Lowball! January 2007

Welcome to another edition of Lowball!

Lowball! takes a look at home sales from a different perspective. For those new to Lowball!, a lowball offer is when a buyer offers a significantly lower bid than asking in hopes that the seller accepts the offer. We take a list of home sales from the past month and pick out the sales that have the highest percentage difference between original list price and selling price.

The purpose of Lowball! is to show buyers that the market has changed and buyers now have considerably more leverage than sellers. Just a short time ago, Lowball! offers would have been laughed at and discarded, however, not any more. The fact that so many under-asking offers are being accepted is clear proof that the market is changing.

The first table below contains Lowball sales of 20% or greater off the Original List Price.

MLS# Town OLP LP SP % off OLP $ off OLP
2302695 West Milford Twp. $172,000 $160,000 $100,000 41.9% $72,000
2238966 Newark City (1614) $122,500 $114,900 $72,000 41.2% $50,500
2258527 Harding Twp. (2313) $1,460,000 $899,000 $881,500 39.6% $578,500
2311282 Hoboken City* (1805) $894,999 $775,000 $600,000 33.0% $294,999
2301653 Roxbury Twp.* (2336) $217,000 $173,600 $145,600 32.9% $71,400
2305193 Readington Twp. $339,900 $259,900 $229,000 32.6% $110,900
2268892 Flemington Boro $515,000 $490,000 $350,000 32.0% $165,000
2291343 Chatham Twp. (2305) $379,000 $339,000 $257,665 32.0% $121,335
2311678 Maplewood Twp. $250,000 $250,000 $170,000 32.0% $80,000
2255174 Delaware Twp. (1907) $975,000 $789,900 $675,000 30.8% $300,000
2325138 Mahwah Twp.* (1133) $455,000 $410,000 $320,000 29.7% $135,000
2275066 East Orange City $219,900 $209,900 $155,000 29.5% $64,900
2280914 Bridgewater Twp. $329,900 $269,900 $235,000 28.8% $94,900
2303646 Mendham Twp. (2320) $1,685,000 $1,385,000 $1,204,973 28.5% $480,027
2305545 Bridgewater Twp. $549,900 $499,900 $397,500 27.7% $152,400
2106433 West Caldwell Twp. $1,100,000 $849,000 $800,000 27.3% $300,000
2357073 Mountain Lakes Boro $1,599,900 $1,179,000 $1,175,000 26.6% $424,900
2300263 East Hanover Twp. $1,299,000 $999,900 $955,000 26.5% $344,000
2258841 West Milford Twp. $309,900 $269,900 $228,000 26.4% $81,900
2260491 Randolph Twp. $1,950,000 $1,650,000 $1,450,000 25.6% $500,000
2334184 Belleville Twp. (1601) $476,335 $445,835 $356,000 25.3% $120,335
2224267 Paterson City* (2508) $399,000 $349,000 $300,000 24.8% $99,000
2262959 Mendham Twp. $1,525,000 $1,350,000 $1,150,000 24.6% $375,000
2289946 Oakland Boro* (1142) $225,000 $202,500 $170,000 24.4% $55,000
2273944 Ridgewood Village $1,450,000 $1,204,822 $1,100,000 24.1% $350,000
2286426 Clifton City* (2502) $499,000 $395,000 $380,000 23.8% $119,000
2322813 East Orange City $379,900 $315,000 $290,000 23.7% $89,900
2273274 Mahwah Twp. (1133) $799,000 $675,000 $610,000 23.7% $189,000
2267905 Verona Twp. (1620) $299,900 $245,000 $230,000 23.3% $69,900
2313194 Irvington Twp.* (1609) $209,900 $209,900 $161,000 23.3% $48,900
2244369 Newark City (1614) $149,900 $149,900 $115,000 23.3% $34,900
2244346 Newark City (1614) $149,900 $149,900 $115,000 23.3% $34,900
2239519 Wayne Twp. (2514) $149,900 $139,900 $115,000 23.3% $34,900
2280145 Harding Twp. (2313) $2,375,000 $1,975,000 $1,830,000 22.9% $545,000
2305102 Hawthorne Boro $479,000 $399,000 $370,000 22.8% $109,000
2228426 Lebanon Twp.* (1919) $695,000 $589,000 $540,000 22.3% $155,000
2298423 Paterson City* (2508) $409,900 $359,000 $320,000 21.9% $89,900
2278711 Rockaway Twp. $429,000 $359,000 $335,000 21.9% $94,000
2306271 West Caldwell Twp. $339,000 $319,000 $265,000 21.8% $74,000
2263426 Chatham Boro* (2304) $2,800,000 $2,500,000 $2,200,000 21.4% $600,000
2283964 Boonton Town (2301) $539,900 $469,000 $425,000 21.3% $114,900
2297890 Franklin Twp. (2708) $330,000 $279,900 $260,000 21.2% $70,000
2321282 Green Brook Twp. $649,900 $579,900 $515,000 20.8% $134,900
2321293 Warren Twp. (2720) $649,900 $579,900 $515,000 20.8% $134,900
2293556 Montvale Boro (1136) $599,900 $499,900 $475,500 20.7% $124,400
2266311 Lebanon Twp. (1919) $579,900 $489,000 $460,000 20.7% $119,900
2269937 Clifton City* (2502) $479,000 $399,900 $380,000 20.7% $99,000
2298253 Clifton City (2502) $399,000 $333,900 $317,000 20.6% $82,000
2285839 Montclair Twp. (1613) $559,900 $499,900 $445,000 20.5% $114,900
2005240 Bloomingdale Boro $349,900 $289,900 $279,000 20.3% $70,900
2308879 Morris Twp.* (2324) $689,000 $585,000 $550,000 20.2% $139,000
2289318 Madison Boro (2318) $1,375,000 $1,199,000 $1,100,000 20.0% $275,000

