New Jersey Condos – A Look At The Last Crash

Note: This is a repost of an older piece.

Decided to spend some time going through the tax records to see if I could determine how condos were affected during the last real estate crash. I’m sure many of you have spent time working with these systems to get an idea of prior sales or to snoop on neighbors.

These sales records represent a history of the real estate market over time. However, trying to clearly illustrate how the market reacted over time using these sales is not easy. Homes are not identical and sales are infrequent. In order to track the market you would need to find a number of comparable homes that have sold multiple times over the period.

Condos and Townhomes are better candidates for this type of analysis. Units are relatively similar, and large scale developments offer numerous sales data points over time.

I pulled the tax records for a handful of large-scale developments that were built during the last real estate boom to see what I could find. The first development that I took a look at is located in Clifton. Selected this one because I remember it being built in the mid to late 80’s. I’ve grouped these together by street and assessment value.

The next development is also in Clifton. At this point I was trying my hardest to try to think of any large-scale development I remember being built at that time. I was hoping that this building would have offered as many datapoints as the complex above, but unfortunately it did not. Interesting nonetheless.

At this point I had racked my brain trying to remember the names and streets of condo developments. I spent some time flying around with google maps trying to pick out large-scale condo developments that fit the timeframe. Just when I was about to give up, this one popped into mind. This is very large scale development in West Windsor called Canal Point. This was built during the peak of the last bubble. I believe this complex saw auctions in the early 90’s.

There are a few points to take away from this:

1) Prices can fall dramatically. We’re not talking about a stagnant market where real values are eroded over time by inflation, but large nominal price declines. None of these numbers are inflation adjusted. Can you imagine buying a condo for $130,000 and it being worth $93,000 ten years later? Real estate goes down too.

2) Don’t be lulled into a false sense of security because you are planning on staying for 10 years. In many of these cases, the market declined steadily for ten years before hitting bottom. It took another bubble for them to break even.

3) There have been a number of comments lately stating that owners will simply take their properties off the market during a downturn, they just won’t sell. That simply isn’t the case. Many of these owners sold at substantial losses.

Caveat Emptor!
jb (aka Grim)

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162 Responses to New Jersey Condos – A Look At The Last Crash

  1. Zac says:

    brilliant.

  2. James Bednar says:

    I’m sure many of you have already read this piece.

    A number of posts didn’t convert from the old site properly, this one was one of those. While repairing the image links, I decided that I might as well bring this one back from the past.

    jb

  3. SAS says:

    So how long are we looking at declines in the condo market?

    At least 5 years of declines?
    I think so, dare I say 10 years?

    Either way, alot are going to feel pain.

    SAS

  4. Bubble Follower says:

    I live in Glastonbury, CT a good place to live -desireable, good schools, 7 miles to Hartford the insurance capital. I live in very large development built by one builder. Only 7 houses – very easy to do comps. Between the high in 1987 and the low in 93/94 our house values dropped about 25% – not that complicated. Prices do go down. In 1987 almost zero ARMs, no neg am, no zero down, no interest only and prices went down. So what will happen this time around?

  5. WickedQuiver says:

    James you’re the man. I’m addicted to this blog. Thanks for your perspective on things.

    After nine years of renting in the West Village I moved to Jersey City in April to reduce my overhead. I’m close to the Grove Street Path. It feels like the epicenter of condo construction in the tri-state area. For sale signs on existing property are everywhere. I’m playing the waiting game to buy a JC condo to live in. I’ve done my homework and think I will be rewarded for my patience.

  6. It's crashing says:

    A great warning to all considering purchasing a condo and the risk of huge losses in the next few years.

  7. Hard Place says:

    Hopefully it crashes faster than last time due to quicker dissemination of information via the internet. What about all those people that say as long as you have a long term horizon you should be okay. Some of those price adjustments, showed that in 10 years the market was still down. If it happens like last time, buying now and selling in 10 years, you would be worse off. Guess those real estate agents don’t know what they are talking about. Of course from a much longer term perspective holding for 20 years makes buying at a peak palatable. However your long term gains are probably only a couple % points from an inflation adjusted perspective. It makes me want to wait longer before buying to see some more substantial decreases.

  8. v says:

    HardPlace,
    In early 2000, I remember Cramer saying something on the lines of “it is OK to hold on to JDSU/CSCO if you don’t plan to sell them for the next 10 years”.
    JDSU was at that point trading around $120. “JDSUD” now trades at $15 after a 1 for 8 reverse split.
    Those were the days when ‘investors’ used to mortgage thier house to buy stocks. Now they mortgage thier life to buy a house.

  9. Dear Grim,

    I am a realtor who’s been doing analyses of the market and projections for nearly 20 years now and I must say that I disagree with your terribly grim picture of NJ real estate. Allow me to explain.

    The market crash, and yes it was a crash, of the late 80’s and early 90’s was also part of a major recession. In fact, it was the worst post Depression recession that this country experienced. Additionally, pricing was not based upon any economic fundamentals of value.

    As a result, we had a thoroughly speculative market that was a house of cards and so prices came down to, in some cases, less than half of values held a short while before. What we have is not at all the same economic situation and there is no bubble. It may make good news copy to say it exists but there is no bubble. Another big factor then was a lack of buyers; this is not the case today.

    Let’s also not forget that 12-15 years ago when this all happened,interest rates were more than double what they are today. Another hugely significant difference. Interest rates for home mortgages were double digit for nearly 20 years. Because the real estate industry is the primary internal force driving our economy, the Federal Government has kept rates low and thus has fueled the market with more first time buyers. The lowest man on the totem pole is the man who makes all the others move up.

    What we have is a market where you will find 40-50% of the homes over priced. If, however, one were able to magically make those homes disappear, you’d have the others being sold at a reasonal rate and at a fair price. Values are already down from their highest points by roughly 10% in our area, and often less, and have about another 8-10% to go during the next year. Then we will see a period of time in which home prices will trade within a narrow range.

    So, we do have people out there buying homes (we didn’t before), we have single digit interest rates (we didn’t before), we have a market that is receding from over heated and NOT speculative pricing (as we did before) and we have, for the first time in history, the recognition and support by the US Government that a healthy real estate market is essential to our economy. Bubble? With buyers? Absolutely not.

    And never ever forget that real estate is local and in Northern NJ, our situation is ours alone and so those nationally based news articles simply don’t apply.

    Barbara Weismann

  10. James Bednar says:

    Thanks for your input Barbara.

    jb

  11. bubblewatcher says:

    It’s great to hear the other side (positive) of the story with a realistic, sensible perspective.

    Being a SF homeowner during the last downturn, who squeaked out of coops in NY and into a good starter just as the market softened, I think there will certainly be a difference between the drop in SFH and condos – condos will be much worse.

    I agree that not all will drop, and that there is not a recession (yet), but there are many factors that are similar and many that are worse (energy prices, taxes, wage stagnation, unprecedented overbuilding, speculators) which could certainly cause a similar cycle.

    Yes – not all will drop 60% (remember – location location location!!!) with the greatest losses on studios, high taxes, on the main drag, etc properties.

    Yes – It is different – but it is the same.

  12. v says:

    Hi Barbara,
    “the recognition and support by the US Government that a healthy real estate market is essential to our economy”

    What kind of recognition and support are you implying?

  13. UnRealtor says:

    “Now they mortgage thier life to buy a house.”

    Well said, and true.

  14. UnRealtor says:

    “What we have is not at all the same economic situation and there is no bubble. It may make good news copy to say it exists but there is no bubble.”

    Right, so this looks normal to you?

    http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif

    What we’ve seen the last 4-5 years, was anything but “a healthy real estate market,” where people have gone into tremendous debt, simply to put a roof over their head.

    We’ve needed a substantial correction, and it’s underway.

  15. UnRealtor says:

    This bagholder got burned:

    18 Meadowbrook Road
    Short Hills

    Jun 15, 2004 – Closed $755,000 (MLS 1671861)

    Mar 05, 2006 – $879,000 (MLS 2253723)

    May 01, 2006 – $829,000

    Jun 05, 2006 – $795,000

    Jul 13, 2006 – WITHDRAWN

    Jul 14, 2006 – $795,000 (MLS 2299446)

    Sep 07, 2006 – WITHDRAWN

    Sep 09, 2006 – $745,000 (MLS 2317848)

    Sep 27, 2006 – Under Contract

    Oct 20, 2006 – Closed @ $705,000

  16. 1)WHO SAID WE DON’T HAVE SPECULATORS THIS TIME IN NNJ? iF YOU SAID SO, YOU ARE EITHER BLIND OR OUTRIGHT LYING.

    2)WHO SAID US GOVERNMENT WILL BAIL REAL ESTATE OUT? THE BUBBLE WILL DERAIL THE LONG TERM GROWTH OF ANY ECONOMY AND SHOULD BE PUT TO REST AS SOON AS POSSIBLE.

    3)WE HAVE BUYERS, BUT THE NUMBER IS DWINDLING EVERY DAY AS PEOPLE WAKE UP AND RECOGNIZE LIES FROM REALTORS, “REAL ESTATE ALWAYS GO UP, YOU CAN’T MAKE ANOTHER LAND”, “BUY NOW OTHERWISE YOU WILL BE PRCIED OUT”. THE DAYS WILL COME WHEN REAL INFORMATION GETS MORE WIDELY DISTRIBUTED AND DIGISTED BY AVERAGE JOE. WE ALREADY SAW A CHANGE IN THE MEDIA.

    4)REAL ESTATE AGENTS ARE CRIMINALS. THEY SOLD THEIR HEART TO COMISSIONS. THEY CHEER FOR THE BUBBLE AND A LOT OF PEOPLE WILL END UP WITH A UPSIDE DOWN MORTGAGE AS A RESULT OF THE MANIUPULATION, BUSINESS FRAUD FROM REAL ESTATE INDUSTRY. REAL ESTATE AGENTS PUT A ROPE UNDER THOSE POOR JOES’ NECKS.

