Mon 19 Feb 2007
From the Asbury Park Press:
Homeowners who had been using the rising equity in their homes as the foundation for building wealth couldn’t be too happy with the new quarterly report on home prices in the Shore area.
The median selling price for homes in the region that includes Monmouth and Ocean counties fell 4.2 percent in the fourth quarter of last year, according to the National Association of Realtors. That’s the biggest dropoff since 1991.
The numbers shouldn’t have come as any great surprise. The softening of the market had been apparent for months — a fact underscored by the epidemic of “For Sale” spreading throughout many neighborhoods in New Jersey. Many of those signs have faded with age.
Fourth-quarter numbers compiled by the Otteau Valuation Group for Monmouth and Ocean counties were even worse than those provided by the Realtors association. In Monmouth County, the median price of a home fell 7 percent, from $445,000 to $416,750. The median home price dipped 6 percent in Ocean County, from $340,000 to $320,000.
Has the market bottomed out? Most analysts believe the worst is over, even though the unsold inventory of homes remains high. The lower prices should help reduce that inventory, with home prices — and homeowner equity — increasing again early next year.
“The positive may well be that people are finally reducing the prices in order to sell their homes, and ultimately that’s going to set the stage for renewed expansion in housing,” said economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
For some, particularly those considering cashing out their homes and heading to more affordable parts of the country, waiting until 2008 for the return of a seller’s market may seem a long way off. They may have to seek consolation in rising stock prices, which have gained nearly 20 percent in value in the past seven months, and keep their fingers crossed that the stock market doesn’t suffer the same fate as the recent housing market.
February 19th, 2007 at 7:19 am
Why would not seller lower the price?
I am looking at started homes - yesterday my realtor called me and said - home she was selling got an offer 30K below (about 10% off) listing price. However the offer they have gotten is contingent of the owner selling their condo… And Condo market happily dies last summer….
So she is telling me: owner will accept 40K off from me, since it will be non-contingent on the selling previous dwelling…
I asked her - why would not they lower listing price by 40K??? She came up with some lame excuse…
I think in reality: they are still hoping that at the last minute someone would offer them their dreamland full price offer but time for them is running out - house has been sitting on the market for 200 days now….
It has nice yard but the house itself is 1940’s POS with no updates since 1960’s and very little. I am still not interested in it, it should drop by 100K to be rent neutral, and that’s after new owner will pay for major renovation.
Since it is so little nobody would even consider making it their long-term house.
And for short term - the only way to be more or less safe is to buy at rent-neutral value.
Sellers are not dropping prices (I bet you 4% in average drops on the shore is due to bigger homes, not starter homes.).
The sellers hope that either: market will come back or all we need is one silly buyer.
And by the way - I have never heard of Non-desirable enighbourhood from realtor.
Ohh wait I did - it was Newark.
February 19th, 2007 at 7:34 am
From MarketWatch:
A flood of foreclosures, but should you invest?
The number of homes in or nearing foreclosure is growing, and some investors are taking advantage of the bargains created. But even with a steady stream of distressed properties coming on the market, jumping into foreclosure investing is dangerous, especially if you are not familiar with the process or new to real-estate investing.
“Some people are using the phrase ‘tsunami;’ there’s going to be a tsunami of foreclosures,” said Dave Jenks, co-author of “The Millionaire Real Estate Investor.” “For the people who are pros at dealing with foreclosures and have the infrastructure of information and wherewithal … they will take full advantage of this.”
Consider these recent statistics: 1.05% of mortgages were in the foreclosure process in the third quarter of 2006, according to the Mortgage Bankers Association. The foreclosure rate increased from 0.99% in the second quarter; the rate was 0.97% in the third quarter of 2005.
And RealtyTrac reported last week that the number of homes entering the foreclosure process increased by 19% in January, compared with December’s numbers. Compared with January 2006, the number of homes in the process is up 25%. In 2006, a total of 1.2 million homes entered the foreclosure process, 42% more than 2005.
February 19th, 2007 at 8:02 am
I just run my Sheriff sale report for Central NJ and notices in NJ.com are up from 220 to 285 just last week. It’s going to be ugly Spring season.
February 19th, 2007 at 8:22 am
Sellers are not dropping enough….
these prices are still overvalued.
If you buy today, you will be upside down tomorow.
If one is considering buying, I would wait out 07… or better yet…. move out of NJ.
and if you do find a good deal on a house, its not really that great, because the property taxes are going to kill you softly.
I am starting to care less about the RE bubble, because that won’t really affect everyone. Just the idiots in the past few years.
But, what I am really getting concerned with is this tax environment. Because this effects everyone.
well, everyone except the south of the border people.
SAS
February 19th, 2007 at 8:26 am
“Most analysts believe the worst is over”
Let me tell you a thing about analysts.
Analysts serve two masters.
and as you know, you can’t trust or believe anyone whom serves two masters.
SAS
February 19th, 2007 at 8:51 am
“For some, particularly those considering cashing out their homes and heading to more affordable parts of the country, waiting until 2008 for the return of a seller’s market may seem a long way off.”
what kind of sellers market will we see in 2008? double diget gains and bidding wars? it would be a very short downturn in the historical sense of a re cycle.
we havnt even felt the effects of credit tightening or the bleak outlook for the N.J. economy. this is a Rutgers economist?
February 19th, 2007 at 8:53 am
keep their fingers crossed that the stock market doesn’t suffer the same fate as the recent housing market.
Good advice !
Should’nt they have the disclaimer.
KL
February 19th, 2007 at 8:56 am
well Stock mrket is up 20% is the last 7 month, while last year GDP growth is 3%??? Hmmm makes one wonder….
February 19th, 2007 at 8:59 am
you know i went to trulia.com and looked at 5 different areas all interesting to me/us… and then pulled the tax records on each that i could get. there was not 1 home in 50 that was within 30% of its 2006/2007 assessed value. additionally only about 4 in 50 were less than double their 2001 values.
nuts. still nuts.