The second table contains Lowball sales of $150,000 or greater off the Original List Price.

MLS# Town OLP LP SP % off OLP $ off OLP
2263426 Chatham Boro* (2304) $2,800,000 $2,500,000 $2,200,000 21.4% $600,000
2258527 Harding Twp. (2313) $1,460,000 $899,000 $881,500 39.6% $578,500
2280145 Harding Twp. (2313) $2,375,000 $1,975,000 $1,830,000 22.9% $545,000
2264923 Essex Fells Twp. (1606) $2,850,000 $2,600,000 $2,340,000 17.9% $510,000
2260491 Randolph Twp.* (2332) $1,950,000 $1,650,000 $1,450,000 25.6% $500,000
2303646 Mendham Twp. (2320) $1,685,000 $1,385,000 $1,204,973 28.5% $480,027
2328804 Mendham Boro* (2319) $6,750,000 $6,750,000 $6,300,000 6.7% $450,000
2357073 Mountain Lakes Boro $1,599,900 $1,179,000 $1,175,000 26.6% $424,900
2262959 Mendham Twp.* (2320) $1,525,000 $1,350,000 $1,150,000 24.6% $375,000
2273944 Ridgewood Village (1151) $1,450,000 $1,204,822 $1,100,000 24.1% $350,000
2249000 Bernardsville Boro* (2703) $1,800,000 $1,650,000 $1,450,000 19.4% $350,000
2300263 East Hanover Twp. (2310) $1,299,000 $999,900 $955,000 26.5% $344,000
2255174 Delaware Twp. (1907) $975,000 $789,900 $675,000 30.8% $300,000
2106433 West Caldwell Twp. $1,100,000 $849,000 $800,000 27.3% $300,000
2298514 Chatham Boro* (2304) $1,499,000 $1,299,000 $1,200,000 19.9% $299,000
2311282 Hoboken City* (1805) $894,999 $775,000 $600,000 33.0% $294,999
2289318 Madison Boro (2318) $1,375,000 $1,199,000 $1,100,000 20.0% $275,000
2301437 Watchung Boro* (2721) $1,475,000 $1,300,000 $1,200,000 18.6% $275,000
2279075 Mountain Lakes Boro $1,549,000 $1,299,000 $1,275,000 17.7% $274,000
2268967 Tewksbury Twp. (1924) $1,449,900 $1,179,900 $1,179,900 18.6% $270,000
2262980 Kinnelon Boro* (2315) $1,244,579 $1,244,579 $999,000 19.7% $245,579
2245699 West Orange Twp. (1622) $1,700,000 $1,590,000 $1,475,000 13.2% $225,000
2331076 Chester Twp. (2307) $1,299,900 $1,299,900 $1,075,000 17.3% $224,900
2305714 Mountain Lakes Boro $1,150,000 $989,000 $950,000 17.4% $200,000
2329078 Chatham Boro* (2304) $1,295,000 $1,295,000 $1,100,000 15.1% $195,000
2273274 Mahwah Twp. (1133) $799,000 $675,000 $610,000 23.7% $189,000
2285063 Livingston Twp. (1610) $1,050,000 $899,000 $862,500 17.9% $187,500
2316455 Chatham Twp.* (2305) $1,150,000 $997,000 $965,000 16.1% $185,000
2299498 Florham Park Boro (2311) $1,435,000 $1,295,000 $1,250,000 12.9% $185,000
2250966 Wayne Twp. (2514) $1,275,000 $1,225,000 $1,095,000 14.1% $180,000
2315008 East Hanover Twp. (2310) $1,100,000 $975,000 $925,000 15.9% $175,000
2229512 Livingston Twp. (1610) $1,525,000 $1,525,000 $1,350,000 11.5% $175,000
2278861 Livingston Twp.* (1610) $949,900 $809,900 $775,000 18.4% $174,900
2290199 Long Hill Twp.* (2317) $1,299,000 $1,190,000 $1,125,000 13.4% $174,000