  17. Sapiens says:

    People like Barbara Weismann are the essence of what keeps the establishment and status quo in power. Her words are crafted with certain facts edited to suit a pernicious and ulterior agenda. If you happen to be an average person without knowledge of the technicalities of real estate, economic or monetary policy, her statements will sound credible, palatable and even soothing since they are cloaked in ostensibly true facts.

    Let me explain:

    “Because the real estate industry is the primary internal force driving our economy, the Federal Government has kept rates low and thus has fueled the market with more first time buyers.”

    “The lowest man on the totem pole is the man who makes all the others move up.”

    “we have, for the first time in history, the recognition and support by the US Government that a healthy real estate market is essential to our economy.”

    Those statements are true and they are made to sound benign and even helpful to the average person, but let’s take them apart:

    “Because the real estate industry is the primary internal force driving our economy, the Federal Government has kept rates low and thus has fueled the market with more first time buyers.”

    The creators of wealth in any healthy economy besides Nature are farmers, inventors and manufacturers. In the US the manufacturing base has been decimated, most of the essential manufacturing industries have been exported to low cost labor countries. The only manufacturing base remnant in the US is protected my intellectual property that due to the sensitivity and easiness of unauthorized reproduction must be made and kept in the US.

    So the average Joe has been sold into the “free trade is good for you” dogma, but what the average Joe does not know is that under our present economic system

  18. v says:

    From the blog post –
    “I am a realtor who’s been doing analyses of the market and projections for nearly 20 years…”

    From Barbara’s website.
    http://www.bergencountyhomes.com/meet.htm
    “For over 15 years I have been a full-time real estate agent. I am very proud… ”

    Will the real years of experience please stand up? Is it 15 0r 20? If it is 15 then you haven’t experienced the last downturn but wanted us to believe that you did. Is this part of the realtor “code of ethics”? Would Mr. Liereah approve of this?

  19. Jay says:

    Barbara sounds nice.
    But a real estate salesperson is not qualified to give any sort of economic market analysis. Their sales agenda will always cause them to spin and selectively present information to help sell the product they are peddling, taken from the “talking points” they are fed from their sales associations.

    They can’t be objective even if they want to be, their livelihood depends on sales.

    Sapiens: too bad you got cut off. It was just getting interesting…

  20. Metroplexual says:

    Barbara, thanks for the RE side input, however, I disagree.

    First, the early eighties recession was the worst recession since the depression, please get your facts straight. The current economy is a stealth recession fueled by HELOCS and cash out refis, in effect alot of MEW which was not available then like it is today. The alternative loan type animals were not part of the RE taxonomy in the late 80’s like IO loans and payment option. The crazy loans available today are used as affordability vehicles and in NJ and other high priced areas throughout the country this has been the loan of choice as people were chasing prices higher.

    Also, the economy of NJ in the late 80’s did not experience the recession of the period, that ocurred elsewhere, remember RE is local? I remember the flippers who got caught with their pants down in that development in West Windsor, when the music stopped ther ewere no chairs to sit in.

    BTW, if you want to know how healthy your economy is, talk to people in the site location business. They saw the recesion in 2001 the year prior, it was only added to by 9/11 I should know I got laid off from the industry and was able to watch the 2nd tower get hit on the Today Show, live.

  21. Sg says:

    Barbara – I think you are also right to some extent, and the same time all the folks on this board with pessimistic outlook are also correct. The truth really is somewhere in the middle.

    I have plotted chart comparing Housing values, Inflation and Income from 1977 till today. I will use that to prove the point. See the charts at following link,

    http://www.geocities.com/skgala/newark.htm

    The 2nd chart is important. In 2nd chart, I have plotted percentage of Income needed for housing. This is representative and does not consider any specific house per say.

    During all last 29 years, the worst year to buy house has been 80, 81, 82, 87, 88 & 89. There has been boom since 2000 onward, but the percentage has still not reached those previous peaks. We are getting pretty close to previous historic un-affordability though.

    But the same chart shows that though prices have been climbing since 2000, the rise has been steepest since 2004. There was no reason for that too happen, other than speculative one. Remember speculation is not done by folks doing flipping only. It was actually done by ordinary folks, who woke up late and bought houses at higher prices then required. The bidding wars basically created this speculation. Now that is gone from current market. You would see the market return to 2004 level in coming 2 years.

    The summary: The unaffordability was much higher in 80’s booms, hence down slide was severe. The recent boom got close to earlier boom, but was not as sharp upward, hence I don’t see it coming downward as quickly either. I am confident it will come down to 2004 level next year. After that I don’t think one can predict. If there is severe recession, it can go down further. If no recession, increasing income and job creation happens the prices will stabilize. Three big IFs. So if you already own or bought in last few years, pray for those 3. For first time buyers, I would say waiting at the most one year is wise, but not for 5 years for whole thing to play out. That may be too much of renting for some.

  22. James Bednar says:

    Barbara,

    I would love to read some of your past projections and analysis. Would you be able provide any prior documents or publications?

    James

  23. Al says:

    Great post, but:
    Newark – one of teh cheapest housing areas in the state
    Just one of the quotes:
    “Newark saw a continued decline in the 1970s and 1980s. Whites continued to move out of the city. Middle class blacks followed suit, and certain pockets of the city developed as domains of poverty and social isolation. Whenever the media of New York needed to find some example of urban despair, they traveled to Newark.”

    Also: median household income in 2003 was 26913!!!! yes, it is 27 thousand dolars – you plot this into the picture and housing in Newark was anaffordable in 2003 already.

    Coincidental – you are plotting Newark – is newark as bad now as it was in 1980’s and 90’s as it is now???
    Pick a better area where people actually want to live and not be aftraid to get killed on the street after dark.

  24. James Bednar says:

    Al,

    I think you may be misunderstanding the nature of the statistical measure that SG is using.

    SG isn’t talking about the city of Newark, but the Newark-Union Metropolitan Statistical Area (MSA).

    Here is a little bit of a background on what MSAs are, and how they are used:

    http://en.wikipedia.org/wiki/Metropolitan_statistical_area

    James

  25. Blow blow blow your house Down says:

    #1 you are wrong here.
    “The market crash, and yes it was a crash, of the late 80’s and early 90’s was also part of a major recession. In fact, it was the worst post Depression recession that this country experienced. Additionally, pricing was not based upon any economic fundamentals of value.”

    1973-1974 was the worse major recession since 1930’s.

  26. Blow blow blow your house Down says:

    How can you say this?

    “As a result, we had a thoroughly speculative market that was a house of cards and so prices came down to, in some cases, less than half of values held a short while before. What we have is not at all the same economic situation and there is no bubble. It may make good news copy to say it exists but there is no bubble. Another big factor then was a lack of buyers; this is not the case today.”

    SPECULATION?
    COMPARED TO EARLY 1990’S TODAY’S SPECUALTION IS OFF THE CHARTS. WE HAVE OPTIONS ARM LOANS THIS LOAN THAT LOAN ANYWAY LOANS TODAT?

    SO FAR YOU ARE CLUELESS AND YES I CLEANED UP IN THE EARLY 1990’S MESS BUT THIS HOUSING MARKET IS COMPLETELY IRRATIONAL.

  27. Blow blow blow your house Down says:

    FYI INTEREST RATES FELL FROM 9% TO 6% IN the EARLY 1990’S AS REAL ESTATE PRICES TANKED.

    “Let’s also not forget that 12-15 years ago when this all happened,interest rates were more than double what they are today. Another hugely significant difference. Interest rates for home mortgages were double digit for nearly 20 years. Because the real estate industry is the primary internal force driving our economy, the Federal Government has kept rates low and thus has fueled the market with more first time buyers. The lowest man on the totem pole is the man who makes all the others move up.”

    Real estate is overrated as an economic driver. What does some flipper buying a house and flipping it for a little profti do to the competiveness of our economy with the rest of the world?

    Some could argue that the Internet bubble had more value to our economy than this real estate bubble. This includes me!

    Moving money around buying and selling homes imo does absolutley nothing to make our economy more copmpetitive. Investing in technology enhancements does.

    The bottom line is buyers are priced out.

  28. Blow blow blow your house Down says:

    “What we have is a market where you will find 40-50% of the homes over priced”

    Out of what hat did you pull 40-50%?

    I would say the majority of real estate in NJ is over priced!

  29. 2008 Buyer says:

    Great posts. Did not know that condos were more severely affected in a down market that residential homes. I would definitely agree that the market is slowing down and if you are considering buying, its best to wait at least a year or two. There are plenty of new construction condo projects happening in the Northern NJ and even in Manhattan and Brooklyn that will be completed in 2007 or 2008. What will be the effect on these projects if the the market is slowing? Will they lower prices? I’m a potential buyer in 2 years.

  30. factsrule says:

    Well I remember this well. had a family member, purchased a co-op in Scarsdale in 1989 for 125k, sold in in 1992 for 52K.

    In my town in Bergen county 1 bed room co-ops were selling for 125k-135k at the height of the last bubble, you could purchase them in 1992 -93 for 25k all cash. This really happened for all of those who say it did not, including Ms. Weissman, surely if she calims to have been around for 20 years she would remember this.

  31. Blow blow blow your house Down says:

    “So, we do have people out there buying homes (we didn’t before), we have single digit interest rates (we didn’t before), we have a market that is receding from over heated and NOT speculative pricing (as we did before) and we have, for the first time in history, the recognition and support by the US Government that a healthy real estate market is essential to our economy. Bubble? With buyers? Absolutely not.”

    Bubble yes Absolutley.

    This woman presented what facts?

    “we have single digit interest rates (we didn’t before)”
    Yeah well prices of houses of gone up 2 3 4 times income increases for to long and so what interest rates are low?

    You seem to forget that property taxes , utility bills and cost of living continue to escalate. Money doesn’t come out of thin air barbara especially when the median income in NJ has remained airly staganate the last 5 years.

