS TO RIPOFF HOME PRICES!
NO MAAS TO MONTHLY SLAVE PAYMENTS!
Babababababababa
BOOOOOOOOOYcott Houses!
Bob
Should someone
start posting
Bankruptcies
Foreclosure
Info. on the site.
It will give us a trend
Boycott Open Houses and Bids!
Let them rot until 2007 at least!
watch realtytrac and count the listings on the various tabs.
I find the houses there, look at the lien/due amount, then check to see how much the houses are listed for on the MLS.
It's not all the information available, but I've been able to see a trend. I've been watching since January on a few zips.
"the midtown direct train line which will soon have freight trains running during the AM hours"
Can you elaborate on that? When was this decision made? Any recent articles on this?
Thanks Richard. This may sound like a dumb question, but are the freight trains mandated to move slower to make less noise? Will these trains really be a big issue?
On a related note, I noticed on one street (Glenn Ave in Millburn) that people were all selling their houses withing a few months. One after the other, every house on the street was up for sale. Looked up comps and no one had sold on that street in over 6 years.
Turns out, there's a big parking deck planned for construction right behind these houses.
Any buyer would be screwed twice-over, once from the overall market decline, and twice from the eyesore in the back yard.
I am interested in Waldwick, NJ in Bergen County. Not sure of the school systems and property taxes. If anyone has any info on Waldwick (good or bad), I would appreciate it. There seems to be the potential for some affordable houses (small ranches or capes which is fine with me). At the moment they are listed in the $400- $450 ranges. Maybe next year they will be $350. Waldwick also has a train station which is appealing to me as I commute into Penn Station. Thanks in advance!
As someone who lives (in an apartment) relatively close to a freight train line in NJ (not NJ transit tracks), I can attest to the loud noises and vibrations from the trains, pretty much at any speed, fast or slow. I would think long and hard before buying a home within sight of tracks.
Andy
BTW I would like to buy a home within walking distance of a NJ Transit station, but not within sight for the reasons I sighted above (assuming that they might run freight on the tracks).
Andy
I was in Summit, NJ this morning. While driving approx 1/2 mile into town, I saw 4 for sale signs and 1 house for rent. I thought we woudn't see this in Summit. Is Summit more prone to the crash as say other towns? Or is this just a rare thing that I saw this morning?
try perth amboy as a
buy alot going on their
and near the train station.
and I believe the Ferry.
Further south, you could try
the middletown Area,,
Ferry Service, its a little pricey
but cheaper.
Many Townhomes for sale
Got an email from RealtyTrac.com this morning:
"RealtyTrac, in partnership with RealtyBid.com, is pleased to announce the online auction of two Long Island homes."
Do you think we are at about 1989 in terms of the last cycle?
- Cultural Infidel
can we please stop the Summit references already?! for those who don't know, there was somebody who said that in a falling market nicer towns tend to hold their values better - like summit. it was 2 or 3 posts which was months ago. people here just love to beat dead horses.
I'm not sure about comparing all points on a graph if you were looking at, let's say, four variables between '89 and '06.
We could plot inflation points, home prices and overlay consumer confidence for the three years prior.
I think the internet and "hype-it news" have added a super-acceleration effect, regardless of the argument that house prices are more inelastic because of time-to-market/transactional/reporting delays.
In addition, homeowners are really not in the best of condition to hold out for years, like then. So economic slowdowns will have a greater impact on a microeconomic scale (More people have more debt and their mortg. is more of a percentage of their net income).
So, anyway, my opinion is accelerated reduction, rather than a simple replay of 89-93.
Pat
Thank You!! I'm so tired reading about this Summit thing myself. It's like the media in here. You say one thing and people take it as something else and run with it. for months!!! Jeeeeeeeeeeeezzzz. Enough already!!
What's wrong with Summit references... did Summit get moved to North Carolina so now it's not eligible for discussion?
Pat
So where are all the building materials going to flow through over the next two years to build all the casinos in Pennsylvania?
From NY, or up from Baltimore?
pat
InvestorDavid,
So for a freight training running throught Summit?......
Just Kidding,
Andy
Summit,
raw nerve, must be a summitter
with a house for sale.
Lets try Dover.
I meant "through"
and I really was kidding,
Andy
My realtor said that if we don't buy now, prices will be double next year because of pent up demand. She also told us that we should not bid lower than the asking price because it would be an insult to Bergen County. I guess Bergen County is immune too?
You just wanted to type "Summit" a couple of times to piss people off, didn't you, Andy.
Pat
Whole Foods just banned the sale of live lobsters
I say any property within a two mile radius of a Whole Foods store will go down as a result
If you have to buy a house in Bergen County, give an offer which is 10-15% below the asking price.
And risk insulting the sellers in Bergen County?????
can someone post the WSJ
article about "The McMansion Glut"
Its seems the sales are slowing.
Its todays paper.
if its a McMansion,,,the living
room could be empty.
No furniture yet.
Pat,
Oh yes!
If you can't kick a dog when its down, when can you?
Andy
I am expecting the price to go down another 20-25% during next 3-4 years.
20-25% decrease is nothing considering over 100% run-up in last 5 years. 20-25% decrease still makes NNJ unaffordable. I say 35%-45% when it is done, then NNJ RE prices will be more in-line NNJ/NYC metro wages.
It is an observation. I don't have hard data to back it up.
Summit, Summit, Summit
I moved from Bergen Cty (Fort Lee, Englewood Cliff) area to Summit last year. Summit is nice. However I notice that people in "nice" part of summit aren't driving experience cars like "nice" part of bergen county. Most people in Summit have 35k-55k cars in their driveways. People in bergen county normally have more expensive cars (45k-65k).
I dont' think Summit wasn't that affluent before they start running mid-town direct trains 7/8 years ago.
Just my 2 cents.
investordavid,
I meant 35% - 45% from 2005 peak price.
anon @ 12:57
investordavid
I know you are in Bergen county. Thank you for attesting the better car theory.
My better car theory is that rich/affluent folks want to live next people have as much $$$ as them. Except some package of Summit of multiple million mansion, people in Summit have decent homes with not very expenisive cars.
My point is Summit is not as special as most people think it is.
anon - 1:05
I'm gonna name my next dog "Summit" so I can say it over and over and over.
You guys are slaying me.
Pat
must be a summitter
with a house for sale
no I'm not from summit and no I'm not selling a house. but shame on me...should've seen that coming in this board.
I'm just tired of this "Summit is not immune" tune. In case you haven't noticed - nobody's saying it is.
oh and I'm not a realtor either btw :)
investordavid,
The 2-3% increase is for historic data going back many decades. Data within a decade could be different than 2-3% average. At the end of the day, with wages in this area, I think 5% in 10 years is possible.
my take on this, (these towns)many people are in over their heads.
between the mort. payment , taxes,
car payments , club payments,
commute cost, (gas)
and of course keeping the kids
up to date with all the stuff
You got to make 250k to keep it going.
did Summit get moved to North Carolina so now it's not eligible for discussion?
I believe summit is still in NJ and I don't believe it's immune either. obviously nobody's stopping you from discussing it. It's just weird if you imagine everybody was in a room instead of this board. everybody would be nodding their heads in agreement - "Summit not immune! hahaha!"
meanwhile in the corner, bob's going "no maas! no bids! boycott houses! boycott gas!"
ridiculous ain't it?
these homebuilding stocks are off
30-50%.
kbh,len,phm,tol,hov,toa,
this tell us the temp.
I live in Summit.
Whats suddenly wrong with middle class?
Since when was a middle class area not "nice"?
What's wrong with a $25k car?
OK, some people are richer than others and live that way, fine, more power to them. But since when was a solid, quiet middle class neighbourhood of ranches and splits something to look down on?
Njgal..the car thing is really personal to some people.
But you're not saving by leasing.
Pat
anyone who says leasing a vehicle
is foolish,,, just does not
understand Finance.
Period.