2335104 North Caldwell Boro $1,499,000 $1,499,000 $1,325,000 11.6% $174,000
2265956 Mahwah Twp. (1133) $1,699,900 $1,599,900 $1,530,000 10.0% $169,900
2268892 Flemington Boro (1909) $515,000 $490,000 $350,000 32.0% $165,000
2282568 Clifton City (2502) $1,090,000 $1,090,000 $925,000 15.1% $165,000
2228426 Lebanon Twp.* (1919) $695,000 $589,000 $540,000 22.3% $155,000
2305545 Bridgewater Twp.* (2706) $549,900 $499,900 $397,500 27.7% $152,400
2325193 Chatham Twp. (2305) $1,350,000 $1,350,000 $1,200,000 11.1% $150,000
2307793 Morris Twp. (2324) $1,490,000 $1,374,900 $1,340,000 10.1% $150,000
2294170 Montville Twp. (2322) $1,950,000 $1,950,000 $1,800,000 7.7% $150,000
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42 Responses to Lowball! January 2007

  1. James Bednar says:

    Full sales data can be found here:

    Sales-Jan06a.xls (Excel)

    jb

  2. James Bednar says:

    Just to note, these are GSMLS sales only. There are some SD (Old Sold) listings in included as well. While I deleted most of the absurdly late postings, I did keep the sales from November onwards. Close Date and DOM data is available in the XLS above.

    jb

  3. syncmaster says:

    JB,

    Should that link point to http://njrereport.com/files/Sales-Jan07a.xls instead of 06a?

  4. syncmaster says:

    JB, I downloaded Sales-Jan07a.xls and it appears there is no data from Middlesex County. Intentional?

  5. lisoosh says:

    I’m not sure how important those OLP listings are any more, they were obviously unrealistic in many cases and detract from how dramatic many of the LP lowballs actually are.

    Any details on the Flemington house?

  6. BC Bob says:

    # 2283964,

    20% off in the Mountain Lakes school district?? Must be a typo or a mistake.

  7. Hard Place says:

    Didn’t see any sales in Summit. I guess Summit being a good school district on a NYC train line didn’t help any of the houses in the market last month.

  8. JCSidelines says:

    Wow. This thing is zooming back to the historic income to price ratios, or inflation plus trend lines. I just recall that big NYT article last year where one developer said that we were seeing the “Europeanization” of US housing markets. So much for the theory that there was some fundamental shift in supply and demand. I hope the new Congress uses this moment to regulate financial markets so that residential real estate no longer becomes subject to speculative excess. There is so much human harm being done on this massive roller coaster that is not measured with financial metrics.

  9. listentothecrybabywannabehomeowners says:

    jb,

    Thanks for posting the data. Now off for a closer look…

    WAAAAAAAAAAAAAAAAH!!!

