Thursday, July 20, 2006

Going To Get Worse Before It Gets Better

From the Record:

Consumer prices spike in region
By KEVIN G. DeMARRAIS

Consumer prices have soared 5.6 percent in the metropolitan area in the past year, the biggest 12-month gain in 15 years.
...
The Bureau of Labor Statistics reported Wednesday that the Consumer Price Index for the North Jersey-New York region rose 0.5 percent in June due to sharp increases in housing, food and utility costs.

Even discounting the often-volatile food and energy sectors, the region's core rate of inflation is up 4.6 percent since June 2005.

By comparison, the national CPI rose just 0.2 percent in June. That is the smallest increase in four months, resulting from a temporary dip in energy prices.
...
Higher interest rates may have taken the steam out of the home-buying market, but that has put additional pressure on the rental market, especially high-end properties that consumers had been buying in the past, Kohli said.
...
"I think it's going to get worse before it gets better, I really do," he [Naroff] said. "I sense that we still have some issues that have to be dealt with, especially with energy prices remaining so strong, that the pressure to recoup some of those costs is going to be a real problem."

18 Comments:

Anonymous Anonymous said...

Get worse?????????

According to slick realtors we are in a normalized market.

This stuff should be scrutinized by the AG of US. The spin and manipulation is just unethical!

Wave 1 of the Tsunami has hit wait til wave 3 and 4.

Babababba

Bust!

Bid 30% less off of "Peak 2005" prices.

Don't get stiffed by a slick realtor or greedy money grubbing seller trying to stick you with an overpriced house.

Don't be a bagholder.

If you have good finances and made the sacrifice to save a 20% down payment YOU ARE IN THE DRIVER SEAT. DO NOT LET ONE OF THESE SLICK GRUBBERS TRY TO STICK YOU WITH A DEFLATING HOME.

Babababbaa

BOOOOOOOOOOOOycott houses!

7/20/2006 08:35:00 AM  
Anonymous Anonymous said...

Bababbaba

Bob

7/20/2006 08:36:00 AM  
Anonymous Anonymous said...

Escalating utility cost,Property taxes , Gasline Insurance and readjusting ARMs putting big strain on FOOLS budgets.

SHOW & TELL SOCIETY GOING TO PAY FOR THEIR RECKLESS FINANCIALS.

BABABABABA BID AT LEAST 25-30% LESS ON PEAK 2005 PRICES. WATCH THE GREEDY MONEY GRUBBERS JACKING OFF PEAK 2005 PRICES EVENTHOUGH MTG RATES ARE UP 25-30% LAST YEAR OR SO.

No GIVE NO NOOOOTT""""ING!

Bob

7/20/2006 08:44:00 AM  
Blogger Richard said...

i'm seeing more properties fall out of contract after going Pending status. i've seen 3 in summit in the last week alone. these are at the starter level (up to $650k). i'd like to know precisely why but i have my opinions.

i'm also noticing when going out more houses are vacant. sellers are still being quite stubborn with their higher than the market will bear asking prices. i wonder how they'll feel when the properties languish another 4-6 months with a double mortgage. keep an eye on these boys, you should get a better deal if you have patience.

7/20/2006 09:11:00 AM  
Anonymous UnRealtor said...

"i'm seeing more properties fall out of contract after going Pending status. i've seen 3 in summit in the last week alone. these are at the starter level (up to $650k). i'd like to know precisely why but i have my opinions."


Seeing this a bunch as well. Some after being "Under Contract" for up to two months.

Once appreciation leaves the equation, it's no longer a viable option for "buyers" to use exotic loans hoping to stay 1-2 years and then resell at a profit.

Now, they'll sell at a loss in 1-2 years. This no doubt removes a sizable portion of buyers from the market.

No appreciation = fewer buyers.

Higher interest rates = fewer buyers.

Median home prices @ 10 median income = fewer home buyers.

Speculators exiting market = fewer buyers.

Buying now would be a serious mistake for anyone who isn't truly wealthy (net worth in millions) and can't absorb a considerable loss.

The last Greater Fools we're seeing jump ship from "Under Contract," woke up just in time not to get burned (assuming they didn't lose their deposits).

7/20/2006 09:39:00 AM  
Blogger skep-tic said...

I feel like we've reached the breaking point.

We'll be in August in less than two weeks and I think realtors are finally starting to get the message.

There's a realtor on the Westchester blog who is predicting 20% YoY price drops.

Ads on craigslist are sounding increasingly desperate. Agents want offers --- any offers at all -- and they're not getting them.

Everyone is claiming they offer "value." They don't, but the important thing is that it is generally acknowledgedthat this is what people are looking for.

People are claiming value relative to other properties for sale in their town. There is fear and outright competition between sellers for the first time in a long time.

This thing is going to bust wide open in August. More and more people are starting to be afraid of what might happen in the fall with this much inventory, a slowing economy and rising rates.

Bob is sounding smarter and smarter all the time.

7/20/2006 09:42:00 AM  
Blogger BergenBuyer said...

