Was there ever any doubt that home prices could fall? Below you’ll find a sampling of listings that have either sold, or are currently for sale and have seen price reductions in the past week. Every case has either sold for less than the original purchase price, or is currently for sale and is asking less than the original purchase price.
Please keep in mind that these were not “cherry picked” or “data mined” transactions. These were all found simply looking at the daily hotsheet (GSMLS and NJMLS) over the past week.
Caveat Emptor!
Sales Transactions
39 Port Colden Road, Washington Twp (REO)
Purchased: 8/26/2005
Purchase Price: $235,000
MLS# 2375419
OLP: $209,000
LP: $169,000
Sold: 11/19/2007
Sale Price: $169,000 (28% loss)
313 Ohio Ave, Pohatcong NJ
Purchased: 8/3/2005
Purchase Price: $305,000
MLS# 2446277
OLP: $304,900
LP: $299,000
Sold: 11/29/2007
Sale Price: $281,500 (8% loss)
1 South Locust Lake Road, Hope (REO)
Purchased: 12/17/2003
Purchase Price: $290,000
MLS# 2344781
OLP: $389,900
LP: $299,900
Sold: 11/27/2007
Sale Price: $245,000 (15% loss)
2 The Arbors, New Providence
Purchased: 10/2/2006
Purchase Price: $405,000
MLS# 2403527
OLP: $419,900
LP: $399,000
Sold: 11/29/2007
Sale Price: $399,000 (1.5% loss)
820 Passaic Ave, Linden (short sale)
Purchased: 11/8/2006
Purchase Price: $337,000
MLS# 2427965
OLP: $278,975
LP: $258,957
Sold: 11/29/2007
Sale Price: $259,000 (23% loss)
31 Tall Oaks, Vernon
Purchased: 7/6/2005
Purchase Price: $365,000
MLS# 2406099
OLP: $347,900
LP: $337,900
Sold: 11/27/2007
Sale Price: $309,900 (15% loss)
1 Parkside Terrace, West Paterson
Purchased: 6/16/2006
Purchase Price: $435,000
MLS# 2436182
OLP/LP: $399,000
Sold: 11/29/2007
Sale Price: $382,500 (12% loss)
147 Cambridge Ct, Clifton NJ (Short sale? Error?)
Purchased: 4/12/2004
Purchase Price: $279,000
MLS# 2426580
OLP: $359,900
Sold: 11/29/2007
Sale Price: $237,500 (4% loss)
1391 Pompton Ave, Cedar Grove (Short sale)
Purchased: 7/12/2006
Purchase Price: $350,000
MLS# 2436344
OLP/LP: $319,000
Sold: 11/29/2007
Sale Price: $300,000 (14% loss)
15 Overlook Terrace, Bloomfield
Purchased: 9/16/2005
Purchase Price: $332,500
MLS# 2432976
OLP/LP: $334,900
Sold: 11/29/2007
Sale Price: $320,000 (4% loss)
4-11 Lambert Road, Fair Lawn
Purchased: 6/6/2005
Purchase Price: $372,900
MLS# 2397650
OLP: $389,900
LP: $369,900
Sold: 11/29/2007
Sale Price: $330,000 (11% loss)
2185 Lemoine Ave, Fort Lee NJ
Purchased: 6/30/2005
Purchase Price: $335,000
Sale Date: 11/19/2007
Sale Price: $265,000 (21% Loss)
Currently for sale:
520 Floyd Street
Purchased: 9/26/2006
Purchase Price: $790,000
Currently active, listed as:
MLS# 2733003
Original List Price: $899,000
Current Asking Price: $749,000 (5% under purchase)
175 Parker Ave, Maplewood (REO, HSBC)
Purchased: 12/16/2004
Purchase Price: $490,000
Currently active, listed as:
MLS# 2445181
OLP: $476,500
Current asking: $441,900
(10% below 2004 purchase price)
14 Fernwood Road, Livingston
Purchased: 1/22/2007
Purchase Price: $995,000
Currently active, listed as:
MLS# 2430585
OLP: $995,000
Current asking: $899,000
(10% below purchase price)
306 21st Street, Irvington (REO)
Purchased: 4/14/2005
Purchase Price: $140,000
Currently active, listed as:
MLS# 2448943
Original List: $98,500
Current Asking: $79,900
(43% below purchase price)
792 Park Ave, River Edge
Purchased: 9/20/2006
Purchase Price: $405,000
Currently active, listed as:
MLS# 2438705
Original List: $422,000
Current Asking: $377,000
(7% below purchase price)