  10. Seneca says:

    No Union County sales at all? I think the data was accidentally left out?

  11. Michelle says:

    BC Bob Says:
    # 2283964,

    20% off in the Mountain Lakes school district?? Must be a typo or a mistake.

    I’m seeing quite a few houses in ML being sold 20% off OLP. Doesn’t mean they are not still amazingly overpriced, they are for sure.

  12. Buying in Late 07 (maybe) says:

    Anyone know why there are virtually NO lowballs from Bergen County?

  13. James Bednar says:

    The majority of Bergen listings are on NJMLS, a different MLS system. It’s why I specified that above.

    jb

  14. Seneca says:

    so the lack of UC listings is due to no sales at all? UC is part of GSMLS. …and all of Richard’s friends are selling their homes in Westfield for top dollar.

  15. syncmaster says:

    I am confused. The public site of GSMLS.COM has Middlesex County but the data posted does not.

  16. RoadTripBoy says:

    Wow! When I think about the Lowball! columns that were posted a year ago, this list really stands out terms of volume and in the percent price drops. If I’m not mistaken the largest percent price drops now are about double what they were a year ago. This market has really changed a great deal in the past year.

    Keep up the good work, James!

  17. SG says:

    JB: Thanks for posting the information. This is really great.

    One request, Is it possible to put Address information in this spreadsheet?

    I know we don’t see address when the house is in market, but I am not sure if there is any restriction after it has sold.

    Thx.

  18. James Bednar says:

    I am confused. The public site of GSMLS.COM has Middlesex County but the data posted does not.

    sync,

    Sorry, I did forget to include Middlesex.

    jb

  19. James Bednar says:

    Sync,

    Updated.

    jb

  20. Richard says:

    when i sell my home i’ll list for double so i can make the top of the lowball list.

  21. Richard says:

    seneca, your views versus mine on the RE market isn’t a bifurcation. your methods to draw such distinctions are crude.

  22. James Bednar says:

    when i sell my home i’ll list for double so i can make the top of the lowball list.

    Richard,

    Don’t be so silly, look at the how long, on average, those lowball properties have been on the market. DOM is in the spreadsheet or you can look the listings up yourself.

    Let me cherry pick, if I may..

    Harding, 231 days on market
    Delaware, 222 days on market
    West Caldwell, 424 days on market

    We all know that all sellers have the luxury of time, and don’t mind waiting almost a year to sell their home.

    jb

  23. James Bednar says:

    Lowballs of 20% or greater had an average DOM of 162 days, almost 6 months.

    Sales from greater than 0% to less than 20% off OLP had an average DOM of 75 days.

    If we exclude the greater than 0% to less than 5% (as normal sales), average DOM jumps to 87 days.

    If we look at that exclusion group alone, average DOM is 58. Also, if we look at sales at asking, average DOM is 51.

    jb

  24. Seneca says:

    Richard,

    You could knock me over with a feather! With regard to the dissimilitude between your views on the RE market and mine, we agree! See, we agree on something. I’m a uniter, not a divider so I will bask in the glow of our agreement to disagree. The warm-fuzzy feeling is overpowering.

    The methods I employ to reach my conclusions on the local RE market are no more “crude” than yours. But you are certainly more boorish in your approach than I am.

    Where are all the Westfield sales? Where are they? Where are the Summit sales, the Cranford sales, Scotch Plains, Clark…… where they at? How do you interpret the lowball data with regard to Union County? Educate me if you will.

  25. Hard Place says:

    I see many more lowballs in the future for Westfield and Summit. Some of the asking prices are ludicrous in these towns.

  26. syncmaster says:

    JB,

    Thanks!

  27. R Patrick says:

    I see that fort lee is never on the list,

    HA HA HA it will never fall, and we will make more money building 1/2 houses and townhouses behind Tacobells!!!!