I recently heard of two homes under contract and a week or two before the closing, the buyers backed out. One claimed he couldn't qualify for the loan, not sure if the lack of qaulifying is true or not. The seller is suing. This is a friend of a friend, but she is a realtor and was selling her own house. She said it was the first time in her 25 years that's ever happened. She couldn't believe it happened to both her home and one of her listings within 2 weeks.

I've noticed some homes dropped by 20% and still nothing. I'm assuming at some point people have to sell and will drop their price. The question is when???

7/20/2006 09:45:00 AM  
Anonymous Anonymous said...

IF YOU ARE A BUYERE THAT HAS SACRIFICED AND AM NOT ONE OF THOSE SHOW & TELL TYPES THEN YOU ARE IN THE DRIVER SEAT!

DO NOT LET ANY SLICK REALTOR OR GRUBBING SELLER SAY OTHERWISE.

YOU VALUE YOUR MONEY AND YOUR EFFORT. NOT LIKE THE FOOLS THAT BOUGHT THE LAST 2 YEARS WITH RICKY GIMMICKY LOANS. I DON'T GIVE A DAMN ABOUT THEIR DIRE CIRCUMSTANCES. THYE CONTRIBUTED TO THESE INSANE PRICES AND DESERVE WHAT EVER IS HEADING THEIR WAY!

NO BIDS NOO NOTTTT'ING UNLESS 25-35% BELOW PEK 2005 PRICES.

NOOOOTTTT'''ING ELSE!

Bob

7/20/2006 10:39:00 AM  
Anonymous Anonymous said...

Grubbing greedy sellers misery climbing!

Get back to work and save more to retire. Don't stick a buyer with your bloated overpriced house!

NO MAAS to Ripoff prices!

8-10 times incomes is a ripoff when these grubbers paid 2-3 times maybe 4 at most!

NO NOOOOTTTT"""ING!

BOOOOOOOOOOOOYcott

Bob

7/20/2006 10:43:00 AM  
Anonymous Anonymous said...

Okay, check this out:

http://centraljerseyposhouse.blogspot.com/2006/02/back-to-beach-long-beach-island.html

The house on top, the 1 br cabin in Ship Bottom, was listed for $399k in February. It's now languishing at $324k. That's, what, approx 20% reduction? Motivated seller? Bad market?

I leave it up to Bernanke to decide.

7/20/2006 11:11:00 AM  
Anonymous Anonymous said...

Richard,

You seem to have an real time idea of what is going on. What happened to the house at the end of Summit ave next to Rt24. I still see it listed 1.5 mil, but I thought they were going to sell to the best reasonable offer (999K)at the end of June?

Did no one bite at at all?

7/20/2006 11:21:00 AM  
Anonymous UnRealtor said...

"What happened to the house at the end of Summit ave next to Rt24."


I guess that firesale didn't go well? They posted plywood signs with spray paint up on Route 24 saying "Auction today, best reasonable offer."

7/20/2006 12:31:00 PM  
Blogger njresident286 said...

There is also this house in summit
http://www.houseforsalesummit.com/

which I have been following. This guy seems pretty desperate to sell. If I remember correctly, i think it was originally 599k. I could be off on that, but it is now 480. I think if someone went there and offered between 440 and 450 he would sell. He keeps lowering the price on the website he runs.

7/20/2006 01:23:00 PM  
Blogger njresident286 said...

I think the stubborn sellers just need time to concede. They will sit and pay a double mortage for a while, especially if they have owned the house for a while they mortgage is probably fairly low. It is the taxes that are biting them in the ass in places like summit. I think after a few months of no sale and few people looking, they will change their tunes and decide to lower prices. But by then, the newer houses coming onto the market will be even lower, making it harder for them to sell. The people who live on comps in a market like this when prices go down will be the last ones to sell.
If i had to sell a house right now, I would find the last house near me that sold, and price mine 30k lower. It would be snapped up in a second.

7/20/2006 01:26:00 PM  
Anonymous Anonymous said...

I think
http://www.houseforsalesummit.com/

is one of those sellers that keeps lowering the price a little too late and not enough.

Its been lowered in 5K increments a couple of times....

big deal....

no more than 400K in this market...its nice its on the park, but really not that great of a house....

7/20/2006 03:11:00 PM  
Anonymous Anonymous said...

About the http://www.houseforsalesummit.com

Not a bad house, but for 480k in this market, I agree, still too high. So much inventory and some sellers shaking in their boots, you can sweat this guy out. If some else comes along and picks it up....ehhh...big deal....least you were not the sucker and that buyer will be upside down in a years time....ouch....not alot of fun.

SAS

7/20/2006 06:36:00 PM  
Anonymous Anonymous said...

While we are talking about Summit, I drove by this house today...
(think I did anyways)

This off Century 21 website
MLS# 2281843
3 bedroom, 2 bathroom house in Summit.

This idiot is asking $689,900.
If its the house I drove by today, its on a busy intersection, the god damn cars that pass by are literally in your front yard.
We are talking many cars...at high rates of speed....

This seller is toally in la la land with that price, you would have to almost give me that house for free before I would buy it.

What a joke.

SAS

7/20/2006 06:57:00 PM  
Anonymous UnRealtor said...

SAS, that house sure looks like a real POS.

It says "$140K in upstate NY" and not "$700K in Summit."

7/20/2006 07:08:00 PM  

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