The decline is just beginning
From The New York Sun:
Real Estate Recession Coming
Real Estate Recession Coming
Some realtors and economists now argue that the decline in home prices will be modest and is nearly complete.
They are very likely to be mistaken. This decline is just beginning and will become more severe because of a recession that will be triggered by the falling home prices. This in turn will lead to a surge in unemployment and many of the newly-unemployed will no longer be able to afford their homes.
The first factor that led to the unprecedented surge in home prices of more than 50% in the last five years is that the Federal Reserve began to pursue an extremely easy money policy in 2001 to buffer the economy from the implosion of the stock price bubble of the late 1990s.
...
The second factor that drove home prices upward has been the creativity of the lenders in developing new forms of credit. Financial firms became much more creative in designing mortgages that reduced the monthly payment of the borrowers and thus enabled them to buy more expensive properties. More borrowers opted for adjustable interest rate mortgages, or ARMS. Some provided only for interest payments for five or ten years. A recent innovation was the negative amortization mortgage, sometimes called the option ARM. The interest payment that the borrowers made for three or five years was less than the amount required based on the interest rate, and the borrowers' indebtedness increased.
...
The decline in spending that will follow from the combination of the sharp decline in new home construction and the much smaller borrowing against lower home values will lead to a sharp increase in the unemployment rate. Foreclosures and price drops will follow.
The decline in household wealth that will follow from lower home prices is likely to be comparable to the decline in 2000, 2001, and 2002 that followed from the lower stock prices. Moreover the sharp slowdown in the rate of economic growth is not good news for corporate profits.
...
The New York area will be sharply affected both by the decline in home prices and in stock prices. Homes in the metropolitan area will remain more costly than in most other parts of the country, but they will become much more affordable than they now.
82 Comments:
From Marketwatch:
KB Home CFO says housing facing Supply/demand imbalance
Chief Financial Officer Dom Cecere said the U.S. housing market is facing an imbalance between supply and demand, and that pricing pressure will continue just like in any other industry until it evens out. He said Tuesday the market needs to work its way through "the speculative inventory being dumped on the market" before home prices stabilize. KB Home is scaling back its land position to "reflect the realities of the market,"
On the economic front, also from Marketwatch:
U.S. trade gap widens to record $68.0 bln in July
The U.S. trade deficit widened by 5.0% in July to a record $68.0 billion, the Commerce Department said Tuesday. The July deficit surpasses the previous monthly record of $66.3 billion set in January. The trade deficit was above the consensus forecast of Wall Street economists of a deficit of $65.4 billion. The deficit was $64.8 billion in June. Imports rose while exports declined in July. The U.S. trade deficit with China widened to $19.6 billion in compared with $17.6 bln in the same month last year.
I see a lot of people in the various postings deluding themselves because they seem to hang on to arugments like the mortgage rates are currently low and they give some couter arguments about a temporary correction or soft landing while insisting that the economy is healthy.
The few points that everybody must consider has to be the fundementals, as they are out of whack and definitely the economy is not as rosy as some may think.
Think about these factors carefully.
1. How much of the overall income rose because of these factors
(a) The construction madness going on with the bubble. What happens when there are layoffs due to developers pulling back (aleady happening)
(b). What happens when all the inflated profits disappear with prices tanking? It wipes out values thought to have been realized across the board in billions now inflated and loss of jobs due to it is not factored in yet.
(c) The war machine: heavy spending on the war has supported so may jobs. Will this last forever? Iraq, and the middle east?A lot of our exports and spending are due to the exporting of arms and equipment for this warmachine which supports a lot of employment. Hopefully this will be temporary because we dont want war but unemployment will be affected if this stops.
2. Don't forget we have surpassed 9 trillion in National Debt and we are in quicksand regarding our ability to work that off. The figures do not look better, they look worse and that deficit is widening by the hour There is no sign of narrowing that deficit.
3 Don't lose sight of the fact that we are in an election year and all kinds of artificial methods are being used to induce positive results. The interest rates are also kept artificially low due to this being an election year. It appears that gas prices are going to go down a bit to delude people that the administration is doing its job in exchange for votes as well.What happens after the elections?
The fact remains that the fundementals are way out of line and even our currency value is artificially kept high in comparision to what it should be, and those who do not take this writing on the wall to hedge now will pay a high price later.