    Common sense says that it does not compute. Of course real estate only goes up cuz D Lereah says and all you slick talkers say so.

    No Condos got pummeled in early 1990’s and so did houses. I believe you are so out of touch with the common person that you need to take some time off from thepropaganda you are surrounded by.

    BOOOOOOOOOOYAAAAAAAAA

    Bob

  32. UnRealtor says:

    “Remember speculation is not done by folks doing flipping only. It was actually done by ordinary folks, who woke up late and bought houses at higher prices then required. The bidding wars basically created this speculation. Now that is gone from current market. You would see the market return to 2004 level in coming 2 years.”

    Great point, Shailesh. This describes 18 Meadowbrook Rd above.

    But we apparently don’t have to wait two years, as he already sold below what he paid in 2004 ($45,000 + $35,000 realtor fees + mortgage interest = $100,000 loss minimum).

    It seems we’re at 2004 already, and heading to 2003. The market is really dead, and I wonder if prior slowdowns have been this abrupt. The reason this time is ‘different’ in its speed (if this bust is indeed proceeding faster than previous busts), is likely the Internet, with its access to MLS data and forums such as this blog.

    People were kept in the dark during previous busts, and despite the best efforts of realtors to keep people in the dark this bust, the Internet is too powerful an outlet to contain.

  33. Blow blow blow your house Down says:

    How does buying and selling real estate make our economy more competitive?

    It has hurt our economy! Wasted activity and money pouring into upgrading some shack to try to flip.

    How has this improved our education?
    How has this improved our productivity?

    The real estate industry sits up on their pedastal and babbles BS.

    BOOOOOOOOYAAAAAAAAAA

    Bob

  34. SAS says:

    well Barbara my dear, you have alot of guts to come onto this blog and wrote what you wrote.

    Assuming you don’t have alternative motives, I think you wrote a good, and honest piece from your perspective. But, with all due respect, I think your perspective may not took into account other factors that can influence RE and RE markets.

    Where to pick it apart? wow, there are many holes.

    But lets just sum it up in a very simple way:
    There is a huge arbitrage gap between renting and buying. And in a declining market, it makes no sense to buy until that gap narrows. The hard part is knowing how close that gap will come together and/or will it inverese.

    You can argue to the cows come home the factors that have contributed to the gap, but its there. Also, as the gap closes, its up to the individual to know when that moment is right for them to buy.

    All this other talk, your just pumping alot of tane.

    I hope that made sense, for I haven’t had my morning coffee yet because I ran out of beans, off to Starbucks I go.

    Also, one last point.
    “Because the real estate industry is the primary internal force driving our economy, the Federal Government has kept rates low and thus has fueled the market with more first time buyers”

    It is or was manufactoring that is the driving force behind the economy, but that is disappearing. So, we are now having credit to replace what was once a good middle class maufactoring, which was the backbone of the US. In order to keep things afloat, we need cheap credit to make this work. As a result, easy money found a home in RE because during the dot com bubble, it left a bad taste in mouth for Wall Street. People felt it was a “good, long term investment”.
    But like anything, you gotta do it first, before the herd and mania sets in.

    I know, I left alot out too, but you get the point.

    In any case, off to Starbucks.

    SAS

  35. Blow blow blow your house Down says:

    “People were kept in the dark during previous busts, and despite the best efforts of realtors to keep people in the dark this bust, the Internet is too powerful an outlet to contain.”

    Very very important difference between today and early 1990’s.

    BS propaganda like this could be spewed all over the place but there was no forum or outlet to counter it.

  36. Blow blow blow your house Down says:

    NO REBOUND IN SPRING 2007. SPRING 2007 BUST!

    Sorry Barb but a few more lean years ahead for you.

  37. SAS says:

    Grim, you should move this thread to the top, I think it would generate some really interesting comments.

    SAS

  38. James Bednar says:

    Did not know that condos were more severely affected in a down market that residential homes.

    I’m not sure we can make that statement. It is very difficult to apply a similar analysis to single family houses.

    jb

  39. James Bednar says:

    Since this thread seems to be seeing the most action today, I’ve moved it to the top of the page. This will remain sticky at the top today.

    jb

  40. Blow blow blow your house Down says:

    “Real estate is overrated as an economic driver.”

  41. Blow blow blow your house Down says:

    Pychology has plays a huge role in this market. Barbara’s purpose is to try to convince Buyers that going into debt slavery is worth it because everyone makes money over time in real estate. She does fail to mention that after early 1990’s housing bust it took people 10 years to break even. 10 years to breakeven. If you had to sell at some point in this 10 year period you may have been down 50% if you owned a condo or Co-op. it was less severe for housing but 20-25% down was fun either.

    This is the biggest baddest “credit” bubble ever. So when it busts it gets really ugly. The housing bust has started, but the we haven’t seen the worse yet. The later stages of a bubble bursting are the ugliest. It’s miserable!

  42. chicagofinance says:

    BABS: talk about throwing chum in the shark tank!

    Thank you for your perspectives.

  43. lina says:

    This is a bit off topic, but would like to ask an opinion regarding specific markets within NJ.

    I am looking to buy something in Maplewood; do you all have any insight about Maplewood as a specific market? I seem to be finding that Maplewood may operate slightly differently in this market – homes in the $300-$400K range seem to be selling close to list price given that this town is desirable from a diversity, transportation, etc.

    Thoughts?

  44. Jamey says:

    Note: This is a repost of an older comment.

    Hey, how about them Red Sox. I think they’ll beat the Cardinals in five and win their first World Series since 1918!!!

  45. UnRealtor says:

    Maplewood: Insanely high taxes + mediocre schools.

  46. twice shy says:

    Hat’s off to Barbara for providing an opposing viewpoint. As if we don’t get enough of it from the cheerleading media shills w/ vested interest in pumping this bubble higher. I do think we should continue to welcome opposite views and resist namecalling. Keeps us all on our toes.

    I can testify that I bought in 1988, which I thought was a good move as the market was beginning to slow. I finally broke even in 2000 have years of aggravation. That breakeven calculation doesn’t take into account inflation or interest paid. Sometimes I think all these happy owners lose track of the money they’ve forked over in interest.

    So, once burned, I’m …
    ts

  47. James Bednar says:

    The 10Y has been surprising over the past 5 days..

    jb

  48. SAS says:

    “I am looking to buy something in Maplewood”

    Why are you buying? Do you want to lose more money? If you want to throw money away, can you please throw it in my direction so I can pick it up off the floor.

    RE is overpriced, what you buy today will be worth at least 5-10% next year, this trend most likely will continue for 3-5 years. ouch, thats alot of money. So please, throw it my way because I can think of alot better things to do with it.

    But anyway, Maplewood is an ok town, but next to oranges. Oranges are shit. Therefore with the decreasing values in RE, its only a matter of time before Maplewood will be shit too because with lower RE prices comes the rift raft. Not to mention, it has very high RE taxes.

    wow, increasing property taxes on a depreciating asset…good smart move ;)
    thats like buying a new car with a 7% interest rate loan, but let me guess…since its a Toyota “it holds its value”.

    oh brother….
    SAS

  49. Richard says:

    nice to see barbara’s response here instead of bubblemania all the time. what it think is hard to fathom going forward that will affect prices is the MEW effect. is this a permanent part of today’s landscape or will things revert back to history where people didn’t touch their equity until retirement? look at what’s happened in the car business with leases. leases should only be used if you can write it off and you plan on rolling the car over every couple of years. today almost everyone leases and considers the monthly payment like mortgage or property taxes, you’re always going to pay ‘the monthly’. sure those that bought recently can’t do MEW but there’s plenty of folks out there with equity to tap still.

    i think credit looseness and MEW will be the key determining factors on how prices hold up (or not).

  50. twice shy says:

    re: 10Y bond move.

    bonds are selling off hard at all durations.
    could be a rotation into stocks as the market rallies. anyway, wait ’til the move translates into the weekly mortage rates. just in time for winter. Fed may be on hold, but the bond ghouls are not. happy halloween.

  51. lina says:

    Well, I’m looking to buy because I’ve been renting for 10+ years, and would rather put my money into a house at this point, than continue renting.

    I don’t expect that we’ll need to sell in the next 10-15 years, so I figure that we’ll come out ahead. We are waiting to put in our next bids in Nov/Dec, so that we can use the holiday season slowdown to negotitate down price. Anything we buy will not be at list price. We’re trying to find the right seller who is desperate to sell their property, and will go in and low ball them!

  52. James Bednar says:

    Could a resumption of rate increases be on the table?

    Fed’s New Growth Estimates Might Lead to Higher Rates

    Federal Reserve policy makers opened confidential briefing books at their Aug. 8 meeting to find disturbing news between the green covers: Their assumptions about economic growth and inflation may be too optimistic.

    The Fed’s number-crunchers, rushing an analysis based on data that arrived about a week before, threw out previous conclusions about how fast the economy can grow without fueling inflation. They concluded that the speed limit is lower than previously thought — and they lowered it still further in the “Greenbook” for the September policy meeting.

    The staff’s revisions, reflected in minutes of the last two meetings, shake the foundations of the fast-growth, low- inflation economy Americans enjoyed from 1995 to 2005. The implication: Unless the economy slows more than the Fed now expects, the central bank may have to resume raising interest rates sooner rather than later to control inflation.

    “The tide is shifting,” says David Greenlaw, chief U.S. fixed-income economist at Morgan Stanley in New York. “I do not think the Fed is out of the game just yet.”

  53. 2008 Buyer says:

    The perfect storm in the making…its estimated that over a trillion dollars in ARM loans will be resetting in 2007. It could also be argued that by nature, purchasing a home with a ARM is speculation. You are speculating when it time for the rate to reset…… that you can pay the higher rate, your house would have appreciated considerably, you can easily refi in another loan. What are these people going to do? Refi into a fixed (hope the house appraises higher), pay the higher mortgage payment (if you were not stretched before, you will now), be forced to sell in a declining market, or go to foreclosure. ARMs serve a purpose and are a perfect product for the financially savvy when used correctly. Couple all those factors with buyers sitting on the sidelines. I don’t know the history of the area but I do know there are a lot of factors happening now that really wasn’t the case before …2007 will indeed be very interesting to see. On a brighter note, I saved a lot of money on my car insurance by switching to….