1091 Ash Drive, Mahwah (Short Sale?)
Purchased: 9/15/2006
Purchase Price: $367,500
Currently active, listed as:
MLS# 2439202
Original List Price: $369,000
Current asking: $334,000
(9% below purchase price)
53 Forest Road, Allendale NJ
Purchased: 8/27/2007
Purchase Price: $850,000
Current MLS# 2742039
Original List Price: $869,000
Current Asking Price: $819,000 (4% below purchase price)
520 Floyd Street, Waldwick NJ
Purchased: 12/22/2005
Purchase Price: $575,000
Current MLS# 2733003 11/17/2007
Original List Price: $599,000
Current Asking Price: $479,900 (16% under purchase)
86 Platt Ave, Saddle Brook NJ
Purchased: 10/2006
Purchase Price: $700,000
MLS# 2717166/2746969
OLP: $825,000
Cuurent asking price: $689,000 (1.6% under purchase)
290 Kinderkamack Road, River Edge NJ
Purchased: 8/2006
Purchase Price: $585,000
MLS# 2746946
OLP/LP: $575,000 (1.7% under purchase)
43 Walnut Ave, Bogota NJ
Purchased: 2/20/2005
Purchase Price: $423,000
MLS# 2741479
OLP: $379,900 ($494,900)
Current Asking: $362,000 (14% under purchase)
115 Elm Street, Fairview NJ
Purchased: 6/17/2005
Purchase Price: $410,000
MLS# 2740317
OLP: $449,000
Current asking price: $390,000 (5% under purchase)
15 Lee Street, Elmwood Park NJ
Purchased: 7/31/2006
Purchase Price: $390,000
Currently for sale, listed as:
MLS# 2713892
Original List Price: $447,000
Current Asking: $365,000 (6% under purchase)
144 Franklin Ave, Midland Park NJ (REO)
Purchased: 8/2/2005
Purchase Price: $630,000
Currently for sale, listed as:
MLS# 2734110
Original List Price: $539,900
Current Asking: $519,900 (17% under purchase price)
512 Highridge Ave, Cliffside Park NJ
Purchased: 1/30/2006
Purchase Price: $900,000
Currently active, listed as:
MLS# 2740898 (multiple relistings)
Original List Price: $1,120,000
Current Asking: $850,000 (6% under purchase)
55 Elm Street, Englewood Cliffs, NJ
Purchased: 10/28/2005
Purchase Price: $865,000
Currently active, listed as:
MLS# 2614876
Original List Price: $1,025,000
Current Asking: $849,000 (2% under purchase)
From CNN/Money:
October foreclosure filings surge
Foreclosure filings nearly doubled in October and more people could lose their homes in 2008, according to a report released Thursday.
In October, 224,451 foreclosure filings were reported nationwide, up 94 percent from October 2006 and up 2 percent from September, according to RealtyTrac.
In the month, 53,609 U.S. homeowners were forced out of homes repossessed by banks, up from 20,768 a year ago, the firm said. Through October, a total of 309,557 homes have been repossessed by banks leading to forced evictions.
“Some people are in over their heads, owing more than what they can sell their house for,” said RealtyTrac spokesman Daren Blomquist.
For the full year, RealtyTrac expects 2 million homes to have entered the foreclosure process - including bank repossessions, default notices and auction sale notices.
Foreclosures could hit homeowners even harder in the beginning of 2008, Blomquist said. Homeowners experiencing trouble in the fall may not see a foreclosure notice until the January or later, he said.
On top of that, adjustable-rate mortgages are scheduled to reset in greater numbers through 2008, sending homeowners’ monthly mortgage payments higher, possibly to unmanageable levels.
“The other side of the vise pressing on these people is that it’s harder to refinance because lenders’ standards are tighter,” Blomquist added.
From Reuters:
Home foreclosures soar 94 percent: RealtyTrac
Home foreclosure filings in October edged up 2 percent from September but at 224,451 were a whopping 94 percent higher than a year earlier, real estate data firm RealtyTrac said on Thursday.
The figure, a sum of default notices, auction sale notices and bank repossessions, was down from a 32-month peak in August however, RealtyTrac, an online market of foreclosure of properties, said in its monthly foreclosure market report.
RealtyTrac said the national foreclosure rate was one filing for every 555 U.S. households in October.
“Overall foreclosure activity continues to register at a high level compared to last year but it appears to have leveled off over the past two months after hitting a high for the year in August,” James Saccacio, chief executive officer of RealtyTrac, said in a statement.