This could have all been prevented if, NOW after the fact and with all the damage in place they warn.
All those who still have arm loans on mortgages should quickly adjust to 30 year fixed now while there is a good chance because the interest rates are artificially kept low due to election year and other reasons. The interest rates will not remain this low so lock in that mortgage you now have to a 30 year fixed to avoid getting caught later when the interest rates start to go up.
Secondly, there are all kinds of artificial support for the stock market to stay where it is now and again partly because its election year.For all those having investments in the stock market, the ideal thing to do would be to get out now while there is support levels for you to do so as it does not look like a rosy future for the stock market towards spring 2007. Get out while you can, now and take advantage of the fact that it is held up artificially for you to bail out .
Anonymous said...
"All those who still have arm loans on mortgages should quickly adjust to 30 year fixed now"
I agree 100%, in a real world. However this in unreal. Many homeowners that took out these arms, I/O's are under water. Suppose they bought a house in the last 2-3 years for 500k. Between the present appraisal and their neg amor., the bank may qualify for a 400k loan. Do they come to closing with 100K???? Sometimes I get tired of saying the same thing, they are trapped, nowhere to run, nowhere to hide.
I agree with what you say about stocks.
BC Bob
grim said...
On the economic front, also from Marketwatch:
U.S. trade gap widens to record $68.0 bln in July
Our appetite is still there to consume. Is the only solution to our trade deficit a severe recession?? Is there any reason to hold US Dollars with reports like this???
BC Bob
to avoid getting caught later when the interest rates start to go up.
In the deep, prolonged recession you are all predicting?
Did anyone take Econ 101 here?
Richard -
I don't agree with you at all.
I think the pattern we'll see on the way down will be the same as it was on the way up.
In 2001/2 quite a few people held off buying, seeing the run up in prices, it was assumed that there was a bubble and that things would slow down, Interest rates went down, real estate became the hot new thing and the price inflation began to feed off of itself. There were people who bought in 2005 because they finally gave up waiting, the rise seemed to go on forever and they decided to throw their hats into the ring.
Why shouldn't we see the same thing on the way down? Inventories are rising, how many people thought to sell this year but decided to hold off on the "promise" that this would be short term and that things will pick up next year? How many people are beginning to suffer from toxic mortgages? How many people are going to hold off selling next year if things still look slow? How many will suddenly put there houses on the market at the first sign of a dead cat bounce caused by speculators assuming we hit bottom? In five years time, how many people are going to give up, assume that there is no bottom, that "things are different this time" and just put their house up for sale in order to get rid of the albatross hanging round their necks?
Just look at the pattern of the past few years, driven by psychology and a pick up in the economy caused by low interest rates and housing.
Now reverse it.
The below is not opinion;
Stop trying to speculate on what % the decline/time frame will be. I don't know, nobody knows.
Simply look at it this way. What makes prices rise in any market?? Money/sponsorship is what makes prices rise. Money must be flowing into the housing market for prices to rise. In reality, nothing else matters; not opinion, not location/proximity, not schools, not migration and not under valuation. For $ to flow into housing either a buyer has to have cash or apply for a mortgage. Someone has to want to depart from their cash or want to take on a loan.
The MBA’s seasonally adjusted purchase mortgage index is at approx 375, its lowest since November 2003.
The purchase index, which is considered a timely gauge of U.S. home sales, is standing well below its year-ago level of 470.6, a drop of 20.1 percent. Take a look at a chart of this, mortgage purchase (not re-fi) app's have broken through their previous lows.
Simply put,less and less money is flowing into this market. Now an opinion, based on the above housing prices are going lower than most people can care to imagine.
BC Bob
What decline? I could list my house tomorrow for ten times what I paid for it in 1998.
(I would be laughed out of the county, but hey, it's a free country.)
-Jamey
Goldman came out solid again - very good. Regardless of any spinning, the main issue is that 2006 is 3/4 over, and profits have been in record territory on a cumulative basis. Some nice checks are going to be distributed around here in about 3-5 months.
It is a good near term boost for demand. Recall, there is not going to be a lot of breadth in the demand [huges scads of money distributed to a small population]. But it does speak well for the other banks, money managers, and the lawyers and consultants who serve them.
Many of these people have already purchased recently. However, at a minimum there will be some trickle down, which has to cushion some of the blow that this area in going to receive over the next few months.