  54. UnRealtor says:

    “I don’t expect that we’ll need to sell in the next 10-15 years, so I figure that we’ll come out ahead.”

    Bad assumption. That’s common realtor spin.

    Have you been reading story after story here about people selling after 10 years at a loss? Even if you “break even” you’re taking a loss after paying a decade of mortgage interest, and transaction fees, etc.

    Look at this chart, do honestly think in 10 years you’ll “come out ahead”?

    http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif

    We’re coming down from a 100-year-peak, and if you buy today, buy with your eyes open that you’ll almost certainly lose money in the next 10 years. If you’re OK with that prospect, then now is a “good” time to buy.

  55. lina says:

    Does anyone konw if there is an otteau report available for Q3 2006?

  56. SAS says:

    Market timing is everything. WHo cares if you rented for 10 years or 25 years. It all depends on when you buy your house, and what it will be like in the future.

    Present time = decline.

    wait it out. You have already rented for 10 yrs, whats another 2? Raise cash, because renting is cheaper than buying (arbitrage gap).
    When you raise cash during the next few years, watch for the “gap” to narrow, then make your move. You may save ALOT more money, get a nicer house in a nicer town, or you might decide to move all together because RE taxes are just way….way too high and realize NJ is for the birds.

    Also, I suspect you are making an emotional decision. Making an emotional decision with money, you will get burned each and everytime.

    SAS

  57. James Bednar says:

    I think I did a piece on renting as arbitrage a few months back.

    jb

  58. 007 says:

    Unrealtor, SAS, et al,
    Need your opinion on this:
    Thinking of moving from a TH to a SFH. Seems to me that now (or 2007) is the right time to move as the TH will decline faster than the SFH. Any suggestion welcome.
    007

  59. metroplexual says:

    CF,

    That is an excellent explanation of arbitrage. Thanks!

  60. SAS says:

    Shytown… bingo…

    Now, for you renters whom want to make the jump, replace hot coffee and cold coffee with rent vs. buy and you will begin to see the light.

    SAS

  61. 007 says:

    CF,
    Would you mind to give a similar talk on the inverted yield curve. How can the bond trader aniticipate a slower growth in the coming months/years? Thanks,
    007

  62. UnRealtor says:

    007,

    (great nic)

    You’re suggesting:

    Condo => House

    It might be a good move to try the following:

    Condo => Rent 2 years => House

    To ditch the condo, list for 10% below recent comps, and drop your equity into somewhere safe, earning interest, until you’re ready to buy a house. The interest income will offset your rent, or eliminate it altogether depending on your level of cash.

    My $.02, take it for what it costs. :-)

  63. Al says:

    The only problem with rent – landlords can not raise rents significantly without loosing certain % of tenants – should I tell you that in 50 apartments complex loosing 2 tenants eats out 4% increase in rent (in reality more due to utilities and teh fact that maintenance costs do not decline), so without proportionate raise in salaries rents are fixed. (right now average delinquency(late payments, etc rate in mid to low priced apartments are at about 13% – which is really high)

  64. Al says:

    So when you are replacing Hot cofee with rent make sure to fix the hot cofee price

  65. Blow blow blow your house Down says:

    Great post otis Worthy of repeating.

    otis wildflower Says:
    October 23rd, 2006 at 12:36 pm
    Fun with Condos:

    http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20060623/NEWS/606230346/-1/NEWS01
    http://www.delawareonline.com/apps/pbcs.dll/article?AID=2006610160321

    Something folks don’t consider when they buy condos, “Special Assessments”…

  66. Jamey says:

    Note: This is a repost of an older comment.

    Is there any truth to the rumor that President Abraham Lincoln was shot last night at Ford’s Theatre? I’ve tried consulting my local broadsheet, Frank Leslie’s Illustrated, and Harpers, but could find no details of this tragedy.

  67. SAS says:

    “Thinking of moving from a TH to a SFH. Seems to me that now (or 2007) is the right time to move as the TH will decline faster than the SFH. Any suggestion welcome.”

    You my friend, are unique, and in a pickle.

    In my opinion, the velocity of the decline in townhouses will be great, and in the next few years, they will be a dime a dozen. I would sell it, and move into a SFH (in another state). You will make bank, if you stay in NJ, you will just make a lateral move.

    Just one opinion, wonder what other fellow bloggers have to say??

    SAS

  68. twice shy says:

    I do think a case can be made for a 20% + lowball this Nov.-Dec. If you find a motivated seller, and I believe there are a few, you might make a deal.

    The question is can you really hold for 5 – 10 years? There are a lot of unexpected things that can happen, and should something occur before that minimum five years is up, you may find yourself in a bind.

    At least a buyer who follows this blog is more educated than others who might wish to step in. I’d say a purchase that closes in 1/07 is certainly better than 9/05. Is there risk? Sure. Do better opportunities lie ahead? Maybe. I guess all of us prospective buyers have to decide the risk/reward ratio for ourselves.

  69. SAS says:

    “Is there any truth to the rumor that President Abraham Lincoln was shot last night at Ford’s Theatre?”

    lol, now thats some funny shit.

    btw- the cause of the civil war had nothing to do with slavery, it had to do with trade routes between the North & South and whom would profit from it. Another way, history has been changed to make America look like we are some kind of gentle giant who is against slavery.. Yeah, right.. if we are so much against slavery, why do we shop at Wal Mart and buy clothes at the GAP.

    anyway, back to RE.

    SAS

  70. lina says:

    Ok, so let me ask you guys another question.

    In terms of buying, do you think it makes more sense to buy small, and plan on adding to the footprint of the house in the future, or to buy a larger home for slightly more money? Is there any impact to this decision based on the way the market is these days?

  71. bergenbuyer says:

    All,

    I wanted share an example of a house that was purcahsed in 2002 and just sold, when tkaing into account everything, they may have lost money. I find this pretty amazing since they were in the heart of a major run-up in house prices.

    Purchased 2002 – $680K
    Sold 2006 – $800K

    On the face, you’d say they made $120K, however when you look at expenses that a renter would not incur they’re right at break-even:

    Realtors Fee $40
    Taxes (approx 4 years worth) $40-$45K
    Septic Replacement $20K

    That’s $100K I’m positive they paid. There’s only $20K left. They also did the following:
    partial redo of kitchen
    partial redo of 1 full and 1 half bath
    included like new appliances (upright laundry, stainless kitchen, etc) in sale at $800

    I don’t know the exact price tag of the above items, but it seems like $20K is reasonable.

    If they put 20% down($136,400) then their mortgage prin was $545,600. If they got a 5 yr ARM, they maybe had a 4.5% rate. That’s a monthly pmt of $2,764 (about $800 of prin and $1900 of Int each month). In the 4 years they owned the home, they would have paid $95K in interest and $37K in Prin, so their loan balance was $508 when they sold in 2006. So maybe they made $37K?

    Could they have made $37K off of their down pmt in a MM acct? Probably not that much since rates were very low, but maybe like $20-$25K. However, if they had a 7% return on the $136K, they would’ve made about $37K.

    Could they have rented a similar house at that price or lower? I’d say yes in 2002/2003, no for 2005/2006. It depends, tough to say.

    I’m not going to talk about tax deductions as I don’t know their AMT situation.

    When all is said and done, they’re about breakeven. So all it took was 1 period of slumping sales (2006) to unwind all of those gains from 2002 until 2005 they thought they had. They may not have lost money and may have done about the same or maybe a little better had they rented, but I think it’s a good example of a non-grubbing non-flipper seller that wasn’t trying to make a quick buck and got out right around break-even.

    I thought I’d share as it was tough for me to decide to rent and even tougher to convince family and friends to get off my back about renting. When I explained this situation to them, they finally backed off (a little).

  72. SAS says:

    bergenbuyer,

    good work.

    SAS

  73. Al says:

    “Thinking of moving from a TH to a SFH. Seems to me that now (or 2007) is the right time to move as the TH will decline faster than the SFH. Any suggestion welcome.”

    I’d say put a contintgency in you buying contract and base your purchasing price on what you can get for your townhome – you will need to pay extra so just determine your limits and go ahed – if something do not work out – you still have your home. If you want to make a lot of money sell high now (if you can) and buy two years later.

    Hoever there is something else which put’s it all in a perpective:
    I say that the only way our economy can survive right now is if there would be a period of very high wages inflation ( i mean ome on all taxes which are collected this year will be spent paying off INTEREST only on the external national debt!!!!!!!!!!) – so far there was a period of very high wages inflation in upper class but not middle-lower paid spectra.

    So if there would be a period of high inflation we will efectivelly shrink our national debt by screwing India and China – they will never trust US again with easy money – but it will be for the best as rich people here would have to start creating jobs since noone will want UD dollars anymore.
    I know, that would mean that we would have to start working istead of selling homes – what a new concept.

    So sitting on cash (CD’s, goverment certificates) is dangerous – with let’s say 20% inflation for 2 years you will loose 40% of you purchasing power. If you want to play it safe -stay in your townhouse untill the dust settle – 5-10 years from now. And do not tell me that it never happened in US.

  74. Blow blow blow your house Down says:

    You can only answer those particular questions yourself.

    worth repeating again. 20% off of asking is no deal. 20% off of 2005 peak prices is
    okay. But better be aware that prices on condos fell 40-50% in early 1990’s.

    look at it this way. someone asking $400,000 for a 2 bdrm condo drops 40%. or $160,000 to $240,000. So you get off 20% or $320,000 Can you accept being down $80,000 at some point?

    The prices for condos and houses are simply to high vs rents vs incomes. You want to buy an overpriced living space go ahead there is plenty of overpriced bloated houses.