Car costs and wealth are completely independent. I find that people that have money are more likely to be reasonable with their cars. Compared to people buried in debt thinking whats another $550 a month for dumb ass BMW if it makes me look good.
I don't have a car payment, own my car outright. Can't bring myself to replace my car (even though I could afford way more) because I just enjoy not having a stupid expense.
So jsut because your wealthy it does not mean you flaunt it and it may even be the reason why you are wealthy.
How about a boat???.. I would LOVE a 50Ft Hatteras.. Thats a depreciating asset too.. I can still dream right?
I was making that point earlier.. Most people with Old Money do not have the latest gadgets in fact they are very conservative on thier spending
"A wealthy man is someone who earns $100 more than his wife's sister's husband"
-H.L. Mencken
I'm just enjoying the fact that the $300 jeans person must be out sick for the day.
Pat
"My realtor said that if we don't buy now, prices will be double next year because of pent up demand. She also told us that we should not bid lower than the asking price because it would be an insult to Bergen County. I guess Bergen County is immune too?"
LOL, I hope you're joking.
If not, your realtor is a complete LIAR and should be fired immediately.
WSJ article on McMansion glut:
http://online.wsj.com/article_email/SB115042445578782114-lMyQjAxMDE2NTEwNjQxMjY0Wj.html
(triple-click to select long links)
Re: Summit golf course
How does someone recognize a "WASP"? Do they wear a special badge or something?
No.. they have wings and fly around
"Anyone who spends more than 30k on a CAR is a foolish person."
It's a bit unfair to make judgements about people because of their car.
My car costs over $30K -- paid cash for it.
I bought it because I love the car, not because I care what anyone else thinks.
Every time I start the engine, and leave the garage, it feels like Christmas morning.
well, their you go.
leasing can be written off.
you just dont understand
oh well,,
lets discuss housing.
perhaps leasing of a house is
a way to go.
Naw, Minutes, it's all opportunity cost, not actual cost.
If you had three kids at the emergency room with food poisoning, wouldn't you be pissed off at the Doc who was a little late because he was standing at his counter, making his PB&J so he could take his lunch to work?
I mean, if you can grab something for $5 bucks at the 7-11 and then do work worth $$$$$ instead of making your lunch..you know what I mean?
And some people can't write off their cars, folks.
Pat
The other thing with the psychology of buying cars is need vs. want. People project "needs" when they buy a car when in reality they are just "wants". "I need an SUV." "I need 300 HP" .....Those are wants.
By applying a want vs. need assesment on most purchases (not just cars) most things turn out to be wants. When you just buy what you need life is easier and much much much more affordable.
-ANON 1:44:41
aka moonshine
I need a 50Ft Hatteras
Pat,
I love the dog name idea! (I won't repeat the town name again!)
To all the NJ car responses,
The level and number of responses on cars is not surprising to mr considering how NJ has the most cars per capita, is very car-centric, etc...
Andy
BTW the one guy I met in my life in NJ who never had to work, because his family was so rich, did NOT drive an expensive car.
LA has the most cars per capita. 3!
I need some advice. I'm looking at buying a house that was probably worth about $800K if they could have sold it in February, unfortunately for them, they were asking $1. I had an offer of 705 that they rejected when they were asking 800. Now they're down to a listing 750. They're now coming back to me asking if I'm still interested. It seems like no one bit at their lower listing and ar willing to accept my offer.
I'm wondering your thoughts on the market and where it's going. I lucked out and sold my house for top dollar in March and I'm living with family for the summer, so I'm set until Sept, but I'm wondering if it's worth it to wait out the price drop, rent in Sept and hopefully buy in the spring/summer of 2007. Is the price drop going to be that big?
Thanks.
YIKES
anon 02:27:06 PM
the summit is not immune discussion was months ago which means you're not that new ;)
The McMansion Glut
America's love affair with sprawling homes is showing signs of waning as the real-estate market softens and aging boomers seek smaller houses. Our reporter on nervous sellers and the growing supply of 'faux chateaux.'
By JUNE FLETCHER
June 16, 2006; Page W1
Mickey and Jane Finn put their five-bedroom, 6,200-square-foot home in Leesburg, Va., on the market in April, but already they've cut the price to $899,900 from $1.1 million. Now, they've decided to put it up for auction.
What's the hurry? Down the street in their leafy subdivision, two similar-sized houses are also on the market, and around the corner, five more have for-sale signs. The Finns, who paid $692,000 for the new house in 2002, recently retired and, with their two children grown, they're eager to move to a place half the size. "We don't need this big a house anymore -- if we ever did," says Mr. Finn, age 63.
The golden age of McMansions may be coming to an end. These oversized homes -- characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers -- fueled much of the housing boom. But thanks to rising energy and mortgage costs, shrinking families and a growing number of retirement-age baby boomers set on downsizing, there are signs of an emerging glut.
Interviews with dozens of real-estate agents, sellers, developers and housing economists turn up signs across the country. In an affluent Dallas ZIP Code, where half the houses have four bedrooms or more, home sales fell 31% in the first quarter compared with the previous quarter. But sales rose 23% in a nearby ZIP Code where 7% of houses have that many bedrooms. In Santa Fe, N.M., homes in the 2,000-square-foot range sell within weeks, while larger ones languish for months, says broker Pat French. In the Boston metro area, sales of homes with four or more bedrooms were flat in the first quarter from a year earlier; sales of homes with three bedrooms or fewer rose 14%. New Jersey appraiser Jeffrey Otteau says the inventory level statewide for large, $1 million-plus houses stands at 13 months, more than twice the state's overall average of six months.
A TALE OF TWO ZIPS
Sales of larger homes are flagging in many markets. See a comparison of home sales in nearby ZIP codes.
There is no formal definition of what constitutes a McMansion. (Some would say it's any home bigger and showier than your own.) One broadly accepted definition, used for this article, is a house larger than 5,000 square feet -- about double the national average -- with four or more bedrooms that is built cheek by jowl with similar houses. Most have been erected since the mid-1980s, when major developers such as Toll Brothers and K. Hovnanian Homes began to chase couples who wanted more space -- and luxury -- than they had when they were kids. These houses often boast grand, two-story entryways, three-car garages, double-height family rooms and master-bedroom "suites" equipped with sitting areas and whirlpool tubs. Developers market the homes under names such as the Grand Michelangelo, Hemingway and Hibiscus -- while detractors have dubbed them "garage mahals," "faux chateaux" or "tract castles."
Big Fuel Bills
The 2003 American Housing Survey, the latest available, found nearly 3.2 million homes in this country with 4,000 square feet of space or more -- the largest category the group tracks -- up 11% since the previous survey in 2001. Part of the big-house mania was fueled by speculation as home prices surged, says housing economist and consultant Thomas Lawler in Vienna, Va. "Folks bought megasized houses well beyond their needs to increase their investment in real estate," he says.
Now, some boomers in their late 50s are counting on selling their huge houses to help fund retirement. Yet a number of factors are weighing down demand. With the rise in home heating and cooling costs, McMansions are increasingly expensive to maintain. Nationwide, electricity rates have risen 12% over the past three years, while the price of natural gas for heating has risen 43% in the same period, according to the U.S. Energy Information Administration. That means it can cost $5,000 a year or more to heat and cool a 5,000-square-foot house in a city such as Farmington, Conn., according to Connecticut Light & Power Co.
The overall slump in the housing market also is crimping big-home sales. The volume of newly built homes sold fell 11.2% in the first four months of the year from a year ago, while sales of existing houses fell 5.7%, says the National Association of Home Builders and the National Association of Realtors. Yesterday, one of the biggest home builders, KB Home, cut its earnings outlook for the year, citing declining demand. Bruce Karatz, chairman and chief executive, said demand has fallen "largely due to a sharp reduction of speculative purchases and an oversupply in new and resale inventory."
