I’ve received a number of emails lately, which all asked the same question. If people are boycotting open houses, and not placing bids, how are sellers supposed to know that their homes are overpriced? It’s a good question. Unless the sign in sheets are blank, and their home has been on the market a long time, they probably don’t. Very few people in New Jersey are keeping as close a watch on the market as we are, agents included.
So here is what we’re going to do. I want you all to go out to realtor.com and find a listing or two that fits what you might be looking for. Once you find it, paste the link up as a reply, along with the price that you would seriously consider buying it for. You can post anonymously if you wish. This is a serious exercise, please don’t post a link to a $4.5m home with a bid of $10.50.
Here is an example, chosen at random:
The property is in Essex Fells, NJ.
The current asking price is $819,900, a reduction from an OLP of $849,900. This home has been on the market approximately 6 months.
Barring any problems with the home inspection, I would purchase this property at $650,000.
I’ll be posting my selections up later in the day, anonymously. However, if this home was in my price range, and what I was looking for, I would most certainly purchase the home at that price, barring any issues with the home inspection, of course.
Caveat Emptor!
Grim
This sounds fun Grim…
My fiancee and I have looked at this house for about a year now. It is not selling because it is small, and the garage is falling down
http://www.realtor.com/Prop/1053785154
They want $345,000 for it, but I would not pay more than $300k for it. I think $290,000 would close the deal for us :)
here’s one i’ve actually seen in person and been tracking for a while in madison. on a busy street but pushed way back and nice.
http://www.realtor.com/Prop/1056092230
original asking $825.9k now $769k. i’d give them $650k.
Okay, here’s a sample: MLS# 10068181
It’s tatty, on the bay, and cheek-to-jowl with other, similar shacks. Owner wants $550k. I want to win Wimbledon. We both are equally far from our dream…
I would enter discussions at $259k. This sort of property is a case of a rising tide not lifting the boats that are anchored by a short chain.
Another:
MLS# 3002172. Asking $850k. I’d open in the low threes. Owner has got to be kidding.
MLS# 3005059. Asking $629k. I’d open in the low threes for this, also. To paraphrase William “Doubling Down is a Virtue” Bennett, “where is the value?”
Maybe I’m deluded, and these are properties that the owners can hang onto long enough to weather the storm (praying, of course, that Al Gore is wrong about all that rising ocean level stuff…). But properties at the lower end of the spectrum seem due for the biggest correction.
Homes listed for roughly 50% more than the dump for $850k–$1.2 million–just seem to offer so much more “value,” everything being relative. I’d expect those pricier, more liveable units to slide only about 1/3 to 2/5 in value–back into the sevens or eights. But then, maybe I’m the crazy one.
Jamey from Bergen
That looks nice Richard. I might also pay 650 – looks like it needs no work. But I’d still ask for closing costs or something – compensate you for the busy street:)
Minutes, that house is cute, but you’re right – 290 – you have to redo the backyard and kitchen!
Minutes, that house is cute, but you’re right – 290 – you have to redo the backyard and kitchen!
njgal – we love that the house has the original cabinets :)
after reading all the news lately
my wife and i are looking still but i will start all offers at at least 25% below asking on anything
grim thanks for all the great info
i’ve seen this one. check out 2244454 in new providence. been on the market almost 5 months and went from $579k to $500k and looks like in attorney review. while a bargain compared to recent comps, still a ripoff. let’s see $500k with 20% down = $400k mortgage at 6.5% 30-year fixed costs about $2500 a month. taxes and outrageous maintenance fees gives you another $1225 so you’re paying $3725 a month to own essentially a 4 level attached on 1 side 2 bedroom townhouse with the basement listed as the “3rd” bedroom.
hahaha! buyers must be utter fools. considering the taxes, maintenance fees and weird layout, i’d give you no more than $350k for it on a good day.
If the market corrections is 25-30%,
when ,if at all, do you see a return to nrmal appreciation (5-6%/year)?
Here is one that I have been looking at:
MLS# 2275550
http://www.realtor.com/Prop/1059682326
Original Asking Price: $679,500 (early May), reduced to $668,000 (May 26th +/-). If memory serves it last sold in ’99 for $260,000, it seems that they renovated the kitchen, during their time in the house (maybe $50k cost). I just cannot get over the idea of over $600k and only 1.5 baths.
Maybe I would be interested in talking at $465k.
richard: Never ever ever buy a house on a busy street, no matter how “cheap” you get it for. Location will return as paramount to house values, and a busy street will also seriouly impact your quality of life. Don’t do it.
Here’s a house in Franklin Lakes for $949, MLS 2622135. It’s been on the market a month and no takers. I’d be willing to pay $800, but considering it’s only been a month and they’re still in denial, they probably wouldn’t accept anything less than $930.
Franklin Lakes has over 150 house on the market according to the njmls, last I looked some pictures still had snow.
Original is key for me as well. I love the details of old houses, although my husband likes to point out that they’re not always the best layouts. But me, I’d take some charm anyday!
Agreed, FL does have a ton of houses, but I’m trying to be realistic. I’m revising downward to $750, $800 is too high in this dropping market. Any price you offer today needs to be made based on today’s and tomorrow’s trends. That house and others, will still be sitting in April 07 and they’ll be asking $800 with no offers.