February 19th, 2007 at 9:03 am
Here’s a good one for you in Montvale: MLS ID#: 2644275
Sold somewhere in April 2006 for 520K, it was a dump. Silly flipper throws 20K - 30K into it and is now asking 669K. Buh-bye.
February 19th, 2007 at 9:07 am
Kannekt removed the 30% price drop post
February 19th, 2007 at 9:15 am
Al (1)-
Who is this Realtor, and why is she still taking the treatment from you?
Things must be getting bad when an agent keeps trying to sell a house to someone who’s practically shouted from the treetops, “I’m not buying!”.
February 19th, 2007 at 9:22 am
I’m moving out of NYC and buying a home in NJ (Child on the way)….Since my wife and I will continue to work in NYC we wanted to be close to a train and within 30 minutes of NYC.
We settled on the Maplewood/South Orange/ West Orange area. We’ve been looking for the past 2 months just to get a sense of the market. It seems that any home that is walkable to the train station is still getting multiple offers. There is some room to negotiate on homes about 2 miles from the station….I was very surprised to see the RE market holding strong in this area. Obviously we were hoping to find desperate sellers :)
All things being equal I would not buy until 2008…but with the baby my mortgage & taxes will still be less then a 2BDR apartment in NYC.
February 19th, 2007 at 9:30 am
“We settled on the Maplewood/South Orange/ West Orange area.”
Craig,
What is it that made you decide on that area? I’m very curious because the taxes are extremely high; Maplewood/South Orange way too close to Orange, Newark, Irvington; schools are not good (many in those towns send their children to private school because they can’t/won’t send them to public); etc.
February 19th, 2007 at 9:38 am
Craig,
Don’t dismiss the area along the Pascack Valley line. Towns such as Oradell, Westwood, Park Ridge, River Vale and Montvale might be a better alternative. Nice towns and solid schools. Just food for thought.
February 19th, 2007 at 9:40 am
..and Hillsdale.
February 19th, 2007 at 9:43 am
“waiting until 2008 for the return of a seller’s market may seem a long way off.”
Seller’s market in 2008??? Based on which item; growing inventory,increasing taxes,migration out of the state,affordabilty index,record foreclosures,increasing lis pendens,$1 trillion of int rates adjustments in 2007, or record consumer debt level?? How about we are in the first phase of this unraveling, heading for a steep decline from present-2009/2010??
By the way, is it a coincidence that the first 4 letters in analyst is ANAL?? In most cases, if they were forced to traded their theory they would be devoid of any perceptive strategy.
February 19th, 2007 at 9:44 am
“Who is this Realtor, and why is she still taking the treatment from you?”
Clot [12],
Someone you booted out the door???
February 19th, 2007 at 9:50 am
waiting until 2008 for the return of a seller’s market may seem a long way off.
Did I miss this memo?
jb
February 19th, 2007 at 9:55 am
Gary you forgot Old Tappan!
February 19th, 2007 at 9:58 am
Yes, Old Tappan.. very nice town! Actually, you could throw in Harrington Park, Haworth, Closter, Demarest and a dozen others but I was sticking to those towns closest to the train.
February 19th, 2007 at 10:07 am
Clotpoll Says:
February 19th, 2007 at 9:15 am
Al (1)-
Who is this Realtor, and why is she still taking the treatment from you?
Things must be getting bad when an agent keeps trying to sell a house to someone who’s practically shouted from the treetops, “I’m not buying!”.
Hey I never said I am not buying - I just said I will not buy at current prices. so when someone accepting price 30K under listed all I am asking -is why not lower listed price??
IF buyer see’s 30K lower price they might make an offer vs. seeing higher priced home and not even making a low offer.
Just as you, Clot, have said many times - you can not get tomorrow’s price today….
How do you know that today’s price is 30K lower if listed price do not change???
I think my realtor doing the right thing: trying to sell houses.
As a salesperson Realtors must be persistent. They got spoiled in the last 5 years when in order to sell a huse all they needed to do is lis it on the MLS and it would bring in multiple offers within hours…
Now good ones are actually working hard and bad ones are not working at all.
Realtor is a salesperson since he work on commisiions.
They are not special elite group of highly skilled financial advisors.
Homes can be sold without realtors - thats why they feel very threatened by FSBO.
IF they can not make living as realtors what else can they do??? Tell me??? Work at Macy’s??
That would be a welcome to reality for them - 8$ hour on your feet all day….
February 19th, 2007 at 10:18 am
craig:
you are experiencing the two NJ’s
those employed in NYC are in a different economic reality - as you see by empirical evidence
do what you need to do now, but I would not stretch to buy anything
eventually everything will converge and you may make a 2007 decsion that will dictate your reality for the next 7-10 years
February 19th, 2007 at 10:28 am
Al (22)-
Good points all. However, knowing that a seller is willing to accept much less than the asking price is to your advantage as a buyer. That same seller’s unwillingness to lower the asking price may end up “protecting” the eventual buyer during the time the property is in attorney review. Keep mum!
Whenever I have to convince a seller of mine to accept much less than the asking, I will often reduce the asking price of the home to the accepted price during the attorney review period. If other offers come, great. If not, the seller has gotten “proof” that the accepted offer was the best- and only- offer that was going to come.
Why worry about the seller’s pricing strategy? The vast majority are still in deep denial & just want what they want. Take advantage of that!
February 19th, 2007 at 10:29 am
“IF they can not make living as realtors what else can they do??? Tell me???”
Al [22],
Start a hedge fund???
February 19th, 2007 at 10:38 am
NJ vulture fund anyone?
jb
February 19th, 2007 at 10:39 am
Our company is relo’ing to NJ (yeah yeah I know- sucks to be us) and they are TRYING to make it worthwhile. What amazes me is that the company and employees are just taking the crap that is being preached by the relo company that is getting the business (NJ has bottomed out- great time to buy, and essex county prices have not and will not ever decrease due to proximity to the city etc). At least one guy said prices had dropped around morristown, partic in higher priced homes, but all were quick to say that it is a great time to buy!
So…..