Chi.,
Yeah, there is a great amount of cash that will be distributed. However, it doesn't necessarily mean it will find its way into RE at this time. Many of these individuals, receiving big bonuses,know better than anyone about over-valued/under-valued. Talk to anyone in MBS, they'll tell you to run the other way. If it does provide somewhat of a cushion it may just be a dead cat bounce.
BC Bob
how many people are going to give up, assume that there is no bottom, that "things are different this time" and just put their house up for sale in order to get rid of the albatross hanging round their necks?
Over and over, folks on this board forget that people need places to live.
While you can abandon all financial markets and put your money under your mattress, you still have to have a place to live.
People may not be buying, but rents are soaring in response to increased demand.
Sorry, but no matter how you delude yourself, you cannot sit this one out on the sidelines unless you decide to go live under a bridge abutment somewhere.
You'll pay, one way or another.
Bergs:
I agree. However, you forget that a lethal combination of hubris, and a fundamental lack of time to focus, can create huge errors in judgement.
I have people who really don't need me, yet retain me with the instructions, look at everything, question everything, don't let me do anything stupid.
Some nice checks are going to be distributed around here in about 3-5 months.
Absolutely. And those folks who receive them are not going to be staying in their cramped, cheap apartments any longer than they have to.
Some will buy in the top locations in the top towns. Others will rent bigger and better places, and drive those prices up.
Some of the money will be invested...and some will go to enhancing lifestyle, because Wall Streeters are all about lifestyle. Always have been, always will be.
What's the point of being a Master of the Universe if you have to ride the elevator each morning with mere mortals?
"Some of the money will be invested...and some will go to enhancing lifestyle, because Wall Streeters are all about lifestyle. Always have been, always will be."
Don't include me here. I don't need to buy a $300 bottle of grey goose to lead a fulfilling life.
BC Bob
Does anyone here live in the Pequannock / Pompton Plains area in Morris County? Just looking for others perspective in this area. I see a lot of homes for sale.
BOSTON (MarketWatch) --
11:17am 09/12/2006
Chief Executive Robert Toll said the U.S. housing market got ahead of itself due to greed on the part of buyers and sellers, and that it now likely faces the highest level of speculative inventory ever. Toll said the current downturn is unique in his experience because it wasn't driven by a "macro-event" although interest rates have risen steadily. "Every day there's an article about how lousy housing is now and how dumb you have to be to buy a house now," the CEO said Tuesday at the Credit Suisse Homebuilders Symposium. "I don't know what it will take to turn this market -- it could take two years, or it could take someone getting quoted in the New York Times saying the market has hit bottom."
BC Bob
"What a jack-ss. You can always rent. No one is suggesting homelessness as a choice."
NJGAL,
Love it, lol!!!!
Quick analysis, last years rent total, 1,500 per mo. Buying a 500k house with 20% down, approx 3,500 mo(PIT). Not to mention, the 100k dp is growing outside of RE.
BC Bob
How is the decline beginning?? I check Craigslist, and still see absolute crap with sky high prices.
Rentals are even worse. In the outer boros, real estate agents want 15% of a years rent for a $1,600 one bedroom apartment that is a dump.
Condos are still priced at near $400,000 in the worst parts of Jersey City near the Bayonne border and closer to $800,000 with $8,000 in annual taxes near the waterfront.
12:00, or 11:10 ["People may not be buying, but rents are soaring in response to increased demand."]
Can you provide the soaring information?...I'm not so sure from what I'm seeing on Craigslist. I'm seeing places near the Path or in bedroom commuties for 2k or less up there. Is this higher than last year's rents? Just curious. Based on what some posters say here, you can't get anything like this. Looks really easy to me, but then again, maybe these places rented for only $1000 last year and I just can't know that.
http://newjersey.craigslist.org
/apa/206187983.html
http://newjersey.craigslist.org/apa/206028921.html
http://newjersey.craigslist.org/apa/205844640.html
http://newjersey.craigslist.org/apa/205945467.html
http://newjersey.craigslist.org/apa/205800544.html
http://newjersey.craigslist.org/apa/205808482.html
Rents are not soaring AT ALL where I live (SE PA) - not even keeping up with inflation. There are a ton of places for rent. We have our pick of granite colors if we want to move right now to rent something more modern. My rent in the last four years is up an average of $32 a year. Not even at inflation rate.
Maybe you are talking about some other area.