There is no such thing as “normal appreciation”.
grim
I know this is a North Jersey blog, but I’m more familiar with Westchester.
Here’s a house that has been on the market since last summer (MLS: 2607809):
http://www.realtor.com/FindHome/HomeListing.asp?snum=28&mlsttl=&frm=byzip&pgnum=3&mls=xmls&target=&ct=&st=&sbint=&sbls=&sblo=&stype=&zp=10580&areaid=10580&mnsqft=&fid=so&vtsort=&mnprice=750000&mxprice=1000000&mnbed=0&mnbath=0&typ=1&typ=2&typ=4&poe=realtor&x=5&y=8&sid=06D9C5F1F7F3C&snumxlid=1056963693&lnksrc=00002
It’s not really in a neighborhood, just a random street close to downtown Rye.
Originally listed at the laughable price of $1,250,000, it’s been reduced to $995,000.
I would consider it for $650,000, which I think is a very fair price given it’s sq footage, small lot size and location.
First: Silly question: How do you ascertain a property’s OLP, whether its been reduced, and its reduced price? I don’t see that information provided on Realtor.com, nor on NJMLS or GSMLS. Any help?
Second: anonymous 09:04:43 AM wrote: “when ,if at all, do you see a return to nrmal appreciation (5-6%/year)?
Actually, historically “normal” appreciation is about 1-3% per year. I guess the overheated market has obscured that fact.
minutesfronny,
Very charming….would start with an offer of $285000 and go from there capping out at 300k
This is a cute house in a ok part of Summit. It is on a nice block.
link
The asking price now is 729k, i believe it was 749k a few mouths ago.
I would pay 575k for it
CC
*********************************
Richard said…
here’s one i’ve actually seen in person and been tracking for a while in madison. on a busy street but pushed way back and nice.
http://www.realtor.com/Prop/1056092230
original asking $825.9k now $769k. i’d give them $650k.
6/28/2006 08:23:04 AM
********************************
Richard I have been tracking the same house. I was thinking between 600 and 625 due mainly to location. I think you could get this house for 650 right now if you wanted to.
“richard: Never ever ever buy a house on a busy street, no matter how “cheap” you get it for. Location will return as paramount to house values, and a busy street will also seriouly impact your quality of life. Don’t do it.”
IMHO, it’s really unrealistic to impose bright line rules like this.
Suppose the busy street address is the only home within someone’s price range in a nice town with great schools?
In other words, I’d rather live on a busy street in a nice town with great schools, than a quiet street in a so-so town with so-so schools.
Of course, in some cases driveway access is a nightmare, such as busy streets near a bend in the road. But I would by no means rule out busy street addresses in general.
JDP
illy question: How do you ascertain a property’s OLP, whether its been reduced, and its reduced price? I don’t see that information provided on Realtor.com, nor on NJMLS or GSMLS. Any help?
Hard way: Track the property, over time, using gsmls, njmls, or realtor.com
Easy way: Make friends with an agent that has access to the gsmls or njmls systems.
There are many ‘friends’ on this blog that would be happy to provide you with that information.
grim
Another angle on this discussion:
http://www.realtor.com/Prop/1062826624
A rental (2 fam) in Summit where the rent roll is less than the mortgage (not even including taxes and insurance). As an investment why would anyone one do this with home prices not appreciating. That is not retorical I really would like to know. Check out this listing an look at what the description says “Just buy and start collecting $$$ on this truly turnkey home!!!”
Does this make any sense?????
What is a vaild price for a return on this investment with this cash flow?
Moonshine
Moonshine – I blame books like “Rich Dad, Poor Dad” for this property = new hotness mentality.
“You too can make BILLIONS in real estate”
cc, i’ve looked at that house in summit. it’s not bad. block is ok as it’s closer to the million + houses just to the east and north of morris. i’d give slightly more for it, say $600k considering location and low taxes.
I dont understand how houses close to million dollar houses is a selling point?
richard: Never ever ever buy a house on a busy street, no matter how “cheap” you get it for. Location will return as paramount to house values, and a busy street will also seriouly impact your quality of life. Don’t do it.”
I agree that you shouldn’t assume your standards for quality of life apply to everyone.
We have no children and don’t plan to have any.
There is less likelihood that we will be surrounded by children and all the noisy accoutrements (basketball hoops, trampolines, etc.) on a busier street as opposed to a cul-de-sac.
As long as we have a decent backyard and can turn around to drive out of the driveway nose first, we’ll be happy. Plus, we’ll pay less than on the quiet street.
“Busy” can mean different things to different people.
I use a loose calculation to approximate the potential offer price on a prospective house.
Understanding that Im selling my house for an appreciated price I attempt to calculate the ‘funny money’ in my own house then apply it to an adjusted cv price on the prospective property.
I do this by calculating my houses current ‘uninflated’ value by applying cpi/cv calculations to my original purchase price (purchased in 1998). I subtract that from what I sold my house for, giving me my ‘funny money’ or ‘over-appreciation’.
Then I attempt to normalize the prospective houses cv price based upon tax records for that particular house and other comparable houses in that neighborhood. If the tax records indicate a sale during the years where we already entered the bubble runnup (2000-2005) I try to discount it back to 1998. Then apply cpi values to the 1998 price giving me an inflation adjusted housing price.