Current rumor has it that less than 5% of people are willing to move. So they are thinking of upping the incentives to include a ‘home owners differential’ of 1.75 ie if you own a 1 million dollar home, then they will allow you to buy up to a $1.75 million dollar home, and cover the extra mortgage interest payment for a set time (e.g 100% for a couple of years and then drop it off over another few years).
can you imagine buying into this only to find
1) in a few years your payments are horrific (salary won’t keep up)
2) the loan is upside down
Seems to me the best realistic (ie not incentives that would not happen such as here is a boatload of cash)incentive would be
1) We will give you extended temp housing or rental subsidy
2) We will let you hold off making a decision to buy for 2 years then you can take the package including the HOD if you so desire.
We will definitely be renting….
February 19th, 2007 at 10:56 am
“NJ vulture fund anyone?”
JB,
I like the idea.
February 19th, 2007 at 11:02 am
NJ Vulture Fund- do it like Doug Kass/Seabreeze. Short the cr@p out of everything NJ. Except Celgene.
February 19th, 2007 at 11:23 am
NJ bound,
Don’t forget the property taxes here. A million $ home could run $25k of more in taxes per year. Any chance of finding another job where you live? You might be better off staying put. Even if it involves a pay cut.
My company recently underwent a merger. This involved shifting major divisions to different locations. A major division in the other company was supposed to relocate from the Midwest to NJ, mainly for political reasons (i.e. we are committed to NJ). Many of their employees outright refused. Some even left the company before the merger closed rather than take their chances. The relocation component was eventually scrapped.
February 19th, 2007 at 11:25 am
Teacher/School Admin wages aren’t too shabby in NJ. I had no idea an elementary school teacher could make almost $100,000.
http://php.app.com/njeducators/search.php
jb
February 19th, 2007 at 11:34 am
That link is a jaw dropper..
So far I’ve seen, and keep in mind this is only Clifton..
Athletics Supervisor - $108,000
Music - Instrumental - $93,000
ESL Supervisor - $110,000
District Superintendant - $181,000
Foreign Language Supervisor - $117,000
Graphic Arts - $92,000
Audio Visual Aids Supervisor - $108,000
Guidance Supervisor - $111,000
Elementary School Principal - $128,000
February 19th, 2007 at 11:44 am
Granted thises salaries is at long experience levels but still….
100+k with full pension, full medical for 10 month employment!!!!
And I bet you they get a lot more day’s off, besides summer time, than private companies.
I think I will try to be a teacher…. Good Job sequirity…
February 19th, 2007 at 11:45 am
RentinginNJ says:
Any chance of finding another job where you live?
___
Unfortunately not- my industry is big in NJ. Also, the relo package includes one nice item- the company will buy our house at what we paid for it- and pay for all closing costs. This is good because we just bought 12 months ago a new home at the peak ([duh]and now they move me again….) and I will not have to pay some realtor 6%. I did get a great job offer elsewhere, but they did not pay relo. So I would have taken a huge hit on the selling price, and paid commissions…. However, the company says that they want me to come work for them when I can…
So my theory is this:
1) take the relo (avoid losses, maintain all equity
2) Stick equity into some thing worthwhile for a couple of years
3) rent in NJ for 2 years to fulfill the contract, then head on out.
The ‘guaranteed buy out’ is becoming rare, and almost never happens when one moves between companies. So I figure, make the most of it now, and then moving from a rental property is relatively cheap in a few years.
See any flaws in this reasoning, given that I believe I can stick NJ out for a couple of years?
February 19th, 2007 at 11:50 am
Post #31
JB - Why do you think NJ is in such debt. The janitors probably make $80,000.
February 19th, 2007 at 12:01 pm
So the bubble isnt popping everywhere…
Housing Market Heats Up Again in New York City
By TRACIE ROZHON
Published: February 19, 2007
Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.
Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.
February 19th, 2007 at 12:03 pm
here’s the link; sorry.
http://www.nytimes.com/2007/02/19/nyregion/19market.html
February 19th, 2007 at 12:08 pm
And I bet you they get a lot more day’s off, besides summer time, than private companies.
True.
Using a 10 month teacher work year to a12 month private sector work year (ratio) would imply that teachers work 0.83 days for every day a person works in the private sector.
In reality, the school year in NJ is 183 days. Assuming no weekends, 10 holidays and 3 weeks vacation per year, the private sector employees works 237 days per year.
This brings the teacher to private sector ration closer to 0.77 teacher work days for each private sector work day.
February 19th, 2007 at 12:09 pm
Ok I had to put my 2 sence in. The market is NOT going to rebound.
I thought they were going to be another set of baby boomers looking to sell and downsize or leave NJ in 2008? The market is far from bottoming out. All these brilliant analyst have been wrong so far but yes they will be right this time. LMAO! So lets all sit back and watch
as the housing market get crushed and stomped back down to 1999-2000 prices. I stil stick by my prediction and as far as I can see its heading in that direction.
February 19th, 2007 at 12:14 pm
NJ bound - are you getting a COLA (cost of living adjustment)? I am on that plan right now and able to sock away a ton of money each paycheck because I live well within my means. Mine is paid out over four years decreasing 25% each year.
I don’t know your personal situation or age. As someone who wasn’t raised in NJ, I find it a very lonely place to live. Most people are not open to making new friends. I am sure you can survive two years, but it is something to consider.
2) Stick equity into some thing worthwhile for a couple of years - I think last weekend’s open discussion had a bunch of info on where people are putting their cash.
Rachel
February 19th, 2007 at 12:15 pm
NJ bound,
Sounds like a good move. Who knows, in 2 years things could be different and it might make sense to stick around. By renting you have the option.
Did you look at the tax implications of your plan? If you don’t buy a comperable house with the relo package money, will it be considered taxable income? You may want to consult a tax person. Will you even get the housing differential if you rent?
February 19th, 2007 at 12:15 pm
Housing in the suburbs is going to be down for the next 10 years. Housing inventory is going to boom as baby boomers start cashing in on their ‘investment’.