Pat
"How is the decline beginning?? I check Craigslist, and still see absolute crap with sky high prices"
It's all how you see it. I look at the same and see a ton of speculative inventory.
BC Bob
bob, absolutely right. the ppl trying to rent out are those that are trying to cover their mortgages and stuff thru rent. what they dont realize is that for the prcie they are trying to rent, they shd provide super as well for 24/7 support
We can't speak about the market on the whole, because it's just so different everywhere.
Can you even look at rents and prices in Hoboken considering that 10 years ago it was an entirely different city?
Hell, Edgewater as it is now didn't even exist back then.
You really need to be nose-down in the MLS systems every day to have perspective on what is going on in these markets.
Craigslist, Zillow, or looking at actives on Realtor.com (etc) is only a partial view of the market.
grim
> Quick analysis, last years rent
> total, 1,500 per mo. Buying a
> 500k house with 20% down, approx
> 3,500 mo(PIT). Not to mention,
> the 100k dp is growing outside
> of RE.
But you can't rent a 500k property for $1,500/month.
And as for the Wall St. money, they had a record year - where was the big run up after the bonuses from 2005? There wasn't one.
9/12/2006 11:41:35 AM
certain areas and properties have hung in there
there are a select few people that are price insensitive
there is still volume out there
demand has gone down, but it isn't as bad as it could be - it is more of a supply issue and price
if the economy wasn't solid in the NYC area, RE would be far worse
I am saying flat out - it isn't that bad - it could be so much worse - that is the main reason that prices haven't cratered yet
recession = carnage
Rents ARE soaring. And the requirements to rent an apartment are more stringent than getting a mortgage to buy that same place.
We are talking about the NYC metro area which includes Long Island and North / Central Jersey but not PA or NY State north or west of the catskills which is a different mentality in real estate.
The ideal tenant who is looking to rent an apartment in the NYC region has no credit card debt, a 750+ FICO score, earns 45 times the monthly rent and can provide 4 paystubs, 2 w-2's, SS Card, Drivers License, a guarantor in case it is 'only one person', and can pay 15% of the annual rent.
And in a landlords market like today they will get the above person plus someone who can spend $2,000 a month or more on rent.
Best incentive yet..
http://newjersey.craigslist.org/rfs/206288721.html
$975000 NJ Corn & Tomatoes to all visitors-Open House Sunday 1-4 Sept 17th
All visitors will receive complimentary New Jersey corn and tomatoes.
"But you can't rent a 500k property for $1,500/month."
9/12/2006 12:39:30 PM
However, my 2 bedroom apt is a lot nicer that the 500k POS's that we viewed. Not to mention the additional 100-150k needed to bring it up to date. I also don't risk losing my 100k dp if the market drops 20%. I try to place my $ in appreciating markets, not speculative, bloated inventory, sinking markets.
BC Bob
too funny... i don't know why some people feel so compelled to bring out the argument of wall street bonus will save real estate... didn't we just go thru this? and wasn't it just proved to be another incorrect myth?... for those of who don't remember or can't... here's a recap... goldman and other firms' payout for wall street bonus money this past year hit an all-time record high... and real estate went thru a weak, silent selling spring season.
from Goldman
Home Price Inflation Coming Back to Earth
The continued gains in home prices probably overstate the strength of the housing market, for at least four reasons.
1. Exclusion of condominiums. The OFHEO index is for single-family homes only; the condo market appears to be under more price pressure. Specifically, inventory/sales ratios for condominiums (the number of condos for sale, expressed in terms of the
recent sales rate) have risen to 8.2 months’ worth of sales versus 7.3 months’ for single-family homes. The divergence occurred
recently as through the first half of 2005 these ratios were at similar, though much lower, levels for both types of housing.
2. Inclusion of refinancing transactions. The data used to construct the OFHEO index includes refinancings on the same home. Refinancings that involve a reappraisal of the home’s value can contribute to measured home price appreciation, and indeed have done so over the past two years. Using only actual purchase transaction data subtracts almost two percentage points from measured home price inflation over the past year.
3. Nominal rather than real home prices. The OFHEO figures show nominal home price inflation has slowed. But the deceleration is sharper when one considers home prices relative to consumer prices more generally. “Real” home price
inflation home prices relative to the Consumer Price Index excluding shelter costs fell slightly in Q2, the first quarter-on-quarter decline since 1996.