    You don’t have the patience to wait keep the pacifier in and bid away. Do NOT blame anyone else but yourself if you are stuck in an underwater position.

    Just take a look at KO stock price. All i heard in 1997-1998 own KO own KO. I said it’s to pricey It’s to pricey, but everyone LOVED IT!

    Now look at it. It peaked in 1998 at $84 a share and is only $50 today. This company has grown it’s sales and revenues over these past 8 years, but it was OVERPRICED!

    houses and condos are overpriced. Go ahead listen to Barb. Do you think she gives a damn about you and your situation?
    Many I know that own houses or condos admit they are overvalued. Some say they are 20% overvalued others so 40% overvalued.

    i think 30% off of 2005 peak prices myself should takes us down to fair value.

  75. Blow blow blow your house Down says:

    a $350,000 house in 2000 now 2005 $700,000.
    -30% is $210k.

    $350,000 – 2000
    $367k – 2001
    $386k – 2002
    $405K – 2003
    $425k – 2004
    $446k – 2005
    $469K – 2006 This is reasonable value.

    5% compounded annually.

    I don’t give a damn what the fool paid in 2004 or 2005 or 2006. It’s their problem. They over paid! Like the Fool KO investors did in 1997-1998!

  76. Richard says:

    if you’re buying in maplewood in the $300-$400k range you are either in or very close to the ghetto being next to irvington or south of springfield avenue. yuck. if you want to live in the nice part it’ll cost you $600k.

  77. chicagofinance says:

    CF,
    Would you mind to give a similar talk on the inverted yield curve. How can the bond trader aniticipate a slower growth in the coming months/years? Thanks,
    007

    we aim to please…..
    http://www.njrereport.com/forum/viewtopic.php?t=65

  78. UnRealtor says:

    Al, you’re suggesting he stay in a condo in what will certainly be the greatest real estate bust in history, as a safer bet than FDIC-insured @ 5%?

    Have to disagree…

  79. lina says:

    Well, I’m trying to find a place around Orchard St or around Union/Hudson.

    Familiar with those areas?

  80. James Bednar says:

    From Marketwatch:

    Mortgage originations fell 16% in first half of 2006

    Mortgage originations fell 16% in dollar terms in the first half of 2006 from the second half of 2005, even as exotic-type mortgages such as those offering interest-only payments gained in popularity, the Mortgage Bankers Association said Monday in its semi-annual industry survey.
    Based on loan count, the drop was 18%, the MBA said. The mortgage-industry group only uses information from companies that reported data in both comparative periods.
    The drop was due to a “significant” 10% decrease in home purchase volume and an even larger 22% decrease in refinance volume, it said.

  81. L.I. Real Case Scenario says:

    First of all, I do love the blog, and agree that we’re in the beggining of a MAJOR readjustment in the market…

    On that, I wanted to leave a real case scenario to see what kind of opinions I can gather (did we do the right thing? should have waited? kind of a response)

    NEW HOME PURCHASE – UPSCALE LI HAMLET

    Listed since early 2006, this beautiful home decreased in listing price at regular intervals until mid-July as follows:

    $1.495M (probably way too high)
    $1.299
    $1.269
    $1.199
    $1.100 Shown “one last time,” or it would be taken off the market kind of Real-Estate-ho talk

    Offered a “non-contingent,” absolutely-close by August (30 days), $950k… which was taken (!?)

    Financing as follows 20% cash (again non-dependent on sale of current home), 40% Fixed 30Y, 30% drawn from HELOC on excess Equity based on appraisal ($1.2M !!, the world is nuts!)

    SALE OF OLD HOME – MIDDLE CLASS LI HAMLET

    I had Equity in it of about 75%

    Listed through RE proffesional (what a joke!) in mid-July.

    $519k (probably too high, although things HAD sold at $505k 3 months before)
    $499k (2 weeks later)
    $479k (1 month later)
    $449k (1 month later, fed up)

    Sold at $449k (100 days in market)
    Note: all comps still sitting there at $479-$499 range

    Used my share of sale proceeds to pay-off (completely) HELOC balance on new home.

    End result:

    Living on new home with 60% Equity, and available HELOC piggy bank (untapped) of 50% purchase price more

    Per Zillow — value of new home July-October down 25% (now it shows only slightly higher than what I paid for it, have sseen it show 10-15% higher)

    Gave away $45k cash to RE “vampires” (assessments, commissions, fees, lawyers, title insurance)

    Reduced “free cash” position by $200k (new home down payment)

    But again truly happy with the step-up in home characteristics/ living.

    Obviously, in terms of sound financing standing I think we are more than fine, but my question is whether in a downspiral we’ll be kicking ourselves in the nuts down the road….

    Your opinion?

    PS First post, be gentle.

  82. Jay says:

    It’s quite odd how Barbara’s post makes the exact same points as my realtor’s email did when I inquired if they thought that this was going to be a crash like the 80’s.

    I don’t think you will see Barbara addressing any of the points made in rebuttal posts. Her expertise appears to be limited to communicating the canned talking points, and she is not equipped for debating economics and market dynamics.

    While no one can predict the future with certainty, the record of realtors and their sales association in forecasting this market’s direction has been horrible. They have been consistently wrong and suprised by their own numbers, and have no credibility in going forward.

  83. Al says:

    I think I am wrong, since there will be no increase in salaries and out quality of life will diminish instead. That was wishful thinking about sending our debt off and making china/india other asian countries to pay for it.
    However if wages do not grow there will be a bust and prices will drop even below 2002 levels due to a lot higher taxes,/medicare/food prices.

    I am very upset with our goverment telling me that food priced to not increase or increase at 3%/year. I go to grocery store regularly and can tell for myself – I have less and less money left after my paycheck every month, and I do not change my spending pattern. So every month I can pay less and less for housing and taxes are rasing as far as I hear.

  84. Richard says:

    LI buyer, you are playing with equity built-up in another house so while money is still money your downside is less risky. if you bought the new house using ‘earned’ cash i would say you’d be more pissed if things head south. most here would chastise you for not renting the next 10 years and sitting on that cash in a MMA but that just isn’t realistic. sure people could do it but for many circumstances it’s not compatible with needs and wants, so worse case scenario if the market hit the skids and the value of your house dropped to what equity you had built up in the original house close to breaking even.

  85. 007 says:

    UnRealtor, SAS, Al,
    Thanks for the opinions. My perfect plan would be to rent for two years and buy at that time, but this is NOT an option as the other half already complaint about the need of the better house. I do have long term planning of at least 10 years in NJ due to different situations/constraints. So if I buy next year, the loss would be not that big. As I said in this pass open discussion, seller still asking for 2005 prices. I hope the condition will become better next year. And of course, I will be the seller and buyer at that time, I hope I would have a better understanding of the market.

    CF,
    Thanks for the link, I will try it later today.

    007

  86. Seneca says:

    Per a plug on NBC this morning, the NBC Nightly News will tonight be doing a story on the housing bubble and the lengths that some sellers are going to in order to sell their homes. Watch it tonight if you are home.

    In other news, with all the talk about the rent vs. buy decision being so one-sided these days, I decided to try out the Rent Vs. Buy calculator that Century 21 makes available on their website.

    http://www.century21.com/learn/calculators/rent_vs_buy.aspx

    They don’t really explain any of the algorithms behind this little tool but I am sure it is ‘ethical’. Here is what I plugged in:

    Rent – assume $1,000 a month in rent at a 3% yearly increase
    Buy – 700k home with $100k down, 6.8% loan for 30 years. 28% tax bracket, home value will appreciate at 2% a year, 12k a year in property taxes. Plan to live in home for 5 years.

    The results tell me that I will SAVE, yes, SAVE $15,205 by BUYING instead of renting! I almost fell out of my chair. What kind of voodoo math are they using? (Maybe they went to a school system where advanced math was optional.)

    They don’t bother adding any caveats about closing costs, maintenance, PMI, selling costs at the tail end, etc. Can someone please explain to me how this is ethical? I was expecting it to spit out that I was better off by at least $50k by renting.

  87. lina says:

    I am full of questions today – can someone provide me the selling details (last 2 or 3 sales) on the following MLS: 2328520.

  88. Blow blow blow your house Down says:

    L.I. Curious, what are the taxes on new house and the old house?
    What about utility expenses?
    What about maintenance?

  89. SAS says:

    Lina,

    You are getting good at getting something for nothing.

    SAS

  90. Al says:

    To seneca

    I do not know but I got this numbers:

    Based on the information you provided, the following represents your costs and savings over the next 30 years.

    Estimated costs of renting: Details$136,800

    Estimated gross costs of buying: (includes $3395.92 in closing costs) Details$695,300

    Estimated amount of tax related savings: Details$196,955

    Estimated amount in increased equity: Details$272,218

    Estimated net costs of buying: Details$226,126

    Estimated total savings: (not including investment related savings) Details$0

    Estimated investment related savings: Details$-7,146

    So it is not profitable (Iput only 50K dowpayment.)

    Now whats interesting:

    the calculator here gave me this # (with all identical parametrs as the realtors web site)

    Result Returned: Rent Buy
    Price of Home After Appreciation: $853,296
    Remaining Balance After Years:
    Equity Earned:
    Tax Savings (at 28%):
    Avg. Monthly Payment Over Time:
    Total Payment:
    Total Savings On:

    ——————————————————————————–

    Note: The calculator above uses these items in its calculations: private mortgage insurance, homeowner’s insurance cost, loan closing cost, cost of selling a home, property tax, homeowner’s tax saving, and rent increases. Calculator results are estimates only.

  91. lina says:

    I don’t have much in the way of offering here on the board… that’s why I’m here!

    If anyone needs yoga instruction, or cooking classes, I will gladly offer in exchange for real estate information & advice!