February 19th, 2007 at 1:08 pm
renting inNJ says
Did you look at the tax implications of your plan? If you don’t buy a comperable house with the relo package money, will it be considered taxable income?
and Rachael says
NJ bound - are you getting a COLA (cost of living adjustment)?
____
very good questions
1) no tax implication. The will pay all closing costs even if we chose not to buy. I am taxed on the benefit, but they gross it up. No housing diff if you do not buy.
2) Rachael I WISH it was a COLA, then we could do as you suggest. Unfortunately to get the benefit of this homeowners differential you have to go buy a home worth more than your current home- up to 1.74x more expensive. Then, they pay the interest differential, but you are stuck with this after they reduce it over several years, and as rentinginNJ says, you are stuck with a horrific tax bill on an expensive home…
I will rummage around for the postings on the best place to stick the equity.
What I like about this blog is the helpful realistic advice that gets posted. Housing panic has some excellent information, but it is so anti HP, that it fails to see the wood for the trees on some occasions.
February 19th, 2007 at 1:16 pm
#4 SAS:
You bring up a good point, about Property Taxes. I have the same concerns, I think I can get a decent deal, if I was serious about buying later this year next year. But after seeing property tax bills of $13K to $16K a year on some of the properties that interest me, I am wondering if it is better to just rent rather than be stuck with this cost that is guaranteed to increase 4% every year. If my job wasn’t in NJ, I would have seriously considered the Westchester or Connecticut option. I may start to casually look at jobs in other states just to see what my options are.
The sad thing is that NJ home owners will be paying these huge benefits to retired state workers and these retired state workers are probably going to settle some place south/west where their money will go farther than in NJ. So we’d basically end up spending a huge amount of money paying retirees who live in other states and none of that money is going to circulate back into our state economy.
I seriously believe that our NJ will be home to extremely wealthy people and welfare recipients. The middle and upper middle is going to get squeezed with the cost of owing a home and raising a family here.
I know that some of use who in financial services in or around wall street have limited options to match comp and career outside of the New York metro area, but if you have a job with a very transferable skill like a nurse or software programmer, you should seriously consider other growing cities. Just my 0.2 cents.
February 19th, 2007 at 1:21 pm
#10 Gary:
“Sold somewhere in April 2006 for 520K, it was a dump. Silly flipper throws 20K - 30K into it and is now asking 669K. Buh-bye.”
You had the sense to look up the history of the house. There are buyers who do not have the knowledge or sense to do their research. They will probably offer $660K and if they get the deal. The’d be like WOW, I got 9K of list price, while the seller’s like. “I need more fools like them.”
February 19th, 2007 at 1:30 pm
Willow Says:
February 19th, 2007 at 9:30 am
“We settled on the Maplewood/South Orange/ West Orange area.”
What is it that made you decide on that area? I’m very curious because the taxes are extremely high; Maplewood/South Orange way too close to Orange, Newark, Irvington; schools are not good (many in those towns send their children to private school because they can’t/won’t send them to public); etc.
********************************************
We decided on this area for many reasons:
1) Proximity to NYC
2) Comfortable with the public schools in the areas we are looking at….wife is an educator and visited all the schools.
3) There is some diversity in the area…and not just poor blacks & rich whites. Coming from NYC we really liked that.
4) Many Parks & outdoor activities
5) Homes aren’t “cookie cutter”
What we found is that the word “Orange” in the towns name really gives the area a bad reputation. We really felt comfortable with the area.
Taxes are high….but for what we looking for it made the most sense.
February 19th, 2007 at 1:30 pm
From Forbes:
Best Cities For Jobs
Usually, 22-year-olds flock to cosmopolitan cities like New York and San Francisco, assuming that’s where they’ll find the most opportunities for work (and, let’s be honest, a social life). But they might be heading in the wrong direction.
…
New York’s ranking? No. 75.
…
So where should you look for work? We wouldn’t rule out New York or Los Angeles; highly educated job-seekers should be able to find opportunities there. But the major metropolitan areas will probably never shine on this list. Despite high median incomes, they are generally plagued by unemployment, expensive housing and low job growth. “The big cities have more problems with their education systems, with their infrastructure,” says Manpower’s Holmes. “The big cities have the inner cities.”
Table: Best Cities For Jobs
February 19th, 2007 at 1:34 pm
You had the sense to look up the history of the house.
A lot of (buyers) agents strongly think that what the seller purchased should be none of the buyers business. Just approaching the topic of what the seller paid for the house and how much they stand to gain.. is sooo delicate with an agent - in my experience.
February 19th, 2007 at 1:38 pm
chicagofinance Says:
February 19th, 2007 at 10:18 am
craig:
you are experiencing the two NJ’s
those employed in NYC are in a different economic reality - as you see by empirical evidence
do what you need to do now, but I would not stretch to buy anything
eventually everything will converge and you may make a 2007 decsion that will dictate your reality for the next 7-10 years
***************************************************
I couldn’t agree more…..I grew up in Central NJ before moving to NYC 10 years ago and I have no idea how people can afford to live in this state. From my perspective it makes sense since it’s MUCH cheaper then Manhattan, but for the average person this is a very expensive state.
I’ve been fortunante the past few years…looking to put down 35-40% on the home (1st home) and not using any loans for home improvements. We have a strong cash reserve & investments, so we’re comfortable in our decision…but you never know.
February 19th, 2007 at 1:39 pm
#13 Craig:
I understand your desire to buy and I have many friends who compare the rent to NYC and find a place where the mortgage is cheaper than their rent.
When you do the numbers keep in mind that majority of homes in the south orange/maple wood area are about a 100 year sold and should be financially prepared for a number of repairs down the road. Secondly your utility bills and property taxes are going to be significantly higher than in NYC. You also need to factor in the commute cost and time for your commute to NYC. The parking spaces by the train station in South Orange and Maplewood have a wait list that will take over a year so you need to be able to walk to or take the Jitney to the train station.
I am not discouraging you from buying, just making sure that you haven’t over looked the true cost in your calculations.
And most important Maplewood and South Orange will never be NYC so it is not correct to compare costs between these places.