Tom Green threw in a high-definition TV to sell
Meantime, the jump in interest rates has put the cost of a big house out of more people's reach. With 30-year mortgages at 6.2% yesterday, a $700,000 loan costs about $4,300 a month, up from $3,900 when rates were 5.28% in June 2003, according to Bankrate.com. "The young people coming up don't have the means to absorb these big houses," says Mr. Otteau, the New Jersey appraiser.
Since February, Kris and Ray Victory have been trying to sell their five-bedroom house in Brookville, N.Y., built in 1987 with a sunken living room and a fireplace in the master-suite wing. The couple raised three children in the 8,000-square-foot home, but they say younger families seem turned off by its $1,000-a-month utility bills and $25,000 annual taxes. "Buyers tell us it's too big," says Mrs. Victory, a 45-year-old electrical engineer. The couple recently shaved $200,000 off the $2.35 million price.
This dynamic could become more acute in coming years. As the nation's 78 million baby boomers, born from 1946 through 1964, become empty-nesters and hit retirement age, many are already selling their trophy homes and trading down to smaller models. There are roughly the same number of people in the next pool of potential buyers, but they're marrying later and often have smaller families: U.S. Census statistics show that the average household size in 2005 was 2.57 people -- down from 3.14 in 1970.
Already, the McMansion oversupply is acute in places like Loudoun County, Va. In the fast-growing area northwest of Washington, D.C., thousands of hulking, red-brick colonials sprouted over the past 10 years on quarter-acre lots that had been carved from farmland and woods. In May, 4,719 houses were for sale, more than three times the year-earlier level. The number of sales dropped 39% to 484 in the month, and the number of days a home remained on the market lengthened to 70 from 14. "Sellers are dying out there," says local real-estate broker Michele Stash.
In one Loudoun subdivision, Tom Green, a 47-year-old airline pilot, put his five-bedroom house on the market six months ago for $1 million so he and his wife could downsize to a $592,000 townhouse nearby. But his home had to compete with 38 others for sale in the neighborhood with four or more bedrooms. His 5,600-square-foot, five-bedroom house, which he bought new for $515,000 in 2000, didn't get a nibble for months. Finally, a relocating California family agreed to buy it if the Greens would leave behind their high-definition TV and a lifesize Spiderman statue that had been a gift from Mr. Green's sister -- plus slash the price to $820,000. (They also had to throw in a cookie jar with "Biscuit" -- coincidentally, the name of the buyers' dog -- written on the side).
TheGreens complied. The buyers, John Zuccaro and Cindy Fonseca, say they were emboldened to make their demands when they saw how much the market had cooled since April 2005, when they sold their three-bedroom house in Torrance, Calif., for its full asking price of $759,000 in only five days.
Though huge houses continue to be built across the country, many architects and builders appear to be responding to shrinking demand for McMansions. In the latest quarterly survey by the American Institute of Architects, 68% of the 500 residential architects polled said home sizes are stable or declining, compared with 58% a year ago.
Focus on Smaller Homes
For anti-McMansion activists, who hate to see big homes supplant smaller "teardowns" in established neighborhoods, a decline in demand may be good news. Homeowners in some areas have successfully lobbied for laws designed to rein in the light-and-view-blocking monsters: Last year, Arlington County, Va., limited home footprints to no more than 30% of a lot, while Wood-Ridge, N.J., recently said homes could take up no more than 55% of a lot.
Faced with dwindling demand and a fall in their stock prices, many national builders are starting to focus more on smaller houses, which often feature separate dining and family rooms but just two bedrooms. K. Hovnanian Homes, long known for McMansions, is building such houses under its "Four Seasons" label in nine states. Toll Brothers is creating communities like Cranbury Brook Villas in Plainsboro, N.J., which has two-bedroom homes ranging from 1,656 to 1,958 square feet that can be equipped with lofts, sunrooms and dining-room accent columns (the "Bayberry" model starts at $389,975).
Yet some families have found it hard to downsize. In Phoenix, David and Mary Mumme, both 49, are selling their 4,938-square-foot house, partly because their oldest son is heading to college and partly because maintaining the house and yard -- with pool and waterfall -- takes about eight hours a week. They're asking $1.8 million, about three times what they paid for it six years ago, because they saw nearby houses sell quickly for about $2 million last year. But even though the house has 12-foot ceilings, marble countertops and skylights in the closets, no one has made an offer during the month it's been on the market.
John and Barbara Fiore, both 54, had to slice $50,000 off their $900,000 price to move their 5,500-square-foot house in Warwick, N.Y. Ms. Fiore, who has five grown children, says she worried that no one would want her six-bedroom home while it sat on the market all last year, because today's families are smaller. (The eventual buyer was a married doctor with three young children.) The delay in selling "was scary," says Mrs. Fiore. The Fiores, who built the house 14 years ago, now live in a three-bedroom house nearby that's less than half the size. Meanwhile, Mrs. Fiore's parents recently sold their Warwick house in a month -- but it's only 2,500 square feet.
And even some young couples who have tried the big-house life are getting out of it, trading space for higher-quality construction. Last October, Andrew and Sheri Leppert of Alpharetta, Ga., both 32, exchanged their four-bedroom, 2½-bath home for a smaller one that has only three bedrooms and two baths -- yet, at $450,000, cost 50% more. Ms. Leppert, a homemaker who now has a young child, says she was attracted by the new house's details -- including beaded-glass windows, wide-plank flooring and 9-foot-tall doors made of solid wood -- which elevated it in her mind above the "Georgia sprawl" house she was leaving. She and her husband never used the fourth bedroom of their old house, she says, and she doesn't miss cleaning the extra space. "Taking care of it became a burden," she says.
Write to June Fletcher at june.fletcher@wsj.com1
I can remember my father picking me in a K-car hood held shut but electrical tape.. I grew up in Sands Point Ny..
Richie said...
Some people enjoy cars of a higher quality, therefore they pay for it.
BMW and Benz are expensive cars, but they are NOT higher quality.
German cars are flashly and drive smoothly, but are as reliable as an addicted gambler at the horsetrack.
Dream on, everyone. No one can have a car in NJ unless they clear $400K MINIMUM.
According to the New York Times, the new standard of living in NY/NJ is that you have to spend at least $300/week getting your cufflinks freshly anodized and a MINIMUM of $5000/month on novelty ties. But that is nothing compared to the $850 that the average meal at the trendy restaraunts will cost you.
Good luck ever affording a car in New Jersey.
investor David.. Yes you are right.. what I ment by conservative is the people I know..don't really spend the money on clothes ect.. latest gadgets and features don't really appeal to them.. But they will blow alot of money on things that will improve the family on a whole..Not cars but maybe a summer home..
Anyone else notice the 10Y today?
5.12%
I've been keeping an eye on the treasury market between margaritas..
grim
U.S. housing boom is biggest since 1890
Increase in home prices may have been psychological, economist says
By Amy Hoak, MarketWatch
Last Update: 1:30 PM ET Jun 16, 2006
CHICAGO (MarketWatch) -- The recent housing boom is the biggest the United States has ever seen, but its underlying reasons may have been psychological, economist Robert J. Shiller said on Friday. New data also suggest the market might be at the end of a cycle, he added.
The only time since 1890 that compares to the recent residential real estate market is just after World War II, the Yale University professor said during a presentation on U.S. home prices, held at Standard & Poor's in New York and broadcast to journalists on the Web.
"After World War II, the soldiers came back and they wanted houses and started the baby boom. And when you had babies, you wanted houses with at least two bedrooms -- and that wasn't so common back then. They went on a buying spree and it pushed home prices up," he said.
The recent boom, however, doesn't have the same fundamental variables causing prices to soar, he said, adding that variation in such things as building costs, population and interest rates doesn't adequately explain the reason for the housing boom.
"I don't see why home prices should be shooting up that strongly," Shiller said, adding that speculation may have played a role. "It's a sign of concern."