    HA HA HA

  28. listentothecrybabywannabehomeowners says:

    Taking a look at the lowball information for the last four months shows information crybabywannabes might not want to see. Looking at lowball data MEDIANS for OLP, LP, SL, %off Lp, %off LP, and DOM (where available:

    Median OLP LP SP off OLP off LP DOM
    Oct 410000 399000 394000 5.0% 3.84% —
    Nov-a 399000 385000 375000 4.77% 2.57% —
    Nov-b 399900 389000 374900 5.5% 3.62% 63
    Dec 400000 394900 380000 6.16% 3.77% 63
    Jan 424900 402500 395000 6.95% 1.86% 73

    OLP, LP and SP have increased since October 2006. Sellers are getting anywhere from 96.5% to 98% of their asking listing prices, when ALL the data is looked at. The data sure doesn’t show the big 20% correction, 2003 prices or vanishing equity going poof balleyhooed by many of the crybabywannabes on this blog.

    Yes, some noncrybabies price their homes way too high, and these homes sit for a long time before selling well below OLP. We see examples posted here daily. Other sellers obtain pricing well above LP in a short time.

    Note that over the last four months, median sale price has gone UP!! DOM isn’t too bad, either. Crybabywannabes, where’s the RE crash and burn you keep writing about?

    WAAAAAAAAAAAAAAAAAH!!!

  29. Al says:

    Note that over the last four months, median sale price has gone UP!! DOM isn’t too bad, either. Crybabywannabes, where’s the RE crash and burn you keep writing about?

    You win – NJ will always be expensive, all private buisness will leave the state, and all there will be left is govermental workers who will pay themselve huge salaries, the whole state will be getting more and more in debt but it is ok because NJ is next to NY.

  30. Seneca says:

    listentotheWAAAAAAAAAHHHHHHHH!,

    What, in your view, is the “right” price relative to 1H2005 pricing? Should a buyer look to pay same levels, +5% over 1H2005, -5% against 1H2005, more, less? What level constitutes FMV pricing?

    >> some noncrybabies price their homes way too high

    What level is way too high? +5% vs 2005, more?

    I found a home I like that is +12% over the 2006 comps. It meets all the requirements I have for a home so I just need to know if I am getting a deal or ripped off. What say you?

  31. lina says:

    Can someone give me the details for the property on this list:

    MLS 2311678

    Thanks!

  32. listentothecrybabywannabehomeowners says:

    The information presented is merely data points. The data make no indication if property is correctly valued. The dataset merely states that prices are not dropping.

    WAAAAAAAAAAAAAAAAAH!!!

  33. Seneca says:

    listen,

    Understood. I am not asking about those specific data points. I am just asking, in general, how would you advise someone buying a home today to negotiate price? What would you advise they shoot for, relative to 2005/2006 price levels, to ensure they don’t overpay?

    I am asking an honest question here. I am genuinely interested in your opinion.

  34. Paul says:

    How do I see by MLS #ID and in which web site?

    I want to see the details of the MLSID from Edison which had low balls. for example
    2318935

    Thanks in advance

  35. Seneca says:

    Paul,

    You need to have access to the full MLS which is primarily restricted to those with a RE license.

  36. R Patrick says:

    Seriously, whats up with my ‘hood? Or are all the sales being done privately by the Asians?

  37. Homebuyer says:

    I think the results are great. The total average difference between the OLP and the SP is around 8%.

    Paul, sometimes I get lucky with Trulia.com on sold prices. But I certainly don’t think the data is up to date.

  38. Homebuyer says:

    Seneca,

    I’d definitely say 12% over last years prices is way too high. Most data that I have seen related to Jersey indicates that prices have dropped or incentives are higher. In my opinion you’re getting screwed. But that’s just my two cents. If you’re in the middle of negotiations, see if they can pay your taxes for the next couple of years or try to negotiate a sellers consession instead.

  39. seneca says:

    Homebuyer,

    Thanks for the response. I was really asking because I would like listentothecrybabies response to my question. S/he has expressed previously that anyone on this blog unwilling to pay today’s prices is a crybaby who wishes they had bought years ago when prices were still reasonable.

    I haven’t heard him/her offer any guidance as to what is a reasonable price to pay.

    Of course, I would never pay 12% over 2005 comps let alone any percent over 2005 comps. I would just love to get some practical and executable advice from someone who thus far has only been able to criticize those of us who believe prices will move downward over the next few years.

    Listen, I ask again, what would be YOUR strategy in negotiating in today’s market. That is, how do you determine fair market price?