4. Other measures much weaker. The National Association of Realtors (NAR) also surveys the median price of existing home sales. For the reasons detailed above, we generally prefer the OFHEO figures. Generally preferring, though, doesn’t mean completely ignoring everything else. With the quarterly NAR number running at 3.5%, the current gap between the two of 6.5% is the biggest year-on-year gap ever between the surveys. Combined with all the other measures of housing market weakness-- rising inventories, increased time on the market, additional seller’s incentives and a further drop in the NAR index beyond the end of the quarter pulling the year-on-year change down to 1.5%—-leads us to further doubt that the year-on-year growth is still running at over 10%.
Richard;
How about the people that are trapped??? Isn't that about financials?? This is the biggest financial decision that people will make in a lifetime. Isn't that about financials?? I have owned properties for 20 years, I don't need a house to live in a place that I call home/settled in. I live in the same community where I owned. Same friends, same restaurants,same activities, same job, same church,etc... There is nothing different on my end, except I am not renting mortgage $, I am renting a place to live. I spend my weeknds now with leisure activities, not in Home Depot. When the time is right, I will own again, just not at 2005 prices. On the other hand, I have no problem what somebody else decides to do.
BC Bob
Anonymous said...
.. here's a recap... goldman and other firms' payout for wall street bonus money this past year hit an all-time record high... and real estate went thru a weak, silent selling spring season.
9/12/2006 01:28:46 PM
Not true. There was a spike in activity from late December to February, which had closings from January to April. The data was stronger than you have expected. However, as noted, it was a thin swath of the market in selected areas and selected properties.
The OFHEO numbers are based on conforming mortgages purchased by Freddie or Fannie.
jb
"Not true. There was a spike in activity from late December to February, which had closings from January to April. The data was stronger than you have expected. However, as noted, it was a thin swath of the market in selected areas and selected properties."
Just fyi... there's always a spike in activity during those months... the spike that you're indicating actually ran between the previous NJ sales levels in of 2003 and 2004... also... the entire myth about wall street bonus money is that it drives the entire market, not just a "thin swath of the market"...
Not sure if posted previously, but here is a Bloomberg interview of Princeton Economist/NY Times columnist Paul Krugman on housing (5 min.). He calls the current market "scary".
Paul Krugman on Housing Video
What a jack-ss. You can always rent. No one is suggesting homelessness as a choice.
You missed my point, and there's no need for name-calling. You can buy, or you can pay an inflated, and ever-rising, rent. There's no other way.
"Anonymous said...
Over and over, folks on this board forget that people need places to live.
While you can abandon all financial markets and put your money under your mattress, you still have to have a place to live."
OK, let me say this really slowly.
You do not NEED to own the place you live in.
You do not NEED to own a second home.
You do not NEED to own an "investment property".
Second NJGAL on the jack*ss quote.
If someone wants to go ahead and put together a list of towns that form this "swath", I'll be glad to do the digging and put together some data/graphs. To keep me sane, can we keep it confined to a single MLS system, preferrably GSMLS (exclude Hudson).
grim
And as for the Wall St. money, they had a record year - where was the big run up after the bonuses from 2005? There wasn't one.
You haven't seen what housing prices have done this year in Greenwich CT.
Yes, the market is softer here, but 11 $3 million+ houses went to contract in town just last week.
Your experience in Clifton NJ may vary.
You missed my point, and there's no need for name-calling. You can buy, or you can pay an inflated, and ever-rising, rent. There's no other way.
Except that taxes have been rising much faster than rents lately and we can't discount the possibility of rising maintenance fees (where applicable).
grim
Rents are not soaring AT ALL where I live (SE PA)
Maybe you are talking about some other area.
Sorry...I wasn't talking about SE PA, and I don't think most of us here are.
I'm sure I can find cheap rent in Dutchess County NY, too, but so what?
Is there a glut of housing--both for sale and for rent--in the NY metro area?
Are there more housing units available overall than there are people/family units to occupy them?
wall street type towns like summit, chatham and westfield did quite well. look into the numbers my friend, not just at aggregates.
The question has been asked on this board before:
Does anyone actually think that Hamptons waterfront and Park Ave. duplexes will actually decline in value to the same extent as the little '60s cape in Clifton--or to any extent, for that matter??
if you choose to live in this area you're going to get squeezed either way.