Shiller was co-author of "Irrational Exuberance," a book that chronicled the stock-market bubble of the late 1990s. He also co-developed the S&P/Case Shiller Home Price Indices, designed to measure the average change in U.S. home prices. The indexes are based on 10 cities -- Boston, Miami, New York, San Diego, San Francisco, Washington, D.C., Chicago, Denver, Las Vegas and Los Angeles -- and are now the basis of new futures and options trading at the Chicago Mercantile Exchange.
Within that index, Shiller has noticed a short-term trend of cooling home prices that could signal an end to the cycle of steep appreciation increases. Investing in the index could help homeowners hedge against price fluctuations in their homes, he said.
Shiller said he is not allowed to invest in home price index futures.
During a question-and-answer session, he said that the stabilization of home prices could also have some effect on consumers' means of gaining equity. Low interest rates inspired people to refinance their homes, and the increasing value of their houses allowed them to pad their pockets with spending money; consumers will now have to turn to other means for financing, including credit, he said.
In the future, insurance companies may offer policies to shield consumers from lowering home prices, thanks to the futures now available, said David Blitzer, managing director and chairman of the Index Committee at Standard & Poor's, who also participated in the presentation. He identified the housing market as a continued stable investment.
"If you want volatility, go to the stock market," he said. "If you have any doubts of that, take a look at it over the past six weeks."
You got the fish on the hook. Offer $650k. Your offer of $705k was valid at that time, now the market is entirely different.
See how desperate the seller is. When they are calling back old low-balls, you know that they're hurtin for someone to buy it.
Richie,
Thanks for the response. It's only been 10 days since my offer of 705, so they're definitely looking to sell now, but I'm fearful of pissing them off. It's actually a widowed grandma and I don't want to be a-hole. I know it's a lot of money to not try to get off the house, but my conscience tells me to not take advantage of an old lady. I wish I never met her and I'd have no problem.
I think the realtor and her son are driving the process by trying to lower the price and get me into a bidding war with someone else. She wanted to sell to me 10 days ago.
Thanks,
J
"I know it's a lot of money to not try to get off the house, but my conscience tells me to not take advantage of an old lady."
It's a business transaction.
If you have no problem taking $50,000+ from your family, and giving it to an old lady, you shouldn't be out buying houses, IMHO.
That old lady probably paid $15,000 for the house 30 years ago, she'll be just fine.
As Gordon Gecko says: "If you need friends, get a dog."
http://tinyurl.com/mxvwc
:)
Anon:
Our first bid on the house we bought was about 130K less than the original asking ..She was also older and we met her and we probably should have stuck to the original bid but instead we settled at 110K less the asking..It is a business decision but in the end after everything (the home inspection cost her another 10K in repairs)we still feel we overpayed by about 20K.. The question is are you ok with overpaying ..Like you we are living with family.. It was time to go.. so we were fine with overpaying for a little piece of mind.
I would wait. People are not spending $705K so fast these days.
"UnRealtor said...
Boycott Open Houses and Bids!"
I am doing just that - I have taken myself out of the market for at least 6 months. I have no desire to go to open houses or look at any of the listings. Sellers and realtors need to stop this nonsense and wasting time if they are serious about selling a house.
the price of homes in the US
is going down , not up.
thats a fact. average price drop
is 3%.
Anon 11:33 am I was told by someone on this blog sometime ago that SUMMIT will not participate in the brutal housing downturn which has just begun; I think with the conviction the blogger had that maybe the town council voted down any real estate slowdowns in SUMMIT...a special special place indeed :)
InvestorDavid/All,
Beyond just trying to low ball as mush as possible. Where is the market truly going, I shouldn't have mentioned the old lady part, I'm willing to offer less if the market is going down significantly. The price of 705 is less than the value of the home today. In 2 months it may be more, that's what I'm trying to figure out. If pricesare going to stabilize in a month or two, then I'm fine with the 705 price, but if the market will drop another 10%, then houses that are 100K higher could be bought for 705 next year and it's worth my wait. I'm fearful of houses being picked up by people that have been standing by because they can't wait any longer. I don't want to be in September looking at stable prices and an inventory of leftover crap. I can wait, but only if it's worth my while.
Thanks,
J
I don't think homes will "stabilize" at 10X median incomes.
Speculators have already left the market, adjustable rate mortgages are resetting, and inventory is building.
Act accordingly.
Or you could go over to Shiller's site and short your house if you're that worried about losing money.
http://money.cnn.com/2006/03/22/real_estate/playing_the_home_price_market/index.htm
Pat
We don't know what is going to happen.. We looked at it this way.. This is our long term house. We can afford it w/ a conv loan .. and we ran comps and took 20% off and that is what we offered.. It was accepted. we are happy with our decision. It was the right one for us and our situation.
Already broke 31,000:
"Currently, there are 31,048 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State, 99% are available to be searched on this site."
http://www.gsmls.com/
We just broke 30,000 only a few days ago, sellers are running for the exits.
Ahh, InvestorDavid:
Doesn't it strike you as comical that banks are stumbling over each other as to who will offer, at the end of the month, the highest rates for the longest time?
I told an old childhood friend (who worked for a very large East Coast bank until last month) that I couldn't believe my bank had charged me a lousy $2 return check fee when we have XXXXXX in a money market there. [Yes, I'm one of those cheap people you mention.]
I thought she would criticize and belittle the MM and try to push some investments at her new place.
She just shrugged, and said, "Yeah, you and everybody else has that in their mm now..so the bank can get away with fees now that they couldn't before."
Fees go up. That is where the money is, as you ask. Where the fees go up.
I am thinking that maybe more people are afraid than many think.
J,
Although nobody knows where we go from here, there are strong indications that prices will be at least 10% less this time next year. But there's a lot of things that can happen between now and then so don't rely on people telling you to wait x months then buy. If inventory and interest rates keep climbing, and houses sit longer the pressure on sellers to reduce their asking prices will only build.
The reason we can't predict actual numbers and how long it will take is because it will depend on how sellers react. The house you bid on may have been paid off years ago or it may be that the seller's rate is about to reset and he/she can't afford the increase in x months. Maybe he'll take a 50k profit instead of 80k to sell before then. Who knows?
Also, some areas tend to hold their values better than others. Some towns may see up 20-25% while some will see 10-15% declines.
What's going on in Montclair?
Town after town is showing slowing down of real estate sales and price reductions.
But when I check
www.baristanetnj.com, and then click on "real estate", then I see 3 columns comparing recent sales in Bloomfield, Montclair, and Glen Ridge. It looks like there are still bidding wars in Montclair because the recent sales (as of June 6, 2006) all show that they sold for MORE than the asking price.
anon 5:13 pm - did you go get original list prices or just using the what the realtor says was list?
"anon 5:13 pm - did you go get original list prices or just using the what the realtor says was list?"
Exactly.
People must track the market for themselves (using realtor.com for example), to watch specific properties as they drop in price.
grim ghost
your right on.
Montclair is a good example of
that
I don't know where baristanetnj gets their real estate info.
The site is supposedly news from around Bloomfield Avenue and the main author is a NY Times reporter (D. Galant). Bloomfield and Glen ridge do have some price reductions listed, just NOT Montclair.
I just heard that at 10PM, Fox 29 News has a report showing people "you don't have to be rich to buy a home at the Jersey shore..." Unbelievable! This is some serious deception.
Hi all
New Yorker looking to move to a home in Jersey. My wife is looking for a premier address and we keep hearing Summit. Unfortunately, my broker out there is telling me I shouldnt bet on a deal despite the fact that it is a buyer's market now... I'm basically in the $1 - $1.5 million range.... I realize Summit is where the "best people" are, but are there any areas that might equal it in status, but with a little trimming off of the price tag
Wall Streeter
Wall Streeter, not New York/Orange County?
How far in NJ?
Get a new broker if you have to come to a blog to ask this.
"best people" ... I feel nausous ...(and in case you're wondering about envy - I work on ws as well)
Hey Wall Streeter,
I am a fellow New Yorker who relocated here from Summit a few years ago.