Then I take the ‘funny money’ that Ive made on my own house and apply it to the inflation adjusted price on the prospective house, giving me a current adjusted value (with funny money adjustment). Interestingly enough the current list prices on houses tend to be significantly off from my inflation adjusted price for the house (with added funny money).
I also recently started reading material by Harry S Dent (www.hsdent.com). His books give an interesting perspective on this housing boom (as well as the economy in general) and some interesting predictions on where its all going. He basically analyzes the market using demographic trends, specifically the baby boomers. He boils things down to statistics (what is the average age people move into their biggest house) and the fundamental laws of supply and demand. Very interesting read.
The hardest part of buying a home in this market is determining what is a fair price for the house. This approach gives me some starting point and it puts my mind at ease.
I really enjoy this blog. It provides me with the intentistinal fortitude to walk away from a deal if I feel like the sellers are being irrational.
“We have no children and don’t plan to have any.”
Even if you decide to have kids, the busy street aspect is a non-issue if you have a back yard large enough to serve as a play area and you install a sturdy fence.
And yes, the irony is that busy streets are often quieter than quiet streets for the reasons you cite!
JDP
I have several properties in mind BUT the continued access to easy credit has me really worried. I might put a value on a house today but may not stick with it tomorrow. By trying to tie a value to a property I feel like I’m trying to catch a falling knife.
What do you feel? The only economics i know of is from reading articles on the internet.
What is the future of ‘easy credit’? Is it here to stay? Will interest rates continue to be low the near future? (Greenspan said that a few years back)
I’m confused
My contention is that prices will revert to the mean increase – like they always do. In NJ, that means about a 25-35% correction. That means I don’t buy for anything over 65% of a “reasonable” list today.
http://www.realtor.com/Prop/1056959742
2259753, this is a new house in bridgewater. They have three similar houses like this. They want 689k. I would buy it at once if it’s 530k. But I think I’m dreaming. I would never buy a house with a price like that.
–frustrated sitter
richard: IS till disagree, My sister lived on a busy street in Bergen Co for many years, her and her hsuband bought at the height of the last market,a ndwere forced to stay there for a long time.
Anyhow they have kids, and did the fence thing, but even without kids. I would point the following.
Try living aon a busy street, and keeping your windows open when teh weather is nice, it is loud, very loud, forget about watching TV, net tiem take a ride ona busy street, and see all the closed windows. Then there is the dirt, the amount of soot form cars and truck that accumulated in teh house was incredible.
Sitting out in you rbackyard, with the traffic ZOOMIng by, not enjoyable, again the quality of life thing. My sister has videos form various parties etc over the years, and the traffic noise are always there.
There is also the safety factor, my sister had two instacnes where peopel lost contol of there cars and landed on her front lawn, it could have happened on any street, but the busier the street, the greater the chances it happens.
Finally realse value, yeah it will be cheaper, but if an when you ever sell, you will be at a huge disadbvantage as people with kids or who plan to have kids will be concerned.
I am nt telling you what to do, but I think you should rethink this.
My sister eventually got off the street, but she spent many unhappy years there.
http://homepics.realtor.com/image9/http/gardenstate/submit/large/037/2259755a.jpg
Grim: I love this idea..
I emailed you before for this listing. I would seriously consider buying if it goes for below 600K. I will definitely buy it if it is 550K.
2282725
Seeing big price reductions in less desirable areas first, the better ones will follow.
Also, the market is dead in towns like River Edge, partly because their taxes are innane. Yes, I said innane
Delford,
No one is saying your sister didn’t have a miserable experience. But not all main road addresses are equally insufferable. You have to take into account set backs from the road, as well as the intensity of traffic on the busy street. At a house right on top of a busy street, of course noise is an issue. But if it’s set back far enough, noise isn’t as big an issue.
Also, some roads are less busy on weekends, when most people are doing their entertaining.
Also, consider topography. If the property slopes up above the road, the road noise will definitely be less.
As far as pollution goes, I’ve lived on both a main road and side streets, and never noticed any extra soot on the main road. But maybe that’s because the home I selected was set back a reasonable distance.
JDP
How about this 2 br townhouse in Branchburg?
Current list 328,900 under MLS 2255963.
Originally listed (under different MLS back in Sept. 2005) for 339,900.
Current tax assessment 222,300.
Originally purchased 11/30/94 for 127,000.
Would offer 235,000.
MLS ID#: 10088270
$699,000
4 Bed, 1.5 Bath
I’d pay $425k- place needs work-updating.
Frustrated sitter:
You might get it at the price you want before you know it. But I am afraid at that time, you feel the price you are more than willing to offer today is too high for the house then..
Offering 500K for a nice BW property is not that unrealistic, considering what houses priced for about 7,8 years ago.. BW is also not a top tier town, have you been to the Vandeveer section? I would not want to live there, the houses are asking for 600K+.. Although recently some “moltivated seller” started to ask for 580k+…
Houses in these good towns are dropping 20K-50K per every three months now… It will accelerate in no time.. I can’t wait to see this..
That means I am earning 20K-50K every three months, and going for more in the coming months, how exciting……
The prices people are throwing out there seem very reasonable. I think there will be a protracted decline in RE over the next 5-10 yrs that will make the prices people have floated here seem very good– even high.