That was my point, but I guess I was too suble...for which I got called a jack-ss.
Interesting group here..quite brittle and testy for some reason.
I rent a 1250 sqf apt with 2 bdrs, 1.5 bath, new kitchen, C/AC and 2 floors in downtown Red Bank for 1.6K a month. A friend of mine rents a 2 story HOME, year round, three blocks from the Ocean in SEA GIRT for 2k a month. How much do you think that house in Sea Girt sells for? 1.5 mil? The list price for my Red Bank apt was 1.8k last spring. The owner took 1.6k.
I rent a 1250 sqf apt with 2 bdrs, 1.5 bath, new kitchen, C/AC and 2 floors in downtown Red Bank for 1.6K a month. A friend of mine rents a 2 story HOME, year round, three blocks from the Ocean in SEA GIRT for 2k a month. How much do you think that house in Sea Girt sells for? 1.5 mil? The list price for my Red Bank apt was 1.8k last spring. The owner took 1.6k.
grim: Rumson, Fair Haven, Colts Neck, Wyckoff, Franklin Lakes, Ridgewood, Short Hills, Millburn, Maplewood, Bernards, Mendham, Alpine, Tenafly, Englewood Cliffs and the others noted.
Look at property in the $1M+ range.
To be clear - people are not buying now.
They bought at the beginning of the year. They may buy again in 3-5 months.
Just in case someone haven't seen these:
D.R. Horton CEO sees U.S. home market firming in '08 - at Reuters:
http://biz.yahoo.com/seekingalpha/060912/16747_id.html?.v=1
D.R. Horton CEO says 2007 will be worse than 2006 - at MarketWatch:
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b2EF984F1-3820-45DE-96D7-4DACED5CD6FA%7d&siteid=yhoo&dist=yhoo
Homebuilders' Robust Incentives to Buyers are Telling Indeed - SeekingAlpha:
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060912:MTFH73018_2006-09-12_18-07-02_WEN5304&type=comktNews&rpc=44
[$$] Tempted by Homebuilders' Troubles - at RealMoney by TheStreet.com:
http://secure2.thestreet.com/cap/login/rm_mbp_yho_150wc_ads.jsp?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190&flowid=106cb1abc1a&url=http%3A%2F%2Fwww.thestreet.com%2Fp%2F_yahoo%2Frmoney%2Fhomebuilders%2F10308423.html
"on a similar note anyone care to discuss the pressure you face in this area from being a renter? you're either looked at as a second class citizen or too poor to buy."
Richard,
This is so hilarious that it is sad. Do you think I give a sh*t what someone else thinks??They can think what they want, I don't live my life based on someone else's perception. Half of them are drowning in debt, I'm solvent. That's the problem with today's buyers, they were all like hamsters, running on a spinning wheel as fast as they can, trying to keep up with everyone else. Well they spun themselves out of control. By the way, my wife's friends are jealous. When they go shopping she pays cash. Her friends rack up the cc's. Can you give me a valid reason to buy vs. rent, in the current market???
BC Bob
In the NYC area, most 'renters' have a net worth of zero, but make in the six figures & have 5 figures of credit card debt..
Their most valuable asset is their collection of 'designer clothes' in their closet. How much value does the average $300 shirt or $250 pair of jeans retain after a year??
If we look at the big picture, we actually see stagnant population growth in the NY metro area along with a significant addition of new housing units.
Can you quote a source for this claim of "stagnant population growth in the NY metro area"?
I think the reality is quite the opposite. Have you been living in Bubble Blog Land too long?
http://www.gothamgazette.com/article/fea/20060417/202/1819
we actually see stagnant population growth in the NY metro area
Where are all nine million of us going to live?
http://tinyurl.com/jj3ff
Get your facts straight.