Expect to get about as much in Summit as you would in Manhattan with 1 mil. And as I am sure you already know, in a choice area of Manhattan, that gets you a studio right now. (NY Post recently featured a 995k studio in one of these areas.)
Best of luck to you.
BTW, it is true what they say. A fool and his money are soon parted.
Wall Streeter--
I hate to say it, but Summit is so far retaining its value in this market far better than the lesser towns. The Midtown Direct is a tremendous asset for a city commuters. And that's not even mentioning the superior schools, the downtown, the wonderful houses, location (proximity to highways, Short Hills Mall -- "the" shopping address) So, my point is, you probably wont get a price reduction. My advice: you only live once. If you have the $$ and you want the best, pick Summit, resign yourself to the mortgage payments, and forget about it. The wife will thank you.
Summit seems to draw a large percentage of incredibly stupid people who for some reason have lots of discretionary income, and who are willing to waste ridiculous amounts of that income on a house based on the theory that if a Realtor(TM) drives a BMW, she must know what she is talking about when she says "real estate prices always go up."
Here come the Summit cheerleaders again ...
I don't mean to be one of the "Summit cheerleaders" as written above! But, as a woman, I am already jealous of your wife! I can tell you that your wife will adore you for the rest of your life if you can provide Summit. It's a wonderful lifestyle that most of us can never afford. But it's a wonderful place to raise a family. And the best result is that it will give your children a wonderful leg up to be raised in that atmosphere.
Jealous WIfe
I can't believe "Wall Streeter" goaded so many people into responding to his obviously fake post.
Yuk yuk.
How can I prove that prices did go down drastically during 1987-1995 time period in Northern NJ?
Please take a look at the interesting discussion going on at this thread
http://tinyurl.com/rrswf
This guy sites the OFHEO document at
http://www.ofheo.gov/media/pdf/1q06hpi.pdf
to claim that priced never went down, and in fact the document clearly shows that he is right.
Anon 9:37pm "But, as a woman, I am already jealous of your wife! I can tell you that your wife will adore you for the rest of your life if you can provide Summit."
I admire your candor...hoochie.
the tny URL for the OFHEO document is at
http://tinyurl.com/j4tgt
"So, my point is, you probably wont get a price reduction [in Summit]."
LOL, spoken like a true realtor. And then there's this:
"I can tell you that your wife will adore you for the rest of your life if you can provide Summit."
Real people don't talk like this, times must be tough if realtors are flooding the bubble blogs.
Hope you're all bored this Sunday at the empty open houses. I'll be at the golf course. Perhaps you realtors can log in from the empty open houses, and post some more breathless nonsense.
"My realtor said that if we don't buy now, prices will be double next year because of pent up demand. She also told us that we should not bid lower than the asking price because it would be an insult to Bergen County. I guess Bergen County is immune too?"
You're very naive if you believe this. Either find a new realtor or make an attempt to understand real estate and negotiating before buying something. The days of paying asking price or above are over.
Wall Streeter; The type of communities you may be looking for are in the Sunday NY Times Real Estate section and in the Wall Street Journal home listings, which appear in the Weekend Jrnl. But in the event your post is not a joke as some are asserting, here are additional communities:
Essex Fells
Short Hills/Millburn
Far Hills
Harding
Basking Ridge
Alpine
Ridgewood
Upper Saddle River
Franklin Lakes
Colts Neck
Mountain Lakes
Lake Mohawk
Chatham
Madison
Bernardsville
"Ha! You make judgements all the time about people because of their real estate investment choices!"
Offering advice, is not the same as assuming someone has a certain worldview because they drive an expensive car. Seems your psychoanalysis skills are on par with your real estate "investment" skills...
I think most of the posters in the previous exchange involving "wall streeter" and "jealous wife" are in fact the same person.
I don't mean to be one of the "Summit cheerleaders" as written above! But, as a woman, I am already jealous of your wife! I can tell you that your wife will adore you for the rest of your life if you can provide Summit. It's a wonderful lifestyle that most of us can never afford. But it's a wonderful place to raise a family. And the best result is that it will give your children a wonderful leg up to be raised in that atmosphere.
I spent some time in Summit as a child in "that atmosphere." It was boring as hell. We kids spent most of our time getting drunk, doing drugs, watching TV, and trying to get laid.
I fled to NYC as soon as I as fincially independant.
Wall Streeter,
Parasites like you need to be in Camden..ripping off people's retirement money so that you'll can live privileged.
Wall Streeter,
Consider Montclair. More and more NY'ers are, as some of the other towns in N. Jersey can be a bit "hum drum". It offers several train stations, with a midtown direct to NY. It also has plenty to offer with respect to culture and cuisine, probably more so than anywhere else in Essex or Union counties. The school system isn't too bad, Montclair High is well rated, but there is also a solid private school in Montclair Kimberly.
And, for what it's worth, our new State Treasurer, Bradley Abelow, appointed by Corzine (he used to be a high level exec at Goldman with Corzine) is moving his family from NYC (Upper West Side) to Montclair.
(No, I don't live in Montclair - at this point I personally can't afford anything there that I like).
A seller in the thread 4 below this one "Not the Market it Used to Be" told her realtor about the site.
I wonder if her realtor is the "your wife will adore you" realtor.
Hey, maybe it's Suzanne researching.
Pat
I would advise buyers to consider Montclair only if they want the experience of getting mugged or worse. I live in Verona, and will go to Montclair occasionally for dinner. Some of the homes on Upper Mountain are very nice, and of course, it's a great train commute into the city.
However, Montclair has a higher violent crime rate than Manhattan! Know what you are buying into. A great primer is to get a hold of the Essex section of the Star Ledger each week, in the "law and order" section there is inevitably a Montclair mugging, armed robbery, burglary, etc. Sometimes, each of the 4 or 5 entries are all Montclair! Recently a Montclair resident was jogging off of North Fullerton and was punched in the face and had his Ipod stolen. Another woman was mugged in the Upper Montclair parking lot and had her pocketbook stolen. Etc. What a town!
And several months ago, a Montclair teenager was assaulted by a group of girls who got out of their car on Bloomfield Avenue and started punching her in broad daylight. What a neighborhood!
BTW, Montclair High will be the more of the same. There's a crazy mix of kids from all different backgrounds and you get more of the same kinds of petty crimes, misunderstandings, and worse. Your kids will certainly get an awareness of "all walks of life." ! I will tell you that Montclair High sends more kids to places like Harvard, Yale, Columbia, etc. (5 or 6 a year usually) than other public high schools in Essex County. But from what my wife, who is high school guidance counselor nearby tells me, that is only because there is a good number of potential "diversity" admissions. So SAT scores are not necessarily stellar here. I'd advise MKA, but here the situation is different. If you're a gentile, you'll have to fight for your kid for 4 years because of the large Jewish presence
Happy Hunting and spend your big $$$ wisely...
Wall Streeter--
I don't know if this is a joke or not. But if you are a real person, I stand by my comments to you last night. Take the nasty comments with a grain of salt. Summit is all it's cracked up to be. Don't pay attention to these peons who don't have two nickels to rub together, and spend their time gloating over other people's misfortunes in a changing market. You're looking at a great address, which is where I'd be if I had your money
Wall Streeter,
If you've got it flaunt it
Anon multiple times:
Come on, time for a new alias, how about "big haired girl" or "bling flasher".
grim:
Grim what does your tracking tell you? Are we being trolled?
Anonymous said...
Wall Streeter--
Summit is all it's cracked up to be. Don't pay attention to these peons who don't have two nickels to rub together, and spend their time gloating over other people's misfortunes in a changing market.
6/17/2006 07:56:47 AM
Dear Essex County Realtor:
I have two NJ State "birds" for you that don't require being rubbed together. I'll just wave them at you.
OT- does anyone have experience with this online brokerage?
www.interactivebrokers.com
I'd love some feedback.