February 19th, 2007 at 1:43 pm
#13 Craig:
Consider Monmouth County, it’s 50% off from South Orange and Maplewood and it’s 50 minutes on a bus to Midtown.
February 19th, 2007 at 1:49 pm
From the Herald News:
As the PVWC loses large accounts, little guys pay
Linda Zak notices every increase on her bills.
She especially noticed the way her water bill went up in the past year.
Zak pays about $260 a year for water. Her bill increased $52 last year when Elmwood Park, where she lives, increased water rates by 20 percent. Some on the Borough Council said the town simply could not afford to keep eating the cost of increases from the Passaic Valley Water Commission. Elmwood Park sells water to the municipality, which resells it to residents.
In 2005, the Passaic Valley Water Commission faced a crisis. The long-term erosion of industrial and commercial clients was taking its toll, a debt payment from a $70 million bond was due, and personnel and energy costs had gone up. The final price tag: $5 million that wasn’t in that year’s budget.
The burden fell on folks like Linda Zak.
…
The industrial water customer base has been contracting for a long time, as the last dye factories in Paterson and other water-intensive industries, including Garden State Paper, have left town or shut their doors.
February 19th, 2007 at 1:51 pm
#36,
Tell me more, my sister is trying to sell a one bedroom for 400K on E77th for the past year and can’t. She can’t even get anyone to look at it. It’s a realtor propaganda, don’t listen to it.
February 19th, 2007 at 1:52 pm
AntiTrump Says:
You also need to factor in the commute cost and time for your commute to NYC. The parking spaces by the train station in South Orange and Maplewood have a wait list that will take over a year so you need to be able to walk to or take the Jitney to the train station.
I am not discouraging you from buying, just making sure that you haven’t over looked the true cost in your calculations.
And most important Maplewood and South Orange will never be NYC so it is not correct to compare costs between these places.
*****************************************************************
LOL–You don’t have to tell me that this area won’t compare to NYC…I love living in the city.
The homes we are looking at, that aren’t within walking distance of the train, have a jitney stop on the corner. (I think the wait for a parking pass is 3 years)
I’m able to work from home when I want so the commute isn’t a big deal & my wife works off hours running an after-school program with parking in her building.
All that said, I know there will be an adjustment….but we are looking at spending $3,200-$3,500.00 per month for a 2bdr full service building in NYC….
February 19th, 2007 at 1:57 pm
Derek Says:
February 19th, 2007 at 1:43 pm
#13 Craig:
Consider Monmouth County, it’s 50% off from South Orange and Maplewood and it’s 50 minutes on a bus to Midtown.
*********************************************************************
Beautiful area, but just too far for us…..Some of the other areas we did consider were Nyack & Tarrytown, Southern CT….but when we put it all together…commute, cost of living, home value…..We believe the Maplewood/S&W Orange area was the best choice for us.
February 19th, 2007 at 2:01 pm
#54 Craig:
I actually liked South Orange despite the negatives. We seriously considered buying there, but was put of by two things. Firstly as I mentioned most homes are about a 100 years old and don’t come with the things that is important to me. i.e. Central air, main level family room, etc. For some reason older homes have terrible kitchens. it’s like you have chucks of two feet wide counters spread all round an odd shaped kitchen. The wife hates this. She need continious U-shaped or L-shaped counters.
Secondly taxes are ridiculous. When we sold our house in 2005, we almost put a deposit on the Pulte Manor Town homes in south mountain until we realized that taxes are $25K to $30K a year. (Can you believe this !!). Now they are offering $180K incentives on those town homes. It’s been over two years since they started the project. My friends who live south orange like the place for the same reasons you mentioned. I would have seriously considered it if not for the property taxes.
For now we have narrowed down to a few towns in union county along the I-78 as I work in Jersey City now. “West Wall Street” as realtors like to call it these days.
February 19th, 2007 at 2:02 pm
njbear
So are you saying that the suburbs and not cities are going to be down?
And does this mean that bubbles are localized?
njrebear
Housing in the suburbs is going to be down for the next 10 years.
February 19th, 2007 at 2:03 pm
#46
Craig,
May I offer the suggestion of renting in one of those towns before you buy? Personally, I would prefer Montclair over the towns you mentioned if you want Essex County. High taxes, better schools, train station, great downtown area, etc. I just don’t feel that buying in those towns is a good real estate investment especially with the market going down. Have you thought about Madison or Chatham?
February 19th, 2007 at 2:07 pm
#58. To add to Willows comments.
There is a full-service apt building just outside south orange train station called gas-light commons. Two bedrooms rent for about $2K a month. A good way to make sure that you like the neighborhood before you buy.
http://www.rent.com/rentals/new-jersey/newark-jersey-city-and-vicinity/south-orange/462425/
February 19th, 2007 at 2:09 pm
Willow Says:
February 19th, 2007 at 2:03 pm
#46
Craig,
May I offer the suggestion of renting in one of those towns before you buy? Personally, I would prefer Montclair over the towns you mentioned if you want Essex County. High taxes, better schools, train station, great downtown area, etc. I just don’t feel that buying in those towns is a good real estate investment especially with the market going down. Have you thought about Madison or Chatham?
*************************************************************
We looked at Montclair first….but found that we could get much more for our money in South & West Orange, while be as close, if not closer to the train.
We also looked at Chatham…again a very nice place, but we did want a place with some diversity.
February 19th, 2007 at 2:18 pm
AntiTrump Says:
February 19th, 2007 at 2:01 pm
#54 Craig:
I actually liked South Orange despite the negatives. We seriously considered buying there, but was put of by two things. Firstly as I mentioned most homes are about a 100 years old and don’t come with the things that is important to me. i.e. Central air, main level family room, etc. For some reason older homes have terrible kitchens. it’s like you have chucks of two feet wide counters spread all round an odd shaped kitchen. The wife hates this. She need continious U-shaped or L-shaped counters.
