From the Herald News:
Slump bringing down the house
By HEATHER HADDON
Lynn Tedesco and her real estate agent have tried everything.
They’ve set out cookies and finger sandwiches during open houses at her Totowa home. Every inch of the property is immaculate, down to the boiler room. There is a screen porch and new siding.
She’s gotten plenty of compliments, but no takers. Tedesco originally listed her three-bedroom house for $489,000 in June. Five months later, she’s pulled the price down to $399,000 — almost a $100,000 reduction.
“I’m giving it away,” said Tedesco, 51, a legal assistant in Hackensack.
As the housing market continues to cool, Tedesco and sellers across the country are drastically slashing the price tags on their homes. Median prices for both new and existing properties fell substantially last month compared with the previous year, according to data released this week.
…
Median prices on existing homes fell by 2.2 percent during the same interval, according to figures released on Wednesday by the National Association of Realtors, an industry group. It was the second biggest price plunge on record.Home price estimates are typically revised after they are first released, often softening the severity of initial quotes. But even the corrected figures show a slump, according to James Bednar, founder of the New Jersey Real Estate Report, a blog that tracks the area market.
“The trend still looks downward,” said Bednar, a Clifton resident.
…
“Some people aren’t willing to lower their price,” said Annette DeMedici, of West Paterson, a broker with Residential Home Funding Corporation. “People are becoming more realistic … after it’s sitting on the market for six months.”Local buyers still aren’t taking the bait. Nationally, sales picked up by 5.3 percent between August and September, the Commerce Department reported Thursday. But that gain was led by a huge jump in the West. Sales in the Northeast, by contrast, fell by 34.5 percent.
Experts are still debating what the slowdown will mean for the overall economy. New Jersey’s unemployment rate was at 5.2 percent in September, up from 4.4 percent during the same period last year, according to Bureau of Labor Department figures released last week. The Bureau considered that increase to be significant.
Nice job Jim, congrats. My question is did the sucker buyer’s pool dry up. I think so.
Hey Lynn Tedesco………
Lower it by another 100k, than you will be giving it away. Till then, take your cookies somewhere else.
SAS
Since April of 06 there have only been 5 sales of homes in the range of 450-500 in Totowa where did they get the price in the first place. Of those 5 homes only was a colonial similar looking to Ms Tedesco’s (note looking)
KL
PS: Name in the paper again mr Bednar ! Nice….
Hell yeah, James! ’bout time they get a real expert quoted. :-)
SAS,
“Lower it by another 100k, then you will be giving it away”
I agree.
I think what we will see is that the income of a few selected ones Finance, wall street Big company lawyers and MD’s are so out of sync with everybody’s else incomes that it creates real distprtion in the ecconomy.
There are few professions which increased ther salary in the last 5-10 years exponentially while everybody else’s salary stayed the same.
So for those selected ones it s possible to buy a hose at any inflated price but what it did it drove prices of ALL housing up.
Right now people are discovering, that realtive % of those high income earners who can really affors crazy prices is very low… (clearly not 69% of the nation).
And now hoousing prices will come to the equilliibrium. Laawyers, MD’s, finance peopele who chose to grossly ooverpay for their home will have to “suffer” the consequences, and for example MD will live in the similar house as Nurse, and his mortage payments will be twice of hers. I know a lot of those people will not like that and will be very upset – “well, I am MD’s I am supposed to live better than average person” – but thats what you get for agreeing to pay ridiculous prices in the first place.
Of Course, they can always hire an Arsonist to burn their homes…..
Just on the side note: in the 1960th-70th CEO salaries were x20 average person salary. Right now they re 185 I believe and it reached as high as 210 in 2000.
“Just on the side note: in the 1960th-70th CEO salaries were x20 average person salary. Right now they re 185 I believe and it reached as high as 210 in 2000”
Glad you pointed that out. I too have always felt this is a shame.
SAS
Also, I have rubbed alot of shoulders and rode on private jets with alot of these CEOs.
Trust me, they don’t really do anything to deserve those salaries.
SAS
“He shoots, he scores!”
Keep it up, Mr. Bednar!
Well CEO’s do have a lot of responsibility, but not x185 of worker at the same company. Alsoo when comppany not performing first who get fired are regular worker while by firiing one CEO you can easilly saave 185 jobs – thats real shame, but back to housing…..
To all, SAS and AL, in the last 10 years, America’s very rich have grown much richer. No one else fared as well.
In 2004, the richest 1 percent of households – 719,910 of them, with an average annual income of $326,720 – had 19.8 percent of the entire nation’s pretax income (these are the people who could afford to run up housing prices but we ran out of them). That’s up from 17.8 percent a year earlier, according to a study by University of California-Berkeley economist Emmanuel Saez.
The study, titled “The Evolution of Top Incomes,” also found that the richest one-tenth of 1 percent of Americans – 129,584 households in 2004 – reported income equal to 9.5 percent of national pretax income.
However, median, or midpoint, family income rose only 1.6 percent between 2001 and 2004, when adjusted for inflation, according to the Federal Reserve. Median family real net worth – a family’s gross assets minus liabilities – rose only 1.5 percent during those four years (the rest of us and those who took option ARM mortgages to afford monthly housing payments).
Those are very sluggish income-growth rates compared with the four years between 1998 and 2001, when median family income grew by 9.5 percent and median family real net worth grew by 10.3 percent.
Experts disagree on the causes, but they’re in near agreement that this trend threatens to erode a fundamental American belief about fairness.
“It’s not the actual getting ahead in America that’s so important – it’s been Americans’ deep belief that they have the opportunity to get ahead. And if you lose that, there’s damage to our society,” said Douglas Holtz-Eakin, who until last year was the director of the nonpartisan Congressional Budget Office and before that was chief economist for President Bush.
In coming years, income inequality is sure to be a rallying cry in political debates over everything from raising the minimum wage to federal spending on education to overhauling the tax code.
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