JM
The price of 705 is less than the value of the home today. In 2 months it may be more, that's what I'm trying to figure out. If pricesare going to stabilize in a month or two, then I'm fine with the 705 price, but if the market will drop another 10%, then houses that are 100K higher could be bought for 705 next year and it's worth my wait. I'm fearful of houses being picked up by people that have been standing by because they can't wait any longer. I don't want to be in September looking at stable prices and an inventory of leftover crap. I can wait, but only if it's worth my while.
Helloooooooo,
Is this the only house in Summit? Probably not, so why don't you waite. If you are married to the house, most likely something that the realtor will gauge based on your comments and actions, then expect to pay more!
montclair schools are not nice in comparison to other top towns and the infiltration by the lower class element is squeezing even the prime areas. look at the historical trends on crime, school rankings and the like
Montclair schools are the worst! Be prepared to send your kids to private school at 9K - 16K per head/year and pay the $35K real estate taxes. Oh, and one last thing, prepare yourself for the property reassessment--you'll be shelling more out of your pocket next year.
Good luck paying your taxes!
I live in a high rise condo in Hudson Cty. I own my unit. We have bunch of idiots on the board who have run us deep into red territory and we have assessments looming that will run an average of $12 - $16K per unit. They are now even assessing us for "unforseen" circumstances such as a federally mandated increase in flood insurance. The board is also UNUSUALLY motivated for a bunch of volunteers - makes me think they're getting more out of this that justing "bettering the community." They sure don't make decisions in the best interest of the community as a whole. For example, with all this debt they approved $10K for new doors on the gym because one of the board members wanted this. Don't even get me started on the management company. They are useless. Never once do they answer a complaint or concern of the owners, but yet their contract was renewed with an increase.
Our concerns fall on deaf ears. One owner who was particularly vocal was harassed with threatening phone calls and walked into the garage one day only to find her car damaged.
Anyway, what can be done to get some kid of an investigation into these people? I think we need outside intervention, but how do you prove anything?
Anyway, what can be done to get some kid of an investigation into these people? I think we need outside intervention, but how do you prove anything?
Get together with others in the building who are concerned and hire an attorney. I was on the board for 5 years of a building in Hudson County and had more problems with the county government officials who wanted their palms greased. When in doubt--hire an attorney.
Keep up the boycott on Open Houses and bids!
Holy price drops batman!
93 Meadowbrook Rd, Short Hills
MLS 2259341
Mar 22, 2006 - $799,000
Apr 06, 2006 - $749,900
May 03, 2006 - $725,000
Jun 03, 2006 - $700,000
Jun 15, 2006 - $699,000
Jun 17, 2006 - $679,000
Here's a $1M price drop:
20 Elsway Rd
MLS 2276318
OLP: $4,500,000
CLP: $3,500,000
Any insights on New Providence? The market? The community?
HI, i hope i can pick the brains of those more knowledgable than i am in regards to the re market.
i live in linden, nj. i am in one of those situations where i had to get a bigger house in a town with a better school system. i bought one in manalapan.
the house i am trying to sell has been on the market for 7 weeks. last year at this time the comps for my house were around 420,000.
under the advice of my realtor i started out at a 399,900 list price. my mistake was doing this research now and not 2 months ago.
i recently reduced my price to 374,900.
i want to get rid of this house, it is move in condition with updates all over 4br,2ba cape(long cape not short),big yard.from other homes ive seen priced same or higher mine is in much nicer shape and bigger hse. and lot.but its not moving.
should i come down again or am i panicking too soon? FEEDBACK PLEASE!!!!!!!!!!!
The price of 705 is less than the value of the home today. In 2 months it may be more, that's what I'm trying to figure out. If pricesare going to stabilize in a month or two, then I'm fine with the 705 price, but if the market will drop another 10%, then houses that are 100K higher could be bought for 705 next year and it's worth my wait. I'm fearful of houses being picked up by people that have been standing by because they can't wait any longer. I don't want to be in September looking at stable prices and an inventory of leftover crap. I can wait, but only if it's worth my while.
Do what you can to get into Summit. It's a superior town, and it's always better to buy when you have the chance in this area as opposed to waiting and being shut out as the market is only bound to go up. Remember, the market is not going to affect prices in places like this, so you might as well spend the money now
thanks summit realtor - please give your phone number and contact info
Anon 12:40pm,
It depends. I was in a somewhat similar situation a couple years ago in a flat market in the rural Midwest before we moved to NNJ. We were intent on unloading the house before leaving the area, so by the time I factored in our updates and improvements, we lost $20,000 on the house, even though we had owned it for 4 years. It was worth it to me not to have to carry the mortgage there when I was starting over here with a big rent payment each other, even though I marveled that we could lose a little money in real estate at a time when everyone in more desirable areas was making it.
I'm bearish now, like most others on this blog. I think prices will go down before they come up. It sounds like you have priced your house fairly and, with the reduction, intelligently for this market, yet it is mid-June already, and I think the summer will be slow. If you reduce to 360,000 you have knocked 15% off the market high from 2005, and I think you would be ahead of the curve for homes under 500k, and thus, I think you could move this.
Good luck; tough decision.
WM
Oh man, this is seriously the funniest and saddest housing casualty I've seen so far:
http://www.getdshirts.com/
Long story short - "Screech" from Saved by the bell is an f'd borrower.
Screech says:
"During the past years the land around me has developed for the better and my property value went way up. Now that the house is worth a lot more they want it back."
Translation - "I used my house as a mac machine for 250k thanks to the RE bubble and can no longer afford to live in it any longer."
"...Remember, the market is not going to affect prices in places like this, so you might as well spend the money now"
This is a joke, right?
I was driving around Hoboken today and noticed a ridiculous amount of open houses. Picture this: Just about every block of Wash Street has at least open house signs on each of the four corners...not to mention others throughout the town. There are also for sale signs posted on what seems like several buildings per block(multiple on some buildings). I know a lot of these places have been on the market for a long time, too. Yet they continue to build all over town. Is it just me or does it seem like Hoboken is heading in a dangerous direction?
Drove by a bunch of empty Open Houses on our way to and from the beach today. We have no interest in this market at this point. Until sellers and realtors get real, we are not wasting our time looking at anything.
I think everyone should read very closely the post from anonymous from Verona putting down Montclair. Talk about vile. You don't even have to scratch the surface to "get" the racism and anti-Semitism. Do most people in Verona think like you? If so, your post is a good reason NOT to buy a house in Verona, for sure! Maybe that's why your property values are lower than Montclair's?
why people are talking about car or wealth today? I feel we are driving erratically today.
RE "investor" said:
"I suggest that you refrain from posting here and go over these questions with your realtor. You'll get a more balanced opinion from him or her."
A classic!
RE "investror" how can you even begin to suggest that a salesperson would provide "a more balanced opinion"? Have you no conscience at all?
What's next, suggesting people go into the local used Honda dealer and ask the salesperson if the blue Accord out front is a good buy?
Based upon my own theory concerning "baby boomers' and retirement, last year I sold the house that contained equity I worked my entire life to grow. I sold it thinking I could save as much of the "high market" equity as possible as I approach retirement and relocation.
As I still have several factors that make renting very difficult, I didn't cash out completely and purchased a lower cost house. The thinking being I'd be hurt less in it then the much higher priced one.
Now I am wondering if and when I can possibly hope to break even on last year’s purchase. I was hoping this decline would pan out like the late 80’s early 90’s and settle into a market that may rebound enough in 3 or 4 years to break even. Do you think there’s still a shot for this? I’m hoping so, or at least some rebounding to minimize the loss.
Thanks for this blog.
It has reinforced my thinking over the last several years and provides some valuable information of the current conditions.
Thanks again.
Bill
reinvestor101 @ 11:59
There's a lot of pent up demand out there for homes and buyers will eventually show up.