  92. Richard says:

    orchard, union and hudson are all well east of valley and right near irvington where they do drive by shootings as gang initiations. do yourself a favor lina. take a half mile drive east of where you’re looking and tell me if you’re comfortable being that close to the ghetto. also the clinton grade school has been on the decline and continues so presently. if you still decide to buy, be mindful of the robberies, they’re quite heavy in those parts due to your proximity to the bad area.

  93. Seneca says:

    Barbara Weismann, what do you think of tip # 10 in this list of “Ten Tips to Improve your Selling Karma”

    http://newjersey.craigslist.org/rfs/224645265.html

    Are unethical practices good for realtor karma?

  94. lina says:

    Well, 2 blocks from me in Brookly are the projects, and things sell at 3MM+ in my neighborhood. It’s all relative. I’m not living IN the ghetto, so we’ll be okay. The area around these homes are very pretty, IMHO. I just agree with the rest of the world and think they are overpriced.

  95. Al says:

    Sorry cut me out:

    To seneca

    I do not know but I got this numbers:

    Based on the information you provided, the following represents your costs and savings over the next 30 years.

    Estimated costs of renting: Details$136,800

    Estimated gross costs of buying: (includes $3395.92 in closing costs) Details$695,300

    Estimated amount of tax related savings: Details$196,955

    Estimated amount in increased equity: Details$272,218

    Estimated net costs of buying: Details$226,126

    Estimated total savings: (not including investment related savings) Details$0

    Estimated investment related savings: Details$-7,146

    So it is not profitable (Iput only 50K dowpayment.)

    Now whats interesting:

    http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH

    the calculator here gave me this # (with all identical parametrs as the realtors web site)

    Result Returned: Rent Buy
    Price of Home After Appreciation: $853,296
    Remaining Balance After Years: $536,785
    Equity Earned: $316,511
    Tax Savings (at 28%): $157,388
    Avg. Monthly Payment Over Time:$1,268 2,679
    Total Payment: $152,160 $321,508
    Total Savings On: Renting: $169,348 (now we need to change the income tax bracket to 36% (8/28= 29% higher tax savings, let’s say 210K) Still, over 100K savings for renting vs buying.

    ——————————————————————————–

    Note: The calculator above uses these items in its calculations: private mortgage insurance, homeowner’s insurance cost, loan closing cost, cost of selling a home, property tax, homeowner’s tax saving, and rent increases. Calculator results are estimates only.

    Disclaimer: I put the rent as 1140$. Just so you know, Now you have to realize that it is impossible to rent 700K house for 1140$ Also none of these calculators uses correct data for loan closing costs and maintmance fee’s are never included.

    however OVER 100K DIFFERENCE BETWEEN TWO SITES IS ALARMING AS WELL AS “COINCEDENCE” OF SITE WHICH FAVORS BUYING BEING A REALTOR SITE.

  96. Al says:

    JAMES IS IT POSSIBLE TO DELET MY POST #92 as well as this post???

  97. Jamey says:

    Note: This is a repost of an older comment.

    I heard something this morning from the town crier’s goodwife about Fr. Luther posting approx. ninety or so theses on the door of Worms cathedral. Can anybody out there (who knows a literate cleric) please post a link to the contents of Luther’s manifesto? I know the Internet won’t be around for at least another 400 years, but I might not get a chance to watch the news tonight.

    Thanks!

  98. njresident286 says:

    I finally took the plunge –

    and after living in my apartment for 3+ years I decided to paint this weekend! It was my way of telling everyone in my life to leave me alone about a house and I am staying put for at least 2 more years. My fiance’s family thinks we are crazy, but we spend 12.5% of our total income on all of our housing related bills.

    I really think in 2007 and 2008 there will be deals to have, and you will need cash in hand to get them.

    I have a great idea for a website, called bailmeout.com where people will be able post their house and how much they owe to allow people with ash to come in and buy them out before they forclose. I think a lot of these resetting ARMS being held by young people who are not even in their 30’s yet will cause a mass panic.

  99. L.I. Real Case Scenario says:

    To Blow blow blow your house Down:

    That’s the funny part, even the “value” of new home is more than 2x old one, costs you mention are not doubled:

    1) Taxes:

    Old 9k (Nassau)
    New 13k (Suffolk)

    But do note, my commute to NYC hasn’t changed (both at either side of border)

    2) Utilities

    Old — Oil
    New — Gas…. about same

    in electricity I am shelling out about $100+ more a month though

  100. RMB says:

    That idea was taken last year.. There was an article in Busness Week? about it.. I think it started in Florida.

  101. Sugee says:

    This is the price history (rough) of an apartment complex in my viscinity in the middlesex county, info gleaned from taxrecords.com. The complex I think came up in the early 80s. I dont know what they originally sold for. All apartments are the same in size and layout, there is of course price differences for location – 1st, 2nd or 3rd floor.

    Year – Price (in K)

    1984 – 70s
    1985 – 80s
    1986 – 100s
    1987 – 120s
    1988 – 130s
    1989 – 120s
    1990 – 120s
    1992 – 90s
    1994 – 80s
    1996 – 80s
    1997 – 70s
    1998 – 80s
    1999 – 90s
    2001 – 120s
    2005 – 250s

    If one wants to make some comparisons (not fair, everything is different everytime, different world, different happenings, but the tempation to compare is irresistable), may be 2005 was the 1988. 2006 is the 1989, the pause and the teeny-weeny pullback. Will the forthcoming years follow 90, 91 and so forth ?

  102. Seneca says:

    Al,

    The 100k difference is rent vs. buy output is alarming and of course, its no coincidence that the math used with Century 21 will tell you to buy even with the lopsided rental price vs. housing price. Obviously, the $1,000/month rental won’t be on par with the 700k house in terms of lifestyle. The point here is that if you are living in a shabby Woodbridge, NJ $1000 a month apartment and long for the benefits of a SFH, you are going to input your numbers into this calculator and think its a no-brainer. Even though you can’t even afford 20% down. I just don’t see how they have the nerve to not bother with all the added expenses that go into owning a home. I would say that they must think people are stupid but given the increase in foreclosures lately, I guess people really are that stupid.

    By the way, I didn’t mean to insult Woodbridge, NJ. There are some lovely apartment homes and single family homes there. I just know you can rent an apartment there for $1,000 a month and it won’t be THE nicest.

  103. Al says:

    I went even further and plugged following numbers:

    Current Rent: 1230
    Purchase Price of Home: 350
    Percentage of Down Payment: 10%
    Length of Loan Term (years): 30
    Interest Rate: 6.8
    Years You Plan to Stay in This Home: 10
    Yearly Property Tax Rate: 2
    Yearly Home Value Increase Rate: 2

    And I got: it is better to buy by ..1100$!!!!!!!
    (how much is the interest at let’s say 5,7% on 35K downpayment during those 10 years??? I can tell you – 26K). so you are better off by 26K renting 12304/month that buying (thats under assumption that your rent increases with the same speed as hosing prices – 2%).

    So it is still better to rent than to buy, And we know what house 350K would buy you right now.

  104. Richard says:

    >>I’m not living IN the ghetto, so we’ll be okay

    you aren’t yet. the boundaries in brooklyn are likely well established so that 3 block radius isn’t shrinking. not so in maplewood. it’s moving in so in 5-10 years you will be. the reason the area is pretty is it used to be a great place to live but the creeping in of the ghetto is making many move out. check out the MLS, there are for sale signs all over the place. that’s true for a reason.

  105. Al says:

    TRhants on Ginnie Mae, website on on the realtor one,
    on the realtor one I got: savings to buy of $5,698, So they are a lot closer on this example, still it does not take into account interest on 35K you are paying upfront.

  106. Al says:

    and read whats our govermental agencies are doing:
    http://www.hud.gov/offices/hsg/fhareform/index.cfm

  107. Richard says:

    just talked to a friend of mine who bought in LI about 4 months ago but isn’t closing until feb, 07. he just found out someone else just bought an identical unit in the same TH complex but with better upgrades for less money than he’s paying, and he can’t adjust the deal. things are definitely coming off the high’s. the question remains how much.

  108. lina says:

    3 block radius isn’t shrinking. not so in maplewood. it’s moving in so in 5-10 years you will be.

    so, help me understand. is the gentrification we see in the city (ie, DUMBO, meatpacking, soon to be Bed-Sty, etc.) OPPOSITE in the suburbs? I would think more white collar first home buyersare buying in the border areas b/c of the high cost of housing, and that would drive the ghetto further and further back. why is it opposite in the burbs?

  109. SAS says:

    lina,

    You already have your mind made up, are you just going to keep posting until someone agrees with you and you see a response you like???

    if thats the case, I agree with everything you say….

    SAS

  110. factsrule says:

    lina Buying in maplewood Why?, there is no upside in that town, people have commented on that repeatedly, If youa re looking for information, an others opinions this is the place to find it.

    Now if you want to verify it yourself, than of course by all means, it is very easy to confirm what has already been discuseed.

  111. CJ Sell-out says:

    Here is my real life scenario: House under contract to close in a week. Got 96% of OLP (no re-listing shenanigans here, and what I felt was an aggressive OLP). It was what many of you would call a POS 50s cape but it was well maintained and tastefully presented, although at 2BR/1BA had a limited market in a family oriented town. It was on the market about 75 days before it went into contract, which may seem like a long time compared to recent past, but did not seem unreasonable to someone whose previous house sales occurred in 1991 and 1994.

    Owned the house 12 years, refinanced to a 5/1 ARM two years ago to re-roof, and replace windows and gutters. I will be pulling out a very nice chunk of equity. I was all prepared to sit back and gloat, but I’m not. Instead, I am reminded of why I bought 12 years ago, committing a big chunk of my available assets so I could qualify for a mortgage on my (single) income: the spread between rent and home ownership is not that great at the lower end, and the rental options aren’t that appealing. I have become very used to the autonomy of owning my own property and to the privacy of a SFH. I have a dog, which makes me a less desirable tenant and limits my options. Given the psychological benefits of owning a home, the fact that I enjoy maintaining my home and property, and the fact that I have seen nothing to rent I like half so much as the little home I’m selling, I’m feeling pretty depressed.