Do not let your giddiness at the decline cause you to lose sight of the long term prospects of your potential purchase.
With the difference between list prices and the prices people who responded said they would pay, it looks like nobody’s gonna get a house today. But I have a question. If for some reason, any reason, house prices went down across the board, say 12%in the next two months, would you still be willing to pay the price you just stated, or would you reassess your view of where prices are going to be,long term, and come up with a lower number. Or alternately, would your number be the same, with you being pleased that your goal is looking more attainable. (This is an honest question that I think it would be interesting to have some feedback on.)
We were driving through Montclair last Sunday and stopped into this open house on Valley:
MLS# 2287572
Issues..
Corner Property
Oil Heat
On Valley Road
Needs Updating (Why did yo put granite countertops on top of cheap 80’s cabinetry?)
I *might* be interested at about the 425-450k range. Although, to tell you the truth, even at that price it would seem a bit overpriced, given the location, property type, and work required.
grim
To Anon. at 11:19am:
I have a bench mark price for houses, that was how much they sold for in 1998.
I will add 3-5% appreciation to these houses and get my right price for the right house. I don’t really care how fast or slow they drop, that is the price I am willing to pay.
Once house price hit my range, that is when I will put in offers.
What would you do?
REINVESTOR…PAGING REINVESTOR
Your input would be appreciated in this thread
Do you think bubbleheads are being unreasonable?
Anon 11:19,
It will take a while for this market to find a bottom. What might seem like a reasonable price right now might change in a few months.
Significant price cuts (10% or more) will certainly bring in some buyers from the sidelines. Some people will feel as though they can’t wait any longer.
But I think the longer buyers can hold off, the better they’ll be. Past RE bubbles show that these things take years to unwind. Plus, the long term demographic trends are not positive for RE
frustrated sitter,
I drove by all 3 of those new houses – they’re on a nice quiet street that has mostly older smaller houses. These houses don’t really “fit in” there.
If they went down to $450, I’d be interested.
SMK
I’m against busy street home locations. Yesterday in Sayreville a dumb dumb drove his car off the road through a homes fence into their backyard and the two front tires landed in the family’s swimming pool.
Plus the loud motorcycles that don’t ever seem to have mufflers on them and all the other loud veheicles driven fast and loud by all the insane drivers we have in this state. It’s not worth it. You may be giving up your sanity.
This is a great community service, Grim. You could maybe cut/paste the link to this by e-mail out to the main contact us page on some realtor sites. We’d get some real discussion going. I guarantee!
If we had to move back to NJ from PA, here’s the area.
Here are two:
http://tinyurl.com/s8mov
Asking $515; I’d offer $450 to put a good amount down. Well water/septic. Probably not get it. Don’t really like this house, but friends are there and could commute together/kid sitting/etc.
http://www.realtor.com/Prop/1058571912
Listed at $490. I’d offer $425.
This house reminds me of my childhood home. That’s the only reason I picked it. I really can’t stand the traffic there.
Pat
In normal times, for price rises of 3-5% annually, there would probably be 3-5% more buyers than the # of houses available on the market. But right now, 30% of the buyer base (ie speculators) of the last 2-3 years has disappeared. And the 30% of speculative buys from the last 2 yrs have come to the market. In normal times if x amount of inventory would have about 1.05x buyers, right now 1.6x inventory will need to be cleared with about .6x buyers. Until this situation resolves itself, there is no way to find a bottom in this market.
This is a tough exercise, and it depends a lot if you’re actually looking to move, if you’re seeking a second home, or (God forbid) you’re a real estate investor.
In the second two cases, I simply wouldn’t put a bid in on anything because I don’t know where the market is going right now.
Even if I had to move, I think I would rent because of the uncertainty in the market. I know it doesn’t help the exercise, but that’s what I think.
On that house in Essex, I’m not even sure $650K gets it done. Assuming it’s being bought by someone who is moving either laterally, or up a bit, even with a huge down payment of $250K, that still leaves a $400K mortgage.
The minimum income level for a sane purchaser of that house at that price is $150K. I don’t know that much about Essex, but $650 still seems high.
Hoboken Property.
http://realtor.com/Prop/1057018394
I’d go $375K-380K
Pat,
Both of those offers are extremely realistic. I know people putting in offers very similar to that today.
That said, $450 on the first seems a bit on the high side to me. Mainly due to the location, the location is very far from friends/family/job..
grim
anoymous: River Edge went crazy with taxes, and with lots of mom and pop speculators/ builders inventory has exploded in the past month, but nothing is moving, and there is more to come. Some in the town also fancy it a Ridgewood, it is not and never will be a Ridgewood, het ots not even an Oradell, which is another high tax town with a dead real estate market.
River Edge also went on a spending spree having approved a referendum for a huge addition to the local schools. Two problems, probalby not getting the promised state money, and it is only that a promise, and the town has almost 0 ratables away from residential real estate.
The bid on the Hoboken property seems very realistic as well.
Seems like many of you don’t share the same “grim” outlook as I do.