What?? What about inventory which is growing at the rate of about 0.2% everyday! If you hold on for longer there will be more people out there trying to compete with you in selling their property. Quite a few amongst them will be Real Estate investors. Didn't RE investors constitute some 30 % of sales in the last 3 years? That number makes homes held for investment in the millions. Until now the investors are buying NARs vision of 5-8% growth (flat growth?) this year… Would you want to wait till NAR changes its stance causing a mass exodus of investors from RE to greener pastures?
right now in New Jersey
according to the real estate
reports I have read, you could
take 30% off any list price and
be in the ballpark to make a deal,
that is, if the real estate agent
and the seller is not in denial.
And it could get worst.
You have to staying power in this market.
Buy Essex county , and Sell
Bergen.
Bergen could be finished except for
the high end.
09:25:26 anon
I was talking to couple of realtors this week; one of them told me that a 30% shave was possible. The other realtor was like "my boss thinks that the RE market will appreciate 5% this year...” For some reason the second realtor didn't refer to his boss while answering other questions :)
Shailesh, great chart.
The StarLedgers Business page has a primer on Housing Market futures.
I spoke with relatives that live in Mullica Hill in South Jersey, apparently there neighborhood (built in 2000) is full of foreclosures. Aparently the IO resets have hit hard down there. BTW I believe Philly and it's suburbs came late to the bubble.
the 30% shave could be even
higher, depends on the shape of
the property, and of course
the sellers need to get out of
dodge.
Many sellers homes are just not
worth the price, with the taxes,
the location (ie:the town)
Bergenfield,(please),
Summit,(get a life)
Montclair,(crime)
The tide is going out.
We are in the middle of the Season
and many homes are just sitting.
How about today, mnay open houses.
Lets see how many offers get done.
Here we go, a Greater Fool takes a $300,000 loss since buying last year:
320 Lupine Way, Short Hills
1) Jun 2005 - Bought for $1,300,000
2) Oct 2005 - Put on market @ $1,295,000 (MLS 2204767)
3) Dec 2005 - Listing withdrawn
4) Mar 2006 - Put on market @ $1,198,500 (MLS 2261656)
5) May 2006 - Price dropped to $999,850
6) Jun 2006 - Under Contract (June 12)
7) Jun 2006 - Closed $999,999 (June 15)
Add in two closing costs, and realtor commission, and it's essentially a $400,000 loss.
whoever he was he took a beating.
However, if he was in a hign tax
bracket. So What.
But it does show the volatility.
30% shaves,,,
Very Trendy, to go with Northern
New Jersey.
InvestorDavid said...
I think mid range houses in Bergen County are still selling. But high ends are sitting on the market for a very long time.
6/18/2006 10:10:35 AM
Based on what data? I doubt this. I don't believe that Bergen County is any different then the rest of the state.
"It doesn't sound like a flipper from the price of the house. Maybe he was transferred?"
I believe he was a doctor, not a corporate transfer.
Wouldn't matter much though, the market is the market, and the market has spoken.
You have shacks in Bergen County
on the market for $600k,$700k,
Tax on a 600K deal in Bergen ,,
What do you think 10-12K taxes.
I took a look at a few open
houses , would not even go in.
Even with a haircut, let someone
else take it.
NJGal, to beat your "to buy or not to buy" a new car question to death, I agree with what others (Richard and Grim Ghost) have suggested about the economic disadvantages of car-leasing. With a lease you always have a car payment; when you purchase you will have a lengthy period of time (5-years plus) where you will not. This assumes that you will keep the car for 8-10 years, which is reasonable.
Why not purchase the kind of car that you'll think you'll need in a few years--- a car you can grow into? Camry (the new redesign looks pretty good--much better than last generation's) or Accord? I know not the most exciting choices---but solid, comfortable, & reliable transportation that will last a decade or more with proper maintenance. And big enough for a family. Toyota has released a hybrid version of the Camry that's worth a look if you're in the market for a hybrid.
As far as more "exciting" upscale cars go, how many people understand that the Lexus ES330 is a Toyota Camry with "delusions of grandeur?" It's obvious when you compare the two side-by-side. Not so obvious the Acura TL and Honda Accord. They share the same platform and underpinnings but have differnt body styles and interiors--otherwise the cars are identical.
I make cars my hobby. :-)
RE: Screeech from Saved by the Bell:
It's sad and actually quite pathetic. Personally, I've never seen his show but friends of mine likened a waiter at a local restaurant in the city to Screech so I had to look at this website and they were so right!
Anyway, it looks like he's really gone off the deep end here. Not so much that he's gotten himself into financial hot water---lot's of Americans seem to have done that. But that he thinks of himself as such a famous and powerful celebrity that his efforts to discredit the financial guru who refused to help him will actually get anywhere.
This kind of thing happens too much when people come into a lot of money. Easy come, easy go.
This comment has been removed by a blog administrator.
Wall Streeter,
You may as well consider Chatham. My husband also works at Wall street (Goldman Sachs to be precise) and we just bought a great colonial in Chatham for under 1 million. It's a wonderful community and the schools are great! Taxes in Chatham are much better than in Summit or Short Hills, and you have the same access to NYC. Mid-town Direct takes you to Penn Station in 40 mins.
Harvard, what a joke!!!
Shaleish: Excellent chart.
Reinvestor101 -
"There's a lot of pent up demand out there for homes and buyers will eventually show up."
I always find it interesting when housing bulls make this claim. Considering even homebuilders are now admitting that recent high demand was artificially driven by investors and speculators, what information/statistics are you using to back this up?
Just got back from the beach - a lot of open houses along the shore - I sure wouldn't want to be the realtor stuck in one of those empty open houses on such a beautiful day!
There is nothing selling, but a lot more going on the market.
Back from the beach...boy did I hear the real estate stories this weekend around the pool.
You know what was interesting? That "Harvard Report 2006" mentioned the divorce rate as increasing demand for homes, which would help to keep prices stable. Yeah, right. I talked to a couple of recently separated guys. They're staying with friends/using relative's places, and commuting up the Parkway. No way are they buying. Can't afford it. So the big house goes to wife and no extra demand.
I think it was dump on real estate day instead of Father's Day.
And Metro, you are almost right about the Philadelphia market. The peak did come a little later than NNJ, but also was not as inflated in a lot of towns over here.
Inventory is sitting though.
Anon 12:40 is just one of hundreds who bought at/near the peak. If you planned to flip and make a profit during the last year, forget it - game's over. Hopefully your property is a good one and worth holding for 3-5 years when maybe you'll be able to get out near breakeven.
Reinvestor said, "A seller continuing to post and seek advice here will only be met with hoots of derision and attempts to take advantage of him or her."
The one thing I've noticed is that none of the regulars, or even Bob, has derided or attempted to take advantage of specific sellers who ask honest questions and tell their story.
Sellers posted on two threads this week, and got only sympathic comments about how the house sounds great and will sell and to hang in there. They're acting rationally and smart, if you think about it. Decent houses, reasonably priced...go find some fence-sitters on a bubble blog and tell them about your house!!!
I don't know ...you're pretty sensitive. Maybe you need some time away. Somewhere where you don't see anything written you disagree with. Maybe a gardening blog.
If I were selling right now, and I had an agent telling me one thing but I was seeing another, you better believe I'd be on line getting as many opinions as I could. At a minium, if someone told me something the agent didn't, I could do further research.
The cat's out of the bag. Real Estate Bubble is POPPING!
Prices are cascading!
Babababababa
BOOOOOOOOOOOYcott Houses!
Bob
Beware of greedy money grubbing sellers looking to off load their McMansion and INLFATED high fixed cost on you.
Taxes and utilities are going to crush you.
BOOOOOOOOOYcott Houses
Bob.
JUST SAY NO MAAS to High Ripoff home prices and monthly slave payments.
30% income or 4 times incomes MAYBEEEE!
Not this RIPOFF S@#$!. These Breedy Grubbing sellers want to retire off your demise! Big monthly slave payments for them to retire in comfort while you are a debt salve.