    I’m also finding that it’s expensive to pick up and move: in time and energy, in money for movers and supplies, in the cost of lifestyle disruption and loss of the social network including wonderful neighbors who helped me raise my son. The possibility of moving several times in several years, as many renters must, is unbearable. I lived that life as a service brat and have no desire to repeat it as an adult. What was I thinking?

    My takeaway? That many of you on this board underestimate the quality of life home ownership offers, and focus too narrowly on finances, as if money is all that matters. I can’t imagine taking on the kind of mortgage debt frequently tossed around here, but then I don’t need multiple bathrooms, granite counters or a walk-in closet. But I will sing the praises of the modest, POS 50s cape or ranch as an opportunity to invest in something that can be rewarding in significant ways without seriously compromising your financial future, even in a down market. I sing the praises of hardwood floors over Pergo and plaster over drywall, solid wood doors over luan, and of reasonable spaces that are practical to heat and cool. I will probably be back in the market in the spring after a brief stay in Mom’s oversized, over-regulated, active adult retirement villa!

  112. UnRealtor says:

    CJ Sell-out,

    Best of luck. You should be able to find decent condos for rent (most of the people around you would be owners.

    Here’s a question for you, could you afford to re-purchase your house from the person who just bought it?

    Crazy asking prices don’t necessarily translate into granite and all that stuff. Most of the houses I’ve been looking at are a complete wreck, needing thousands and thousands of dollars in repairs. For those who work in NY City, and want a decent commute, good schools, etc, the choices are limited, and all expensive.

    Google up “Sellers Remorse”

  113. James Bednar says:

    I’d be glad to give driving tours of the Irvington and the Oranges.

    I can show you where the Irvington Fire Department found my last car.

    Technically the police found the car first. The car thief didn’t feel it necessary to stop.

    The police tell me the chase went on for some time, through sections of Newark as well. The driver finally lost control of my car (most likely due to the fact that I was running a larger rear sway and a very aggressive alignment, no average driver would have expected the tremendous amount of oversteer in a panic situation). The car spun out of control and went backwards up the stairs of a school building where the gas tank ruptured.

    The car caught fire, and thats when the Irvington Fire Department was called in.

    jb

  114. UnRealtor says:

    “The car spun out of control and went backwards up the stairs of a school building where the gas tank ruptured.”

    Hopefully with the hoodlum still in it.

  115. lina says:

    Okay, okay, I’ll ease up on the questions, and take your advice….

    I’ll need to verify on my own, but I appreciate all the feedback….

  116. Blow Bloe blow your house down says:

    Hey CJ,

    Youi hit the lottery jackpot buying in 1993. That’s about the time I was vulturing several properties from the geniuses of past days.

    You ain’t going to get a pat on the back from me.Go ahead and buy big guy and pay full asking. You know RE always goes up.

    Good Luck

    BOOOOOOOOYAAAAAAAA

    Bob…….

  117. chicagofinance says:

    $1700 one bedroom in hoboken or a $325,000 condo

    I used to own a 1BR on Clinton near Grimaldi’s. It sold last year for $410,000 or so, and was 719 sq. ft. I’d be shocked if you could rent it for more than $1,500 up until the last 12 months, where it might be closer to $1,800. Still it seems to be a stretch.

    The arb is well intact for now.

  118. chicagofinance says:

    Grim:

    In the space of 6 months, I had a car heavily damaged park on the street in Hoboken, it took a month before it was fixed. Three weeks after I had it back, it was stolen off the street in Hoboken. It took a month for it to be officially considered stolen and unrecoverable. I bought another car with the insurance proceeds. Then a month later I was clipped by two 10 wheelers on West 78 local by Newark Airport [car totalled]. So I stupidly allowed the EMTs to take me to UMDNJ in Newark, where someone on the admitting staff stole my identity, and took a bender from Jamaica Queens to Copley Square in Boston – buying $1,000 in liquor on the way. Also, right after my accident, Andy Fastow was fire from Enron, where I held a sizable position on a educated bet. Throw in 9/11, & 2H2001 was a bitch.

  119. Blow Bloe blow your house down says:

    Hey barb, This one is for you.

    “David Lereah, chief economist for the National Association of Realtors, blames the declines on inflated housing prices. In a recent analysis, Lereah wrote that housing prices simply got too high, cutting into affordability. ‘Sellers need to abandon unreasonable expectations about the value of their homes,’ he wrote.”

    BOOOOOOOOOOOYAAAAAAAAAAAA

    Bob!

  120. 2008 Buyer says:

    Lina,

    I live in South Orange which is next to Maplewood and must say that both cities have really nice colonial homes, great diversity…yada yada all the good things you have heard about them is true. It is a great place to live. However due to the close proximity (5 to 10 minutes drive) to Irvington and Newark, two cities that are well above the national average crime levels you are bound to get some spill over. I live a little closer to side that’s not close to those cities.

    To put it in terms you can understand…..it would be the equivalent of you wanting to buy in Bed-Stuy which has some beautiful homes but looking closer to the Bushwick and East New York neighborhoods. Go by the neighborhood you are looking at night on a weekend and see if you still what to buy there.

  121. Blow Blow blow your house down says:

    “Buy at the depths of misery and uncertainty.”

    “Misery is a buyers friend.”

    A buyer sitting with cash and no bloated house to sell is in the driver seat. Comprende.

    Pyshcological warfare!

    Where’s the NAR counter opinion?

    It’s “A GREAT TIME to buy”
    With whose money?
    I guess realtors are getting wealthy snatching up all these bloated bargains on the market. Sheets and Trump bound.

    BOOOOOOOOOYAAAAAAAAAAAAA

    Bob………

  122. Blow Blow blow your house down says:

    No commish and the story changes at the NAR. Now they know the last of the “Drones” are in they need to start working on the greedy grubbing sellers.

    Drones all work no play and debt up to their eyeballs. Be a good Drone buy a Bloated overpriced house and kiss your life away.

  123. CJ Sell-out says:

    Bob, bob, bob.
    First, I am not a “guy,” big or otherwise.
    Second, the point of my admittedly rambling post is that sometimes we are buying a home, not houses (plural) and the balance sheet isn’t the only thing that matters. But even if you focus only on the balance sheet, I believe that modest houses in good areas can still be had at prices that compete favorably with rent. You’ve got live somewhere, and the downside on a small SFH just doesn’t look that bad to me given current rents. Modest is the key word here. I am tired of seeing people deride 1950s housing stock as the proverbial POS. Sure, some of them didn’t age well, but there are also some gems out there. In my small town three were sold this year by original owners in various states of repair, including pristine. They had had modest additions if any. All were bought by first-time homebuyers who are in for the long haul. The scale of these houses made them affordable to our parents and when they haven’t been overimproved, they are still affordable today.

  124. Blow Blow blow your house down says:

    “The slumping U.S. housing market is about to get a lot worse, according to traders of mortgage-backed securities and the so-called derivatives on which they are based.”

    “The ABX index, which measures the risk of owning bonds backed by home-loans to people with poor credit, rose 30 percent since Aug. 9 to the highest since January. There are more than $500 billion of such notes outstanding.”

    “‘Delinquency trends and home prices’ show a weakening real estate market, said Scott Eichel, head of credit trading for New York-based Bear Stearns & Co., the biggest underwriter of bonds backed by mortgages. ‘A lot of investors that have concerns about the housing market’are using the ABX index to speculate on a continued drop, he said.”

    Credit Bust?

  125. jcer says:

    Chicago, you made a very good move because today you would have a hard time selling for 410,000, depending on the property things are trending down. The person who bought it is probably sitting on 375,000 today. I too thought like you about the rents, but I signed my lease a year ago at $1700 8 months later some friends of mine paid $2600 for a smaller 2 bedroom 1000sqftish near the projects in Hoboken. It was the best they could find, a nice apartment but in a shady area at a high price. Now recently I have been helping my gf look for a 1 bed around Hob or JC and $1500 rents you garbage it takes $1700 to get something decent. Nice studios are going for $1700 and jc Heights is seeing $1200 1 bedrooms(it ain’t a pretty place).

    So I would estimate that until the apartment you sold drops to 310,000-325,000 you are right, renting is still advantageous especially given the Hudson county property tax situation. But if my hunch is correct the price will fall in line by march. I also don’t see prices dropping lower than that in Hoboken area. I cannot imagine good one bedrooms going lower than 275,000 there is just too much demand. This is why in the upcomming collapse NYC and the close surrounding areas will fair better than last time. The suburbs though are in trouble, demand has remained constant. It won’t hold much longer.

  126. Blow Blow blow your house down says:

    “I believe that modest houses in good areas can still be had at prices that compete favorably with rent.”

    Where?

    “..they are still affordable today”

    What do you consider affordable?

    Bleed”em Dry

    Bob……..

  127. SAS says:

    “That many of you on this board underestimate the quality of life home ownership offers, and focus too narrowly on finances, as if money is all that matters.”

    You ever been upside down on a mortgage? ha..
    I doubt you will singing that tune.

    #1 reason for divorce- money
    #1 reason for suicide-money

    Yes, I totally agree money is not everything, but its a factor in everything.

    I can be alot happier being a debt free renter or homeowner, than buying an overpriced shitbox that I will be forever in debt to, and I might as well kiss retirement goodbye, because I bought that shitbox because…hey…”RE always goes up” and “quality of life home ownership offers”

    You call being upside down “quality of life”?

    wow, amazing.

    SAS

  128. Richard says:

    lina, don’t take my word for it. look at the 1990 and 2000 census for south orange and maplewood. also look up the school and crime statistics.

  129. Richard says:

    i lived in south orange until very recently. if i was a woman i wouldn’t be comfortable walking around alone at night anywhere east of valley. heck valley is scary enough. south orange is a wierd place. on one hand they’re trying to gentrify but on the other hand you get all the ghetto blasters and other troublesome folk driving through the town to get to the ghetto. some of them get out and strut around town.

    another lovely factoid. about 4 months ago someone was shot dead in a liquor store right next to grove park, about 1/8 mile east of town on south orange avenue. yah i feel safe.