Going by my own personal rule of thumb, that Hoboken property would need to rent for around $2,500 a month to be a ‘good deal’ at 375/380k.
grim
The following big 2 bedroom (1300 sq foot) Hoboken condo (walking distance from Path but no parking) is listed at $495,000 (http://hudson.fnismls.com/publink/default.asp?GUID=a1f047f2-f172-47a1-8b2a-349f9158e6d3&Report=Yes). It would rent for $2800 easily. I was thinking that $425000 would be a fair price but it appears that the owner paid $455000 for it back in the summer of 2004 so my guess is that my offer would be unceremoniously (sp?) dismissed.
A little bit off topic, but related.
Bloomberg had a story today on the market going cold and price cuts occuring.
http://www.bloomberg.com/apps/news?pid=20601103&sid=amJynxoSEAco&refer=us
Toward the bottom of the article was this graph:
Grandy said she’ll be able to rent an $800,000 home for about $2,800 a month, and plans to move before September so her two children, 5 and 8 years old, won’t have to change schools mid-year.
This is on Bloomberg, where there are supposed to be people with some business sense.
You cannot rent an $800K home for $2,800 for long unless the owner is a wealthy idiot.
Absolute best case scenario — the home being paid off and having virtually no maintenance costs — that amounts to a 3.5 percent return. If you could sell it for $800K, it has to be sold.
Anon 11:19,
I think a 12% decrease would make some people move on offers while others would still want to offer 15% less at whatever price. I made an offer on a house for 700 when it was listed at 800. The original list was $1M. They declined and relisted the house at 759. They had no offers and then came back to me and wanted to accept my 700 3 weeks later. I declined, the 3 weeks made me see more prices drop and realize this market isn’t stabilizing, it’s dropping further and no one is buying. Now the house is listed at $699 and still no offers. I offered 12.5% less than asking and I think i’d offer about the same 12.5% less again if I was to make an offer. I’m the only bidder, why bid against myself. They’re asking $699, I’ll offer $600, if they don’t take it, I’ll tell them try calling me again in 3 weeks and I’ll offer $500.
I’m not trying to get back at greedy sellers (since I was one about 3 months ago), I’m just trying to do what’s best for my family.
I look at it differently.. We bought our house based on 20% less then 2005 prices and we also looked at the comps for similar houses to see what people payed at the beginning of the boom. We averaged the two.. That is basically what we offered. We loved the house and needed to move.
chicago’s off-topic Hoboken dime-store diatribe 6/28/06
The Hoboken condo market is primed for a serious tuchus-kicking. If you buy anytime before mid-2007 you are a fool.
If you want to buy a brownstone or some other 3BR+ solution that would represent a level of permanence, fine. Otherwise, what are you doing?
There is already serious depreciation in prices that is being hidden by developers in the form of free upgrades, givebacks at closing, and cut-rate financing.
The flow of inventory is not going to stop from new and existing development for at least 3 years.
Rent. Rent. Rent. And if renting doesn’t seem to fit the bill, then maybe you should consider renting.
How do you find out what current or previous owners paid for the property?
zillow.com.. will give you previous sales price
Anon 11:05 Point Pleasant –
If we help you install a new kitchen you’ll let us have the house the 2nd week of July for the next three years, right?
Alright..I’ll dig out the nasty hedges and install windowboxes, too.
Pat
2614240
Think this one started in the 8’s is now down to 649K.. All redone.. very nice on the inside.. Would pay 585K
i’ve seen this one. check out 2244454 in new providence. been on the market almost 5 months and went from $579k to $500k and looks like in attorney review.
it was actually at 649K last year, dropped to 599K, then was taken off the market and relisted at 579K. The townhouse is actually pretty nice (especially when compared with 650K plus townhouses in neighboring Murray Hill garden), and its walking distance to the train station, but the extremely high maintenance is a killer. The previous owners paid 420 K or something for it 3-4 years back, so I dont’ think you are going to get it for 350K.
I emailed you before for this listing. I would seriously consider buying if it goes for below 600K. I will definitely buy it if it is 550K.
2282725
Its in attorney review (at 859K). The house seems pretty big, 5 acre lot. Realistically, unless there was some serious problem with it, it would be hard to get it for 600K even if the market is really down.
2259753, this is a new house in bridgewater. They have three similar houses like this. They want 689k. I would buy it at once if it’s 530k. But I think I’m dreaming. I would never buy a house with a price like that.
I don’t know. 689K for a new house on a .91 acre lot seems very good to me. Bridgewater is only a middling town, but its not terrible and new homes generally cost a lot more. Unless of course, the street is really bad.
Issues..
Corner Property
Oil Heat
On Valley Road
Grim — why is Corner Property bad ? I thought it was normally a positive unless of course its at the corner of 2 busy streets.
Anon 1:26..do it or I will (if only I could.)
If you go up in the attic, between the doormers, are there any small cubby doors that let you crawl under the eaves between dormers?
Too bad all the woodwork was painted. It still looks nice, but imagine it with a shiny chestnut old wood look on the newel post.
Pat
If the market corrections is 25-30%,
when ,if at all, do you see a return to nrmal appreciation (5-6%/year)?
Looking at past boom and bust cycles, 4 to 5 years is the norm.
Re Zillow,
I find it useless in the Maplewood area. Nothing helpful there at all, no data on past sales.
We’re nearing the end of June, and the realtor who always posts sales from the previous month, is seriously behind schedule with the May numbers…
Wonder why? :)
MLS 2289888
OLP 699,000
Current List 649,000
Would seriously consider for 500,000 – 525,000.