  40. listentothecrybabywannabehomeowners says:

    seneca,

    Sorry for the delayed reply; I don’t post on this blog every day.

    If I were buying in this market, I would look at numerous homes in the location(s) I wanted to buy, cull out the turdboxes and unmaintained shacks , and then compare similiarly good condition and size properties. Look at current sales and prices of homes under contract, not comps from 2005 or before while keeping in mind that not all data would be shown by a RE agent. Find the house that I like and feel comfortable in. Then I’d bid at least 10% under list price, making sure the seller knows my offer is valid and ability to buy is strong. Keep a max price in mind and do not exceed it. Base the purchase decision on my requirements, and not what the RE agent says they should be. The goal is to buy at the lowest price the seller will accept while not exceeding my max price.

    Some caveats:

    1) Don’t buy if I plan on staying less than two years.
    2) No creative, dumb-ass financing for the purchase.
    3) Buy what I can comfortably afford, no more.
    4) Buy a home first and foremost as a place to live, and the utility that provides. Making quick money, even in a hot market, is not my first priority. (I reserve that for rental property).
    5) Move in, enjoy, and don’t fret the immediate ups and downs of the market.
    6) There always is an element of risk that cannot be controlled. Unexpected life changes, unplanned medical expenses, job loss, a need to move can arise.
    7) Finally, if worse ever came to worse, I’d mail the keys to the bank, move out, and never look back. That is why mortgage interest, and the risk premium it represents, is charged. It is merely a business transaction.

    I’m willing to bet the reasons that keep many people on this blog from buying RE now kept them from buying three or four years ago and will keep them buying from buying in the future. Instead, they will remain crybabywannabes.

    WAAAAAAAAAAAAAAAAH!!!

  41. Seneca says:

    listen,

    Thanks for the response, no worries about the delay, I have a day job as well and sometimes can’t post for days at a time.

    Couple of problems I foresee in using your approach. Maybe you can help me work through them.

    >> Look at current sales and prices of homes
    >> under contract, not comps from 2005 or
    >> before

    I agree in theory with this but the places I am looking have very few comps due to the low sales figures from the last 3-4 months. Sometimes, to find a comp in a particular neighborhood, I have no choice but to go back to 2005.

    >> Then I’d bid at least 10% under
    >> list price

    This just doesn’t fly because most of the homes I look at are priced tens of thousands if not a full hundred thousand over sales from 2005 and 2006. We are talking 25% or more over previous sales. Maybe its just my dumb luck that I happen to like homes for sale that are being listed by the most greedy sellers out there. In any case, offering 10-15% under the asking price puts me at about 10% over the recent (12 months or less) comps.

    Maybe it makes me a crybaby to not want to pay that much, but I don’t think the pricing makes sense for anyone except the seller. This really doesn’t boil down to a can’t-afford-to situation for me, the money is there.

    I personally don’t think any FMV pricing strategy can be based on ASKING prices because they range from the “priced right” category to the “utterly ridiculous”.

    Value has to be based on something else that is grounded in something standardized like square footage, assessed value, lot size, quality of school systems, recent comps, etc. Really a multiple regression that combines elements of the aforementioned points as well as numerous others.

    10% or more off asking just doesn’t cut it in today’s market.

  42. listentothecrybabywannabehomeowners says:

    seneca,

    To a degree, I agree with you. (Yes, I can be reasonable.) Your statement that prices are hundreds of thousands over 2005 and 2006 are exactly why I want current data, including data on houses under contract. Yes, current data is difficult to find. But it is way more valuable than a subjective assessment that a seller is greedy. The seller has the right to ask any price he wants, but you/I don’t have to bite.

    Finding and buying a house is not an exact science, and it makes a quantitative person like me (and I suspect you) crazy trying to quantify intangibles.

    Ultimately, all I can add is if a home appears overpriced to you, then it is. Don’t let a RE agent tell you otherwise. One needs to look at enough homes to find the one that is priced right and meets his needs. Not an easy task, but it’s also one that shouldn’t take many months or years. Otherwise, one becomes a crybabywannabe.

    Hope this helps, thanks for asking.

    WAAAAAAAAAAAAAAAAH!!!

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