I have access to the MLS system from my mother who got her license but never uses it (has sold only 1 house ours in 20years). I can tell you I look at the site everyday for Bergen County. specifically Closter,Harrington Park, Rivervale, Montvale, Ho Ho Kus, Allendale and Hillsdale. Prices have come down condsiderably on homes that were priced way too high . Like a 3 bedroom split in Harrington Park on a 80X100 lot. That was originally priced at $659 was sold for $560. I also see things that for some reason in Hillsdale if they are priced in the high 5's for a split they are going.. there is currently 354 homes on the mls system that are in the 0 to 650 range in these neighborhoods.. When looking at the site I see no ryme or reason to this market.. Compared to spring I noticed summer was pretty busy. I remember when we first started looking at houses last year at this time there was 184 houses available in that price range. To sum this up.. I don't really see things as being horrible here either.. I don't see huge declines unless really priced crazy.. and 2 people we put low bids on rejected us and said they would sooner take thier house off the market and rent then sell at that price.. So I think we have a long time to wait.
anon:
before you start lecturing us, the population is increasing, but not among the demograhics necessary to support the inventory of expensive development seen over the last 6-7 years
ultimately your claim is specious because you are not digging into the data enough
RentinginNJ, you suggested that the entire NY metro area's population growth is stagnant.
Clearly that is incorrect.
without the influx of international immigrants, New Jersey’s population growth rate between 2000 and 2005 would have been an anemic 0.3 percent, as opposed to the actual rate of 3.6 percent.
Good thing all of those immigrants are willing to live in tents, unlike the rest of us.
Geesh.
anon:
9/12/2006 02:43:31 PM
And I've been told that you can only rent crap in this area for $1,500-2,000 a mo.. Why doesn't someone run a rent/buy analysis on the #'s from this post. By the way, I used to live in Red Bank. Renting downtown must be a blast.
BC Bob
the population is increasing, but not among the demographics necessary to support the inventory of expensive development seen over the last 6-7 years
Can you provide a source?
I'm that "jack-ss" that you all referred to earlier, and I'd just like to see your data, if you have it.
There's a lot of hot air blowing on this board. You all encourage one another, and the only people whose statements you question in the slightest are those you disagree with. Every other wild claim, provided it appears to support your basic thesis, is accepted as fact.
I suggest more analysis, less posturing, and less name-calling.
Lecture finished.
BOSTON (MarketWatch) — Don Tomnitz, chief executive of D.R. Horton Inc. Tuesday said the company is preparing itself for a tougher housing market in 2007 compared to 2006, with prices finally stabilizing in 2008. “We have never seen housing prices and demand slow as quickly as they have during this downcycle,” said the CEO of the nation’s largest home builder when measured by 2005 deliveries. “Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.”
"Sorry...I wasn't talking about SE PA, and I don't think most of us here are.
I'm sure I can find cheap rent in Dutchess County NY, too, but so what?
9/12/2006 02:17:01 PM "
Again, I asked if you could provide a link to data for rents are soaring. I'd appreciate it, as I don't have a context within my own geographic area, and I'm not sure if you are referring to the last year, last four years, and to what source. As I stated, I'm not in your area, and am curious, since I've not been able to find the data as I look on line. What I found, stated that "In real terms, between 2002 and 2005, rents increased by 8.7% for all renters, 8.2% for all rent stabilized renters, 4.4% for tenents in pre-war rent stabilized buildings, and 6.8% for tenents in post-war rent stabilized buildings."
www.housingnyc.com/downloads/research/pdf_reports
Over the three or four year period, this just doesn''t sound like "soaring." It's what -2% or less a year?
I provided my reference materials for you so that you can see where I'm coming from, [gave you my rent increase over four years, and provided some sample rents I saw] and was asking for the same courtesy from you.
Thanks,
Pat
RentinginNJ, you conveniently left out the next few paragraphs of the article you quote:
Other academics and city officials said the high rate of domestic out-migration was part of a natural process in the growth of New York.
"When you look at the full picture, you see a city that is an attractive place and one of opportunity that has prompted continued strong immigration, which together with natural increase and people coming in from other states has put New York at an all-time population high," a spokesman for the Department of City Planning, Rachaele Raynoff, said.
"I think you miss the picture if you focus exclusively on people leaving," a professor of sociology at the City University of New York Graduate Center, Philip Kasinitz, said. "People have always left the city in large numbers. The question is, is that more than balanced by the people who are coming in?"
The working-age immigrant influx is what has maintained New York City, Mr. Kasinitz said, crediting the trend with bringing new vitality to neighborhoods that struggled in the 1970s.
Here you go, Pat, sorry for the delay:
"Apartment Rental Market Sizzles" (August 2006 article):
http://www.nysun.com/article/37651
spin this?