House is in a nice neighborhood (drexel hill), but taxes are over 750/mo, the house has an unfinished basement, 1 car garage and a fairly steep sloping backyard. Plus, Clark doesn’t have much to offer other than above average schools. The center of town is below average and residents pay extra for barbage, water and sewer on top of already high property taxes.
“why is Corner Property bad?”
Less privacy, surrounded by traffic on two sides.
That said, take a look at this property, which is surrounded by streets on all four sides:
http://tinyurl.com/kossd
It’s not for sale, but it’s such a bizarre location.
Pat,
I only have one pretty big issue and that is way I haven’t really moved on it.. If you have ever been to Harrington Park.. There is a frieght line that goes through there.. Noisy as all get out.. The realtor told me its part of the towns charm..Its a couple of blocks away from it but still too close for me.. I have been meaning to get up around 4 am (there is a 5am train that goes through there that you can hear in Rivervale) Just to see how loud it is.. But I am just not motivated lately.. It could be that is the summer and I am more interested in a cold beer.
Actually, historically “normal” appreciation is about 1-3% per year. I guess the overheated market has obscured that fact.
I believe it is 1-3% over inflation rate, so 5-6% makes sense.
Why is Corner Property bad ?
I think it’s a matter of personal preference.
I was raised in a corner property house without a fence or hedges, and it was like living in a fishbowl. Plus, you have all that extra sidewalk to shovel when it snows.
It would have to be a pretty special place to make me want to buy a corner property.
jw
Definitely happens in the summer.
The train doesn’t bother me.. my Dad worked for the railroad for 35 years, so I’m used to it. But if you’re not, it’s annoying instead of comforting.
Pat
How ’bout these, in Maplewood?
MLS#: 2288809
Listed at $359,000
MLS #: 2273031
Listed at $415,000 (down from $425,000). It has two large brs, but the third is barely a nursery, on the south Side of Springfield.
MLS Number: 2290900
Listed at $389,000.
None of these are on the $1mm side, but they seem overvalued just the same.
What would you consider fair pricing for these?
Anyone with access to history, that could shed some light, please do.
see your point .. I grew up in absolute quiet.. I lived on a major rd in JC for 4 years never could fall asleep..I got the impression they put it on for 649K hoping for a bidding war..
I live on a busy street, as a renter. I like the house–chestnut woodwork that has never been painted, high ceilings, etc. A friend who was visiting said, “This house is you. Would you ever buy it if it were for sale?” I had to say no, because of the busy street. It has a beautiful front porch that I can’t use because of all the traffic noise.
Bob is enjoying a margarita.
Remember –
NO MAAS!!! No Bids!!!
Boycott Houses!!
Bob
Robertito está gozando de un margarita.
Recuerde – ¡NINGÚN MAAS!!!
Ningunas Ofertas!!! ¡Casas Del Boicoteo!!
Bob
debe boicotear los hosues disponibles para la venta
Never ever ever buy a house on a busy street, no matter how “cheap” you get it for. Location will return as paramount to house values, and a busy street will also seriouly impact your quality of life. Don’t do it.”
It depends on your priorities, lifestyle and the specifics of the property. A majority of old, historic and interesting houses can be found on primary roads.
I lived in a beautiful 100 year old house on a busy street for many years, purchased at a steep discount due to the main road. The property was very deep, and the house was set way back. You could only hear road noise from the front yard, but not from inside the house or in the back by the swimming pool.
I would not have bought it if it was closer to the road and noise intruded into the house.
Another thing to consider is that houses on busy roads are typically not part of a social neighborhood as nobody wants to hang out near the noise in the front yard of their homes. Of course this might be a plus depending on your point of view.
And finally, houses on primary roads are much more difficult to sell when the time comes since they are undesirable to a large segment of the market (particularly people with kids), and must be substantially discounted especially in a slow market.
This posting today from the Westchester RE Blog :
westchesterny.blogspot.com
>>
As a real estate agent, I recommend you buy now. Don’t be influenced by the media with this bubble talk. This is a great time to buy as sellers are starting to reduce prices.
Prices will start going up in the fall.
No compro ninguno..
hmmm…2614240.
Chicago, laying down the bilingual skills.
Muy impressive, senor.
Heres a link for helpful conversion factor tables in pdf format.
http://oregonstate.edu/
Dept/pol_sci/fac/sahr/
sahr.htm#_Conversion_
Factor_Tables
These tables provide a way of calculating inflation adjusted numbers in 2006 dollars. All you have to do is divide the number (say 1998 home price) by the conversion factor for that year (1998=0.835 if using the 2005 chart) and it will give you the inflation adjusted price of the 400k house.
So say someone bought a house for 400k in 1998. The inflation adjusted price would be 400/0.835 or 479k.
When I sold real estate back in the early 90’s, homes on busy streets sat for up to two years, one in particular was on Norman/Valley in Upper Montclair. This was a time when things were “normal.”
Good luck with your purchase ;-)
is Grim ghost and grim the same person?
no
house refinancing –
you’re spamming the wrong blog. people around here are not idiots.
JS
sorry grim
didn’t know you were going to delete it. you can delete mine too.