Secondly taxes are ridiculous. When we sold our house in 2005, we almost put a deposit on the Pulte Manor Town homes in south mountain until we realized that taxes are $25K to $30K a year. (Can you believe this !!). Now they are offering $180K incentives on those town homes. It’s been over two years since they started the project. My friends who live south orange like the place for the same reasons you mentioned. I would have seriously considered it if not for the property taxes.
For now we have narrowed down to a few towns in union county along the I-78 as I work in Jersey City now. “West Wall Street” as realtors like to call it these days.
*******************************************************************
I enjoy the “fixing up” aspect of an older home…You are so right about the kitchens!! Have no idea what they were thinking…..We have budgeted a remodeling expense for almost every home we liked.
The taxes in the homes we are looking at range from 9,500-$12,000…not cheap in anyones book, but not 20K
February 19th, 2007 at 2:18 pm
Rentlord (48)-
I don’t have a problem sharing what the seller paid for a house. It’s just information. However, seeing a seller who’s flush with equity sends a lot of buyers right down the path of believing that they can obtain that equity for a song. On the other hand, knowing that a flipper may only have a shred of equity- if any- has never prevented buyers from making offers that would require the flipper to bring a check to the closing.
Why? Because good offers are market-driven and shouldn’t be influenced by what the seller paid for the house. Knowing what the seller paid can help you develop a negotiating strategy, but it is of no use in determining present value.
February 19th, 2007 at 2:56 pm
#61 Craig:
My friend in South Orange actually had a whole second floor added to his house. He was happy with the contractor. I can get you the contractors number if want. Probably worth getting a quote.
When I bought my first house, I thought I would enjoy working on the house, but over time I realized, I’d rather be doing something else on the weekends. Another of my good friends at work spends pretty much most weekends on a home improvement project. Like putting in new windows, hard wood floors, bathroom remodeling etc. I was telling him the other day that life is too short to spend the prime years of my life fixing up my house. It’s probably something I’ll may get to enjoy at a later stage of my life when the kids are older and out of the house.
February 19th, 2007 at 2:57 pm
#62:
Agee with clot here. Good to know the history of the house, but the current market determines the price. However, it is good to know how much elbow room you have to negotiate.
February 19th, 2007 at 3:10 pm
ADA Says:
February 19th, 2007 at 12:01 pm
So the bubble isnt popping everywhere…
Housing Market Heats Up Again in New York City
By TRACIE ROZHON
Published: February 19, 2007
When the financial services industry has a bit of a lull and heads get chopped…..AND TRUST ME, IT WILL HAPPEN SOME TIME IN THE NEXT THREE YEARS….these stupid clowns will rue the day that they succumbed to the false bottom. The people who are getting outbid are going to be thanking themselves for their hesitation in 2007.
“cautious exuberance”……..what a hilariously derivative quote…..Greenspan must be rolling in his grave…..oh wait, he’s not dead…
February 19th, 2007 at 3:16 pm
“When I bought my first house, I thought I would enjoy working on the house,”
Anti,
I agree. There are much better weekend options than house maintenance/improvement projects. If you enjoy these projects, more power to you. If not, it tires very fast. When I decided to sell/rent it was strictly a financial/bubble decision. I would never have imagined the new found freedom. I have not been to Home Depot/Lowe’s in over a year. Priceless.
February 19th, 2007 at 3:17 pm
Anti, clot, agreed that it’s the market that drives the price.
I am not talking about determining the price (yet) - this is just another piece of information I like to have before I think more about the house. But almost all agents I have been in touch with (bad karma?) dance around this. I have had agents
a) tell me they will need to find out from the county records and tell me when they have the computer right in front of them.
b) act uncomfortable and make me feel guilty for asking
Why?!
I think it’s because most often they themselves feel that the house is overpriced, but wouldn’t mind their customer buy it
I am not making any generalizations here.. just stating my experience over the many years with agents.
February 19th, 2007 at 3:22 pm
AntiTrump Says:
February 19th, 2007 at 2:56 pm
#61 Craig:
I can get you the contractors number if want. Probably worth getting a quote.
When I bought my first house, I thought I would enjoy working on the house, but over time I realized, I’d rather be doing something else on the weekends…….weekends on a home improvement project. Like putting in new windows, hard wood floors, bathroom remodeling etc.
**************************************************************
I have a contractor that will do much of the work on the side for cash payments. He is a trusted family friend and we are in a position that things don’t have to be done right away.
I have no delusions that I can do any of those things projects mentioned above…I can do minor things, but I know better then anyone what my limitations are ;)
February 19th, 2007 at 3:29 pm
HOUSING CRASH 2007 was declared by HOUSING PANIC blog !!!
http://housingpanic.blogspot.com/2007/02/housingpanic-housing-bubble-blog-with.html
February 19th, 2007 at 3:34 pm
craig, you sound like you’ve done your best to get educated on the south/west orange area but you won’t really know how you like it until you move there. i lived in south orange for 2 years after moving out of NYC like you and let me tell you west and south orange are much different areas.
1. taxes are insane, and not just property
2. south orange is building an ever greater reputation of being a diverse community and i’m not just talking about black/white. you’ll see all sorts of alternative family structures and religions. one aspect the 1990 to 2000 census showed the white population has decreased by 15% to give you an example of the ethnic change. i don’t know what ethnic groups have increased but i’ve seen more people of african descent to the east of town.
3. they’re trying to gentrify with spotty success. a couple of high-end stores have opened up only to shutter. some are still open like the one under the train station. seems the south orange avenue pass through to newark and other parts east doesn’t lend itself well to people wandering around doing window shopping
4. SOPAC hasn’t helped or hurt the community. in the long run i think it will do more good than harm.
5. schools are by all witness accounts on the decline, at least by historical standards. course that’s relative.
IMO i don’t know which way the town will ultimately go but it’s got a great commute to NY and there’s little attitude with people getting along, except for the people ‘up on the hill’, that being the newstead section.
February 19th, 2007 at 3:41 pm
craig, you sound like you’ve done your best to get educated on the south/west orange area but you won’t really know how you like it until you move there. i lived in south orange for 2 years after moving out of NYC like you and let me tell you west and south orange are much different areas.