BOSTON (MarketWatch) — Don Tomnitz, chief executive of D.R. Horton Inc. Tuesday said the company is preparing itself for a tougher housing market in 2007 compared to 2006, with prices finally stabilizing in 2008. “We have never seen housing prices and demand slow as quickly as they have during this downcycle,” said the CEO of the nation’s largest home builder when measured by 2005 deliveries. “Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.”
9/12/2006 03:48:18 PM
read it again.
“We have never seen housing prices and demand slow as quickly as they have during this downcycle,” said the CEO of the nation’s largest home builder when measured by 2005 deliveries. “Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.”
read it again. Go ahead spin it.
BOSTON (MarketWatch) — Don Tomnitz, chief executive of D.R. Horton Inc. Tuesday said the company is preparing itself for a tougher housing market in 2007 compared to 2006,
right, the working class
illegal has Bk'ed the
legit taxpayer.
whos kidding who.
the outer boros of NYC
are third world.
9/12/2006 04:02:14 PM
They can also include this in their spin;
KB Home is scaling back its land position to "reflect the realities of the market,"
Also,
Chief Executive Robert Toll said the U.S. housing market got ahead of itself due to greed on the part of buyers and sellers, and that it now likely faces the highest level of speculative inventory ever.
Highest EVER???? That sounds like a long time frame to me.
BC Bob
Given an average household density of 2.6 people per household
Does those numbers hold true in the condo market?
The apartments in the outer boros are expensive crappy dumps as well (at least the ones advertised on craigslist). The realtors are making money hand over fist especially in nabes like Woodside, Astoria & Jackson Heights which are the trendiest (and most expensive) parts of Queens so they can easily get their 15% standard brokers fee.
Then you need more documentation than you would need to get a mortgage and they don't want to rent to you if the rent is over $1,000 a month and you are 'only one person' unless you have a guarantor and make over $150,000 a year.
Yeah, you all are right. Everyone who owns a house in New Jersey is an idiot with massive amounts of debt and there is absolutely no value in owning a home, living in a neighborhood, making friends and connections and contributing to a community.
Give me a break.
"... living in a neighborhood, making friends and connections and contributing to a community."
I completely agree with you on the above phrase! We have a ton of friends and connections in our quaint little boro, contribute to our community in many financial, social and charitable ways, and are completely accepted by our peers, church groups and school board members.
Funny thing is, we rent.
Pat
Pat, your story is an exception in this show-and-tell area of the country. Better stay put.
{{Yeah, you all are right. Everyone who owns a house in New Jersey is an idiot with massive amounts of debt and there is absolutely no value in owning a home, living in a neighborhood, making friends and connections and contributing to a community. }}}
Making friends!!?? In NYC or Long Island. Unless you are refering to drinking buddies, drug connections or shopping buddies, you have got to be kidding me.
Everyone is self absorbed with materialism and trying to outdo & backstab the next person.
Ones sucess in this area is determined by what they drive & what they wear.
If you want to be part of a community & "Make real friends" (sarcasm intended) then move to upstate NY north of the catskills
"Funny thing is, we rent."
Pat
9/12/2006 05:02:31 PM
Ditto.
BC Bob
"Ones sucess in this area is determined by what they drive & what they wear."
Are people really this shallow????
BC Bob
I think we're going to move to the new site this weekend. The new site is going to use the forums for comments and topic discussions.
If anyone wants to take a peek, the site is:
North Jersey Real Estate Report
This should make participating and following these discussions much easier.
grim
"Over and over, folks on this board forget that people need places to live."
Sure, but people don't have to buy houses. They can rent indefinitely, and keep stashing their money in the bank until prices are reasonable again.
"Sorry, but no matter how you delude yourself, you cannot sit this one out on the sidelines unless you decide to go live under a bridge abutment somewhere."
Sorry, but you're wrong. I can keep living quite comfortably in my modestly priced apartment until the time comes that houses are being sold for fair value.
"Yeah, you all are right. Everyone who owns a house in New Jersey is an idiot with massive amounts of debt"
Yup, we are right, that pretty much sums up NJ and most of America. Maybe not your circle....but your crowd (or mine) is not the majority.
" no value in owning a home, living in a neighborhood, making friends and connections and contributing to a community"
Yes, their is value in that, but its not worth an ARM and a leg at the tune of $700,000+ for an overpriced shitbox.
"Give me a break"
You don't get breaks on my watch, that is what the weekend is for, so get back to work.
SAS
Can you increase the font size on your new site?
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