JS
grim –
this exercise helps a lot. I certainly didn’t want to be stupid and bite off more than I can chew. affordability aside, we’re interested in houses in the 500k range but since we only want to spend 350k max, we’re only looking at 400k houses and just see if they come down a bit. but we would definitely be settling then.
it’s reassuring to know other people here are also wanting houses that are 100-200k more than they’re willing to spend.
good luck everyone. hope you get the house of your dreams – soon!!
MJ
usually how much longer a listing will show in GSMLS once it goes into attorney review?
No habla
usually how much longer a listing will show in GSMLS once it goes into attorney review?
Normally attorney review lasts 3 business days. Assume 3-5 days (One calendar week).
“usually how much longer a listing will show in GSMLS once it goes into attorney review?”
Sometimes a few days, sometimes for many weeks until the day it closes.
Grim ghost, beat me by 4 seconds. :)
To clarify, sometimes a seller will continue to list the property, until the day it closes. Such a practice is probably designed to keep pressure on the buyer in contract.
In those cases, the property will be listed as in “attorney review” for up to several months, until the day it closes.
O.K, Grim.
You got the low-down on what people want and can afford or are willing to pay.
Now, let’s get some of the listing agents to show up here with comps from the last two months, and justify NOT selling the houses for the offers/amounts listed here. NO comps accepted older than 5/01.
Pat
Sometime ago I had plotted this chart.
NJ HPI vs CPI chart for last 25 years
As Historically it is said that RE moves slightly (1% to 1.5% above) higher to CPI. Given we are in NNJ (High demand, low new supply, new NYC etc…) I am thinking we should be more like 2% to 2.5% above CPI.
Hence I am thinking of waiting till HPI moves back between 2% & 3% range.
Though looking at past boom, I think it will still be 3 to 4 years before prices come back in line with historic averages. Last time it took 5 years ( 1987 to 1993 ) for prices to reach back to 3% line. Till then, I will have to live in my current small townhouse.
Anon 3:09.. That is a nice one, but I think it’s overpriced. I hope they can save the park.
Don’t you have to drive down a ways to get on 17 or the Thruway from that house?
Besides, that road is so full of deer you could get killed!
Pat
No its not that bad.. Once you leave the Gate of Tuxedo Park your in the town I would say that its the last exit before the thruway toll and the gate is about 15 min from the Thruway.. Its a one way rd to the gate which is a pain .. Our friends live there and we love it .. Though not good for kids the Public school is not that great and the Private school in the park is 20K per year..
In repsonse to TP I wouls probably pay 650K for it
Shailesh
The prices will come down faster this time because of 2 important factors:
#1
Buyers and Sellers are much more tuned in to each other’s viewpoints due to the proliferation of Housing info on the internet. Take this blog for example. We no longer have to depend on what the RE agent has to say, everyone can do their own independent research and come to a conclusion of what constitues a fair price in the market.
#2
The coming waves of foreclosure due to resetting of ARMs. It has already started in states such as Massachusetts and Colorado. NJ is not far. This event will accelerate the downturn much faster. The bubble is much bigger than what it was in the late 80s.
hi guys,
i’d appreciate any feedback…
will be relocating to nj next year (renting in ca right now).
are townhouses in nj generally cheaper or more expensive than sfh?after maintenance fees, etc. do they come out the same? the concern i have is it seems houses in nj are mostly built in the 1950’s or older. the only new ones seem to be townhouses.
thanks!
VA
VA – when you check the listings, watch for townhouses that say “no association fee.”
Per square foot, I’ve found townhomes generally to be cheaper, but it is not always the case if they are not in the same school district..even if they are only a mile apart. I think schools are really a swing factor here (like taxes). Really impacts the value of a home.
You need to decide how far you want to commute, then go to realtor.com or various sites like c21.com, and put in the zips.
You can call the listing agent for the total association dues, maintenance fee, and a list of pending expenses, such as for a new roof, that the association has recently voted in.
I’ll throw a suggestion into the ring…
Instead of merely discussing the correct pricing of housing, why don’t we actually do something about it? Here’s the idea…
1. A bubblhead should nominate one property as a Spotlight Listing and provide all of the salient info such as school district, lot size, square footage, taxes, year built, condition, time on market, etc. In addition, the recent sales history (up to ten years) as well as comps should be provided.
2. The readers of this blog can evaluate the listing data, add some anecdotal info about why/why not the listing is worth more or less, and ultimately determine what the rational, non-bubbilicious price should be.
3. This analysis is e-mailed to the listing agent and/or the property owner.
4. The NNJ Bubble Blog would create a special section called “NNJ Bubble Blog-approved Listings.” If the homeowner reduces the list price to the price determined by the NNJ Blog, the homeowner’s listing will be prominently displayed/marketed on this blog, which will ultimately increase traffic to the listing substantially, and would likely result in a quick sale. Everyone wins, especially a working homeowner who opts NOT to use a propaganda-filled realtor. Perhaps the FSBO would be the best candidate for this approach.
Yeah, it sounds like a lot of work, but it could be fun. And perhaps it will help to chink up the armor a bit.
hejiranyc, that’s like telling the seller to pay a listing agent a fee to correctly price the house, but then to drop that price to reality.
In a negotiation, it won’t work because most buyers don’t see this blog, and therefore the seller still has secrecy (referred to as “OLD” comps) on seller’s side in the negotiation.