NO MAAS! NADA
BBABABABABBABABABA
BOOOOOOOOOOOOOOYcott Houses
Bob
Richie,
Thanks for the response. It's only been 10 days since my offer of 705, so they're definitely looking to sell now, but I'm fearful of pissing them off. It's actually a widowed grandma and I don't want to be a-hole. I know it's a lot of money to not try to get off the house, but my conscience tells me to not take advantage of an old lady. I wish I never met her and I'd have no problem.
I think the realtor and her son are driving the process by trying to lower the price and get me into a bidding war with someone else. She wanted to sell to me 10 days ago.
Thanks,
J
6/16/2006 03:16:00 PM
SCREW GRANNY. They will bleed you dry. She probably paid $20k for it 40 years ago.
Drop the bid PUSS!
Shailesh Gala said...
CF: Your comments on analysis would be appreciated.
6/18/2006 08:03:38 AM
Interesting stuff to ponder.
Two comments
1. The components of CPI include "Rental Equivalence", with a weighting of between 22% & 30%, so to some extent you have plotted the separation of the owners market from the rental market. You plot is consistent with our experience.
http://www.bls.gov/cpi/cpifact6.htm
2. It has been said that income should drive home prices and rents. It would also be interesting to see a third set of data on the same plot.
I've never experienced this 'Chatham as snotty' thing people have mentioned here a few times.
Perhaps I'm used to snotty people from working in NY City? There isn't a person in Chatham or elsewhere that could ruin my day.
Let's all stick to market facts here. This blog has become out of control in last couple weeks. Comments about how a town is socially perceived, how much money people make and what they do (i.e., whether someone works at Goldman or Morgan (yawn)), and the paranoid delusions about how a town's residents may look at you, are totally annoying and more importantly, not helpful at all. Please stop ruining this blog. Keep it on point. Cheers.
EMU
Bob's the one full of S@#$.
He'll always be on the sidelines, writing stupid, annoying comments. He, like several others that post here, will never buy anything. If he does finally get enough nerve and buys something, I wonder if he'll want to give it away at a price that's less then what his current market will bear as he reaches retirement age.
Anon 12:17am (i.e., whether someone works at Goldman or Morgan (yawn))
I couldn't agree more, who cares???
Fact: those in the know, know that the guys at the top are literally criminals, every one below is an empty suit...Wake up America The Big Wall Street Firms CREATE NO VALUE. They simply move money around and eat off of it in the process.
PS: As a twig grows, so shall the tree.
Read some history books folks, Goldman and Morgan have been huckster organizations forever, sooo the next time someone (with their chest out) says that's where they or their spouse works, say politely that your sorry to hear that and walk away.
Anon 12:34am re: Bob "He'll always be on the sidelines, writing stupid, annoying comments. He, like several others that post here, will never buy anything."
I don't know Bob, but I like him. I have owned a few properties; 2 homes and a small commercial bldg. I have written a check for $575,000 to purchase a house which I have since sold. I say this not to brag, but like I said, I like Bob and you know the saying "birds of a feather..." Just a guess but to me you sound like a small fish. Bob probably has a few dollars.
Anonymous 1:38 said...
"I don't know Bob, but I like him. I have owned a few properties; 2 homes and a small commercial bldg. I have written a check for $575,000 to purchase a house which I have since sold. I say this not to brag, but like I said, I like Bob and you know the saying "birds of a feather..." Just a guess but to me you sound like a small fish. Bob probably has a few dollars."
Small fish, big fish if either of you fill this blog with such trash you probably are full of "S@#$".
we have many bitter people on
this board. poor pricks.
Bob is a homeowner who paid a pittance vs the poor souls today who are getting ripped off by a bunch of self serving industry people and money grubbing retirees and boomers who think they are entitled to huge windfall at someone else's expense.
Some of us homeowners do not depend on ripping off younger buyers to finance our retirement in the future.
Prices are way unfair and need to come down 30-35% to get them just back to fair not even underpriced!
Bababababababa
BOOOOOOOOOYcott Houses!
Bob
EMU, have a look at the title of this thread.
To: JM, 6/17
RE: www.interactivebrokers.com
I use Scottrade, but was also trying to find an Aussie outfit, so thanks for the link there.
Looks like they have a sales office in Greenwich.
I have no references for interactivebrokers, but a couple of days ago, a guy called G'wich Gus was on here during the discussion of the Harvard Housing 2006 release. Based on the price he mentioned he paid for his home, I think he's not far from their office.
You could really go give him a shout to see if he knows anything.
Pat
UNREALTOR: Just a request. Try not to take it personally (whoops, you did). Facts and figures are so much more persuasive than social commentary. Cheers.
EMU
Off-topic:
Wouldn't an EMU know more about Aussie's?
Yeah, good catch - especially an EMU in caps.
Just my 50 cents worth.
"UNREALTOR: Just a request. Try not to take it personally (whoops, you did)."
Not at all. By the way, in case you missed it -- thread title: "Weekend Open Discussion ... As always, anything goes!"
If you don't like engaging in "open discussion" you'll probably be happier reading one of the other threads.
UNREALTOR:
I saw the thread title, and I think YOU are the one that missed the point. Keep up the boring and bitter postings for all I care. They are very telling. Have a super day, and try to keep that blood pressure low, for your own sake.
And I look forward to seeing myself quoted in your response e-mail. So darn clever :P
Kisses and hugs....
EMU
EMU:
Why so bitter? Why not start the "EMU Blog" so you can dictate to all how to conduct an "open discussion"?
Note also -- this is not e-mail.
reinvertor 101:
It's not that I'm new to this blog,and I'm surely not "bullish" on NJ RE by any means, I just don't usually comment here.
It's just that Bob's multiple comments, and some of the others that are gloating over the current decline become very annoying. No matter what they say, I still think they'd be sending a much different message if they were faced with selling for anything less then a market could bring.
Anon 12:20am "if they were faced with selling for anything less then a market could bring."
This statement by you, proves my point that you are either a small fish who really has no clue about money and markets or a recreational drug user.
Reinvestor101 -
I love it and am very proud that you put me in the "worst offender" group.
Really. It means I'm doing my job as an American taxpayer.
You may thank us someday if the bail-out bill is only a few billion versus the latest predictions I'm reading.
Just think.
Every time I'm offensive to you, I might be helping an uninformed schmuck turn away from a bad loan.
I don't WANT to play the push-taxes-forward on my child game. Dunno about you.
Pat
Is it still the weekend? Lets close this discussion and rant on a more current post.
Hi, Reinvestor - Did you want one last word on the thread before giving us marching orders?
Pat
I think I'll post here cause I love annoying people who order other people around!
Pat
In fact, I especially love to annoy posters who don't sign their name when giving other people orders.
Pat
UNREALTOR:
You still do not get it. There appears to be a comprehension problem on your end. I am thinking you may be a product of the public school system (my condolences). Best of luck to you.
EMU
Reinvest101:
I know what you're saying. Anyone who has expressed anything about this stupid "giddy" behavior is met with criticism and accused of being "Greedy".
I'll never believe that these people wouldn't want to sell at a price that's at the top of a market to maximize their equity.
That's far from greedy; it's just smart/lucky timing.
All,
I turned down their acceptance of my 705 offer. Now they've reduced the listing to 699.
Regards,
J
J -
Good luck, and please let us know if you end up getting your home!
Pat
I am interested in Waldwick, NJ in Bergen County. Not sure of the school systems and property taxes. If anyone has any info on Waldwick (good or bad), I would appreciate it. There seems to be the potential for some affordable houses (small ranches or capes which is fine with me). At the moment they are listed in the $400- $450 ranges. Maybe next year they will be $350. Waldwick also has a train station which is appealing to me as I commute into Penn Station. Thanks in advance!
Waldwick is a nice town, but there are others in northern Bergen County just as appealing. Westwood is closer to the city, has a train station (Pascack Valley line), a large supply of moderately priced Capes (400-500K), and a vibrant central business district with restaurants, a movie theater, and loads of shopping. The schools are as good as Waldwick, and the taxes are reasonable, relatively speaking.
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