**********************************************************
Can you tell me from your experience the biggest difference between West & South Orange is? We prefer South Orange, but have looked at a few homes in the “Gregory” section of West Orange that are just gorgeous…and within 2-3 miles of the train station.
February 19th, 2007 at 3:58 pm
NJ Bound #34
Good idea. Do not buy a house in this market. Rent for two years, then take a look at the market, then move out. NJ is terrible joke. Our leadership and economic outlook is weak.
One of the few bright spots is our educated and skilled workforce, unfortunately much of this young talent is moving to other states.
February 19th, 2007 at 4:11 pm
jb, #31 and #32 -
Any link on what colleges (community colleges and Rutgers) pay?
It looks like school teachers are paid more (if not on par) than college educators.
I found a link on payscale.com but I doubt it’s accuracy:
http://www.payscale.com/research/US/School=Rutgers_University/Salary
February 19th, 2007 at 4:50 pm
Craig -
Sounds like you have put a ton of research into your decision and you are content with it.
I hope you find a wonderful house and wish you many happy years in it.
February 19th, 2007 at 4:58 pm
fyi - Sirius to Acquire Larger Rival XM for $4.57 Billion
February 19th, 2007 at 5:12 pm
#71 Commercial RE ANy thoughts on what this Spring housing market will look like? Giving myself until Sept 08 (another 18 months), then I guess I might throw in the towel (and buy)
February 19th, 2007 at 5:13 pm
#54, Craig,
The funny thing is I looked at $3,200-$3,500 per month and though the same thing, I could have some money. But in reality any house over 400K will cost you more. After you account for the commuting cost and your time, it’s not worthed!! After leaving for 2 years in the burbs I will be moving back, but right now my house value is below what I paid for and my taxes have increased 50%. So after years of grass cutting and painting I can’t wait for the market to bounce back so I can move to a worry free apartment leaving in the city.
Learn from other’s mistakes not yours.
February 19th, 2007 at 5:30 pm
fyi - Sirius to Acquire Larger Rival XM for $4.57 Billion
I don’t know if the FCC will approve. As a Sirius subscriber, I wonder what the impacts to programming will be?
February 19th, 2007 at 5:34 pm
It must be the DWEK`s ~$400 Million and Kara Homes Real estate mess that scare investors out of Real Estate market in Ocean and Monmouth county !!!
======
Creditors peg Dwek debts at $400M
His aunt, lawyer seek payments
Posted by the Asbury Park Press on 02/17/07
http://www.app.com/apps/pbcs.dll/article?AID=200770217002
======
KARA HOMES` Bankuptcy
http://www.pressofatlanticcity.com/news/local/ocean/story/7099481p-6956246c.html
February 19th, 2007 at 5:36 pm
“ADA Says:
February 19th, 2007 at 2:02 pm
njbear
So are you saying that the suburbs and not cities are going to be down?
And does this mean that bubbles are localized?”
I never said cities are immune to bubbles. Cities to a certain extent are driven by federal policies. If current level of regulations continues, bubble or no bubble property prices in cities will deflate.
February 19th, 2007 at 5:44 pm
Derek Says:
February 19th, 2007 at 5:13 pm
#54, Craig,
The funny thing is I looked at $3,200-$3,500 per month and though the same thing, I could have some money. But in reality any house over 400K will cost you more.
********************************************************************
Money was not the #1 factor in my decision…but it was a consideration. It’s just not easy to raise a child in NYC…unless you are VERY wealthy.
I know I’ll miss the city…..but I felt it was the best decision for my circumstances.
February 19th, 2007 at 5:48 pm
lisoosh Says:
February 19th, 2007 at 4:50 pm
Craig -
Sounds like you have put a ton of research into your decision and you are content with it.
I hope you find a wonderful house and wish you many happy years in it.
********************************************************************************
Thanks….I hope things work out well. Not a decision that I will look back on and regret if it doesn’t pan out. I’m not looking at it as an investment….just a home for my family. I have other asstes I consider investments.
February 19th, 2007 at 6:09 pm
Report finds residential real estate underperforms other assets
http://biz.yahoo.com/cbsm/070214/6c85ce03eabe46e6ac8c04bcfbb670d0.html?.v=1&.pf=retirement
According to the study, home values underperformed stocks and bonds over every five- and 10-year period from 1963 to 2005. Home values have been slightly above the returns on treasury bills during the same time.
The median price of new homes in the United States has risen since the early 1970s, with an average annual appreciation rate of 5.9% since 1963. But there have also been sharp corrections three times during the time period
That said, for many Americans in or approaching retirement, home equity is the largest nonpension asset they can draw on for lifelong income, the report said. And there are plenty of Americans who plan to — and perhaps need to — tap their home equity in retirement.
About one in five of those between the ages of 55 and 75 have used or plan to use equity in their home to help fund retirement, according to the survey. The survey also found that two-fifths of retirees moved after they retired and 15% plan to move. Twenty-three percent of preretirees plan to move, and another 29% are unsure if they will.
Thirty-five percent of preretirees believe their reason for moving will be to access home equity, while only 10% of retirees are motivated by equity. Thirty-one percent of retirees received more than they thought they would when they sold their home and relocated, while 23% earned less than they expected.
February 19th, 2007 at 6:16 pm
The YoY change in residential investment turned negative in Q2 2006.
For equipment and software, investment with a lag of 3 quarters, the YoY change would turn negative in Q1 2007.
For non-residential structures, a lag of 5 quarters would suggest the YoY change would turn negative in Q3 2007.
http://calculatedrisk.blogspot.com/2007/02/investment-lags.html
February 19th, 2007 at 6:48 pm
There are about 45 empty houses near where i want to rent. I’m interested in about 10 of these 45. Land lords are ready for small discounts. When will they start accepting lowballs on rentals? These people are in hara-kiri mode :)
February 19th, 2007 at 7:11 pm
#71 Commercial Re Cons: What are your thoughts on the Spring 2007 housing market?
I think I am going to hold on until Sept 08, and then throw in the towel. (probably buy something at that point)
February 19th, 2007 at 7:41 pm
Real Estate brokers and Sellers refuse to lower the MLS price quote reflecting the latest Median Home price in Ocean County …!!!