Until all data is known (as in a totally transparent market like for a commodity) then one party to the negotiation will always try to use undisclosed facts to his/her advantage.
hejiranyc has the start of a good idea.
Perhaps, Grim, you can great folder for this type of thing at the forum. Post a listing, and let the discussion flow below it regarding the correct, reasonable price.
Worthy of a re-post:
They [realtors] speak of being “skunked” at open houses, meaning, no one showed up, even after the sellers made “price improvements. I’ve learned to bring a good book with me,” says agent Christopher Rotondo, as he sits alone at an open house in Newport, Rhode Island.
http://thehousingbubbleblog.com/?p=960
Where’s Bob?
There’s nothing like a ‘skunked’ realtor to brighten my day!
I was going to place a bid for $375K on this place listed at $395K
http://realtor.com/Prop/1056910978
The place is on the top floor of a 4 story walk up and is near 1st Ave and Adams. Large bathroom to boot.
What is everyones impression of this place and what would they bid?
Oh yeah…..the above $395K is in Hoboken. Sorry.
Sorry, anon..I’d do as njgal (?) said and drink warm bleach before I’d pay $395K plus taxes for 789 square feet on the 4th floor.
I guess I’m just used lower prices.
Pat
anon 4:07 pm is dead on! regarding the timing/acceleration of prices reverting to the mean (after of course their overshoot to below the mean) Leverage does not put time on the side of most dummy’s who over-payed with OPM in the 01′ to 06′ period.
ps: stupid is as stupid does; the real upside down builder types will go to foreclosure, vs. what a real sale will bring…and via the foreclosure (taken from them) process they will get even less, every RE cycle has proven this.
You know what kills me, ok that is a NICE house. But little 14 foot wide 1/2 duplex/townhomes in Fort Lee are going for 600K
At least with a wooded lot and some pace between my neighbor and I I would feel some of that 800K is worth it.
Chicago,
A follow up to your comment on buying in Hoboken. If you were to guesstimate, when do you think will be the right time? My husband and I have put off buying a couple of times and now we are facing the need to move out of our crowded upper east apartment and rent something larger or buy at the end of the year. I’m fine with renting since it appears the market will still be in flux but I hate to go out and rent only to find the right time to buy is a year later. Hate moving!
Thanks for your thoughts.
JD
Anyone familiar with the Monroe and South Brunswick, NJ markets?
Grim-
Could you please help me out?
MLS ID#: 2277236 lake mohawk
good location no dishwasher in new kitchen bathrooms are dated and work in kitchen and basement not finished. also not lake style and no centeral air listed at 399,000 id pay 310,000
My wife went to look at
MLS ID#: 2241647
new construction in Whippany. 5 BR/3.5 Ba/3Car
Now asking $774,900 (was in the 8’s)
Just one … no … two minor problems:
1. Stone throw from I287
2. Train tracks 50ft from the back door
What was this builder thinking??
Anon 8:48
What’re you lookin for?
I work there, and also work with a former real estate agent from Milltown who is extremely honest (reminds me of Ms. Klaus)
If you need specific info, like on a town, let me know.
Pat
Anon 8:48
What’re you lookin for?
I work there, and also work with a former real estate agent from Milltown who is extremely honest (reminds me of Ms. Klaus)
If you need specific info, like on a town, let me know.
Pat
REINVESTOR…PAGING REINVESTOR
Your input would be appreciated in this thread
Do you think bubbleheads are being unreasonable?
I couldn’t get here earlier today as I wasn’t near a computer. What do I think?
Well, as I said previously, there’s a huge amount of pent up demand that will establish a solid floor for real estate valuations in NNJ. The evidence is the number of responses here in this string. Notwithstanding all the moaning and resentment heaped on homeowners, real estate agents, investors, mortgage brokers and etc., many people want to own their own home.
Based on what many here are willing to pay, anyone who has been in their home for awhile will still make out like a bandit.
This thread grew fast! Here’s a 1 bedroom coop in Rutherford whose asking price is $129K. Here’s the MLS ID# at Realtor.com: 2618440.
What would I pay? $71,195. How did I arrive at that price? With a little help from this New York Times article, written in 2001: http://www.rutherford-nj.com/nytimes.asp
I feel I was very generous person and used the higher of the two prices ($55K) and then gave the owner %5 appreciation per year from 2001 through 2006.
The 2-bedroom units in this complex are even more over priced. They are currently asking $250K but they went for 65-70K back in 2001 according to the article.
Skeptic- I agree, the prices people are willing to pay seem high in many cases. Sellers would be crazy to not take those offers in an instant.
I guess I think the market’s going to fall much farther than most.
But it really is a shame, if some of you would feel okay paying that much money for these properties, that sellers don’t get a clue and reduce to get the market moving.
I’m sure a lot of those sellers would be making a handsome profit even at the prices suggested here.
Never knew I was such a bear compared to most!
Are you all taking higher interest rates into account?
There are townhomes in Edison -Middlesex , West Gate and one on Talmadge Road.
Priced at 370 K – 420 K.
I won’t pay more than 300 K.
This post has been removed by the author.
http://www.realtor.com/Prop/1063860810
House is in good condition in Scotch plains
I saw the house 4 months ago
asking price $424K
My lowball offer will be 370K
3 BR
2 Bath
what do you think?