  130. SAS says:

    Tell you what..

    I own 3 houses, all paid for. Am I tooting my horn?? no.

    I did it all on market timing, saving, not following the crowd, taking in advice then digesting for myself, and I worked my tail off with a second income…oh yeah….kissed alot of ass along the way too.

    Nope, nobody ever helped me neither. WHen I came back from nam, all I had was bullet 2 holes…not much fun.

    My point…
    I am happier than a rooster in a hen house. Thanks to patience, hard work, and realizing their is no free lunch, and MARKET TIMING.
    and because I have no debt monkey on my back, my wife and kids relationships are great.

    A healthy financial relationship will carry over into personal life and vice versa.

    oh yeah… also helps that my wife is half my age ;) he he….

    SAS

  131. DD says:

    Gee I wonder what side of the houseownership fence the person with the complacent airheaded comment –
    ” That many of you on this board underestimate the quality of life home ownership offers, and focus too narrowly on finances, as if money is all that matters.”

    is on.

    The irony of the whole mess is that, why would a (longtime) owner give a crap if the market drops a significant percentage? If the housing market becomes more reasonably affordable (lower price) then the buying power would be all that comprable to their next purchase any.
    The problem was just in the recent years, with financially irresponsible axxholes flooding the market out to make quick buck.

  132. cj sellout says:

    You guys are too much. I am about as financially conservative as they come without involving cash and a mattress. When I graduated from college interest rates were pushing 20% on mortgages and there were no jobs (so everyone went to grad school). I have always bought houses that were substantially less expensive than I was nominally qualified for and have never carried consumer debt. I am only suggesting that a house in the $275-300K range can be a reasonable investment, assuming you can make a 20% downpayment and qualify for a fixed rate mortgage at today’s interest rates. It won’t be for everyone; I think it needs to be something you want more than $300 jeans and you need to be willing to roll up your sleeves and do some of the home maintenance yourself.

    I live in Mercer County. You can still find houses in that price range in parts of Hopewell Valley (occasionally), Lawrence, Ewing, Hamilton, Hightstown and East Windsor, especially if you are willing to put in some sweat equity, something I have always done because I didn’t have cash.

  133. DD says:

    I have cash. And it is because I don’t spened 300 dollars on jeans, new car, shopping mall impulse buys.

    I have No Depts and My cash will stay save earning 5.5APY.

    I don’t need a handyman’s helper for 270-300K
    because I know that same craphouse should really go for 150K!!!!!!! GET IT ?

    The FXCKEN PRICES DOUBLED IN THE PAST 3 to 4 YEARS! WHOS SALARY DOUBLED?

    FOR NO LOGICAL REASON OTHER THAN PEOPLES WARPED PERCEPTION of four drywalls and a ceiling

  134. cj sellout says:

    Is it possible to have a diversity of opinion on this board without resorting to personal attacks, vulgarity and SHOUTING? It’s a conversation, people.

  135. It's crashing says:

    Lereah flip flopping. The realtors must be moaning to the NAR to change the message. hehehe

    “David Lereah, chief economist for the National Association of Realtors, blames the declines on inflated housing prices. In a recent analysis, Lereah wrote that housing prices simply got too high, cutting into affordability. ‘Sellers need to abandon unreasonable expectations about the value of their homes,’ he wrote.”

  136. SAS says:

    cj sellout

    Its a tough crowd on this blog sometimes.
    :)

  137. SAS says:

    Whatever happened to that Barbara Weismann?

    Would love to hear her rebuttal?

    or did we run her out of here too….

    ;)
    SAS

  138. DD says:

    How is this personal?

    It just seems very convenient for someone in a comfortable situation to give cheap word bites about telling some people that it’s OK to spend freely in this obnoxious market filled with deception. Thats all..

    I quote from a sugar packet cliche:
    “AN OPTIMIST IS SOMEONE WHO TELLS YOU TO CHEER UP WHEN THINGS ARE GOING HIS WAY”

    I enjoy my common retort to all sellers and or homeowners alike who tell me it’s now a buyers market. If this is true, then when why aren’t you buying? And as always they have
    No comment……

  139. Steve says:

    An interesting ancedote to add to the steady drumbeat… in August of 2005 sold my 600 sq ft 1bdrm in Paulus Hook (Jersey City) for $390k- and ran to the bank with a relieved sigh.

    An identical unit, 1 floor higher, went on the market 1 month later & took about 6 months to sell for slightly less, I believe (mine took about 1.5 mos).

    Just found out that my previous neighbor, same floor/identical unit, sold their 1 bdrm as well- but it took them 9+ months and they got $345k.

    The market is dropping, for sure, and it’s only going to get uglier in Hudson county with these massive condo developments going up everywhere. At 25,000 units under construction or on the books in JC alone, the supply is coming fast and furious. I’d say 75% of these are quite poor construction quality, all have extremely high taxes being paid to rotten, corrupt local govts (at least in JC’s case)…plus maintenance to boot.

    Why in the world anyone would step in front of this freight train, at this stage, I can’t fathom….especially with condos, the risk is just just too great.

    Steve

  140. v says:

    “Would love to hear her rebuttal?”

    Hold on people. Barbara is reading through Mr Liereah’s books to find answers to our questions!

    http://www.amazon.com/exec/obidos/search-handle-url/index=books&field-author-exact=David%20Lereah&rank=-relevance%2C%2Bavailability%2C-daterank/104-6703731-5815124

    All said and done, she was bold enough to project a 20% drop in home prices by the end of next year.

  141. Spelunker says:

    i have the pleasure of telling the realtor tomorrow that i can only offer 400k for a million dollar home he will be showing me. One side of me wants to see his expression at that point and laugh out loud. you know the point where he will need to reconcile what he just heard and what he needs to come back with.

    The other side wants Blow Blow Blow your house down to do it for me. I just get the feeling that the feeling that the delivery would be priceless.

  142. Spelunker says:

    Steve, I have noticed the crazy glut of condos in JC too. So i just wanted to confirm; your neighbor had their’s on the market for 6 months during september of 2005 not 2006? i am just trying to figure out if the slowdown really started a year ago in JC.

  143. Pat says:

    http://money.cnn.com/2006/10/23/real_estate/buyers_market.moneymag/index.htm?postversion=2006102310

    Pottery Barn is sexy?

    Anyway, J.B. and C.F., too bad that you have to go accept car theft and such to live where you want to live. It shouldn’t outta be that way. :) I was robbed a few times and it made me rethink working in a city (but it was the kind of life-changing moment where they look you in the eye and you can smell their breath as they rough you up a bit.)

    CJ Sellout- I understand what you are saying, NNJ crowd may not be on the same page because housing prices are so different there, it’s hard to relate. You maybe should bag Mercer county and just live in PA. Close enough, and you’ll get more for your money. Lots more. 15 miles.

  144. Jay says:

    bc bob:

    where are you man? you didn’t weigh in…

    jay

  145. Pat says:

    Question that is inapproprate follows, but I’m going for it.

    Anybody can come up with a yes or no on this?

    An unnamed person has an investment account open for exactly 5.5 years. Inception to date return shows 5.3%, 5 year return shows 9.5%. Based on the almost exact timeframes, could these returns be THIS different using time-weighted numbers, or is somebody missing something here?

    Unnamed person has been requesting recalc. but getting verbal triage.

    Thanks.

  146. UnRealtor says:

    Got a call today from a realtor I last saw when signing in at an open house — over 12 months ago!

    Starving realtors hunting for commission checks…

  147. The crashing is deafening. Let the flippers lose their pants and realtors lose their skirts.

  148. Sapiens says:

    Pat @ 150, you need to deduct fees…

  149. Sapiens says:

    What happened to my earlier post? Jay, I will have to retype it and repost it later, I will see if it posts.

    -Sapiens

  150. Blow Blow blow your house down says:

    “Got a call today from a realtor I last saw when signing in at an open house — over 12 months ago!

    Starving realtors hunting for commission checks…”

    A little desperate. Trying to find the last “Drone” to convince mtg debt slavery is worth owning the American Dreamboat.

  151. BklynHawk says:

    DD thanks for the $300 jeans comment! I’ve missed that one for a while. It’s not a real thread without it!

    JM

  152. BklynHawk says:

    Oh, btw, this isn’t NJ related. But, Brooklyn from Brooklyn Heights to Park Slope to Sunset Park to Red Hook (roughly square). Will have about 20,000+ new condo’s online in the next 5 years if all of the construction projects slated get completed. However, it’s already slowing down in this area. I’m really curious to see the fall out from all of that ill timed construction.
    JM

    JM

  153. aj says:

    Hi all.

    I recently moved to NY/NJ area. I’m a firm believer of bubble, but at the same time I need to buy a house. Thankfully the prices are coming down in NJ.

    I’m looking at this property:
    http://www.msx.interealty.com/PropSearch/PropertyDetail.asp?Code=&ML=622519&AgentID=

    (copy paste url into browser to see it).

    It is in iselin (middlesex county) and priced at 429000 for 4 bedroom and 1.5 bath.
    I’m thinking of making offer at 350k (about 20% less). Do you guys think that is a fair price for this house or too much/too less?

    Thanks for your opinions.

  154. Steve says:

    Spelunker,

    Generally I think August 05 timeframe has been considered the peak; my ancedotal experience confirms… both my neighbors sold in 06 but the first listed in Fall 05; price didn’t drop initially but time to sell definitely extended.

    By the time the second condo was listed and sold the inventories had grown signifcantly, massive new construction was evident in downtown JC (e.g. purchasers had many more choices) and the word was finally out amongst the non-bloggers (!) that things were getting shaky.

    Will be interested to hear the local reports as we enter into 2007 and beyond… but the writing is surely on the wall.

    Steve

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