Try calling a RE broker !!!
February 19th, 2007 at 7:41 pm
Real Estate brokers and Sellers refuse to lower the MLS price quote reflecting the latest Median Home price DECLINE in Ocean County …!!!
Try calling a RE broker !!!
February 19th, 2007 at 7:49 pm
bergembubbleburst,
I feel like these things take a long time to play out. If you have the patience see what the winter of 2007 brings and start to look. I think waiting till September of 2008 may be a wise idea. There are quite a few housing indicators pointing south in the Northern Jersey market. Keep an eye on the lending industry,(easy money / weak lending standards) created this mess. Friends in the mortgage industry tell me it is becoming very difficult to get a deal for borrowers with bad credit and little to no money down. This is only the second phase of buyers being pulled out. (The first being speculators and “wise” first time home buyers.) There are many reasons for buyers to decrease in this market most notably fixed income retirees and first time home buyers….both of which have an impact on supply and demand.
In conclusion, I think this market is going to fizzle downward slowly over the next couple of years or more. If I were you I would hold off till September 2008. But then again I thought prices peaked in 2002/2003. So what do I really know.
February 19th, 2007 at 9:04 pm
“Corn Farms Replace London Flats, Soho Lofts as Hottest Property”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a4C7n_GCfjYw&refer=home
February 19th, 2007 at 9:13 pm
Craig, when I drive through South Orange, it’s with the windows rolled up, and the doors locked.
I wish you luck.
February 19th, 2007 at 9:21 pm
Commercial RE Consultant Says:
February 19th, 2007 at 7:49 pm
“In conclusion, I think this market is going to fizzle downward slowly over the next couple of years or more. If I were you I would hold off till September 2008. But then again I thought prices peaked in 2002/2003. So what do I really know. “
Commercial RE:
You were ahead of your time. I was not all out alarmed until 2003/2004. In ’05, I cringed when people told me of their “great fortune” of winning a bidding war for some overpriced fixer-upper. I wondered how they couldn’t see the big, fat elephant in the room…it’s wearing a pink tutu for crying out loud.
I take it you are somehow involved in Com RE? Any thoughts as to where commercial RE is headed? It is my understanding it has been relatively strong compared to residential RE, but will this trend downward as well?
February 19th, 2007 at 10:25 pm
KK (89)-
A call made too early is still a bad call. Falls into the category of broken clocks being correct twice daily.
Market timing is as difficult in RE as it is in other markets. The wise are always advised to buy for more solid reasons than trying to catch a bottom or riding upward momentum.
Props to you for asking CommercialRE to make a call on his segment of the biz. I, along with you, am waiting to hear this.
February 19th, 2007 at 10:27 pm
I knew Bauer’s dad wasn’t going to whack him.
Next week’s episode is gonna be great. Jack has to meet Logan, and everything else is turning to sh!t.
February 20th, 2007 at 9:29 am
#89 Commercial RE: Thank you for your insights, kind of the way I was thinking, give this soem more time to play out,as it did last time.
February 20th, 2007 at 10:06 am
Another concern I have, especially over the last few years and in looking forward is the property tax situation. It is completely out of control.
I would rather over pay by say 25K for a house, and have some confidence in the stability of taxes.
At least if I over pay, a little aggressive pre-paying, can make up for that quickly.
But the tax situation who knows. The thought of paying 15k or more in property taxes in just a few years (at the rate things are going in my town) is in a word scary.
February 20th, 2007 at 10:42 am
Willow, I know this is far back in the thread, but Maplewood, South Orange, and West Orange have good schools, comparable to other West Essex towns. And they are close to Newark, East Orange, Irvington, etc., but but are upscale areas overall (even WO is mostly $$$).
And yes, we’ve been looking in this area too. We love it and are really impressed with the towns. The taxes blow, but the towns themselves are fab.
February 20th, 2007 at 10:49 am
There is no way a Controller at Rutgers makes $75,000…. at least $130. I work at a state college
February 20th, 2007 at 10:54 am
#97 Maplewood?So Orange Sorry the taxes are hideous, and the elementary schools are OK, just Ok, the high school is not, reperat it is not good.
With all due respect I believe you would do far better to look else where.
February 20th, 2007 at 11:29 am
KK
As for commercial real estate…It all depends on the product type. There was a run up in smaller owner-user/parital Class C investment properties such as small neighborhood mixed-use buildings, restaurants, etc.
Small owner-user industrial properties (under 25,000 square feet) went up quite a bit in northern and central NJ in the last five years. In some cases they have appeared to almost double in price.
As for larger investment grade product that are leased, such as grocery anchored shopping centers, Class A office buildings, etc, I’d have to say, most of the purchases prices make sense based on risk of the tenancy, the net income the property generates, etc. Overall, I think “most” of the buyers for commercial properties, calculate risk a bit better than than average residential home buyer. Overall commercial values have gone up significantly, but many of the rental rates have followed to support these prices.
February 20th, 2007 at 1:27 pm
hey - Jim B was my post deleted, if so why?
February 20th, 2007 at 3:45 pm
Nothing of yours got moderated or deleted.
Are you sure it isn’t in the thread right below this one? I see a comment posted by you at the end of that post.
jb
February 20th, 2007 at 5:32 pm
UnRealtor Says:
February 19th, 2007 at 9:13 pm
Craig, when I drive through South Orange, it’s with the windows rolled up, and the doors locked.
I wish you luck.
__________________________________________
Oh, come on, I was in SO this weekend looking at houses and never once did I see anything that seemed even the least bit unsafe.
February 20th, 2007 at 8:04 pm
#104 Go at night, and check out the high school. We acn only advise here, if you chose to buy there, I hope it works out for you.
February 21st, 2007 at 9:53 am
Craig,
I am also looking in Maplewood, South Orange, and West Orange. I also like the diversity that the towns offer and the easy commute to the city.
Are there any other towns in NJ that have some diversity and are an easy commute to NYC?