In September, home foreclosure filings fell 8 percent.
Default rates in the subprime segment of the U.S. mortgage market, which caters to borrowers with poor credit histories, have jumped this year as the housing industry slowed and prices fell in many regions, particularly areas that benefited the most during the housing market’s boom from 2000 to 2005.
“Default notices were down nearly 9 percent in October, indicating that some of the efforts on the part of homeowners, lenders and advocacy groups to find alternatives to foreclosure may be starting to have an impact. On the other hand, bank repossessions were up nearly 35 percent, evidence that more homeowners who enter foreclosure are losing their homes,” Saccacio said.
From Bloomberg:
U.S. October Existing Home Sales Fall 1.2% to 4.97 Million Rate
Sales of previously owned U.S. homes fell in October to the lowest level in at least eight years as loan restrictions and the prospect of further price declines deterred buyers.
Purchases dropped 1.2 percent, more than forecast, to an annual rate of 4.97 million, the fewest since record keeping began in 1999, from a 5.03 million September pace, the National Association of Realtors said in Washington. Sales were down 20.7 percent from October 2006 and the median home price declined by the most on record.
Defaults on subprime mortgages have prompted banks to tighten lending standards, while foreclosures add to a glut of unsold properties that’s putting pressure on home prices. Lower property values raise the risk that consumers will curtail spending, making businesses more cautious about investing and compounding a slowdown in economic growth, economists said.
“Credit conditions seem to be getting tighter again, the economy is likely to slow and falling prices may be causing people to wait before buying,” David Sloan, senior economist at 4Cast Inc. in New York, said before the report. “There is plenty of downside left in this market.”
From MarketWatch:
Supply of homes on market at 22-year high
Existing-home sales fall 1.2% to 4.97 million pace in October
Sales of existing homes fell further in October even as more homes came on the market, driving the supply of homes to the highest level in 22 years, the National Association of Realtors reported Wednesday.
Sales dropped 1.2% to a 4.97 million seasonally adjusted annualized pace in October, the real estate advocacy group said. The sales pace is the lowest since 1999, when the group began tracking combined sales of single-family homes and condos.
Sales are down 20.7% in the past year and are down 31% from the peak of 7.21 million two years ago.
October sales were stronger than the 4.85 million pace expected by economists surveyed by MarketWatch.
The inventory of unsold homes rose by 1.9% to 4.45 million, representing a 10.8 month supply, the highest since1999.
For single-family homes alone, the inventory of 10.5 months is the highest since July 1985.
The median sales price fell 5.1% in the past year to $207,800. That’s the largest year-over-year price decline ever recorded.
From CNBC:
Home Sales, Prices Fell Further In October
The pace of U.S. existing home sales in the United States fell 1.2 percent in October to
a record low 4.97 million-unit pace, the National Association of Realtors said, amid a nationwide credit crunch and a spike in failing home loans.
The median existing home price of $207,800 was a decline of 5.1 percent from a year ago, a record drop.
The sales pace was the lowest since the realty trade group began tracking both single-family and condo sales jointly in 1999.
From the National Association of Realtors:
Existing-Home Sales and Prices Overview (PDF)
From USA Today:
Housing woes have domino effect
If you haven’t yet felt the impact of the nation’s credit crisis, just wait. Chances are, you won’t have to wait long.
So far, the turmoil may feel a bit remote for average people: Failed mortgage lenders. Gargantuan write-downs by banks. Foreclosures for people who couldn’t really afford the mortgages they got.
What about the rest of us? Are we in danger? No one knows for sure, but quite likely, yes.
As the credit crisis seeps into farther-flung corners of the economy, more of us will find it harder — and costlier — to borrow money. The value of the funds in our retirement accounts could shrink. People with subpar credit will likely find it more difficult to qualify for auto and home-equity loans. Even consumers who make the cut may need higher credit scores and more documentation.
With loans harder to get, people will hesitate to buy cars, boats and other big-ticket items. The gravest fear? That weak consumer spending — along with surging energy prices, a long housing slump and sluggish job growth — will plunge the economy into a recession.
Even if a recession doesn’t occur, “We’re going to be in for a rough ride,” says Robert Kuttner, a senior fellow at Demos, a New York policy organization. “With job creation slowing down, credit standards being tightened and housing values not going up anymore, the consumer is under pressure to tighten his or her belt.”
…
Tighter credit and falling home prices top the reasons why the economy could slip into a recession, according to 50 economists surveyed in late October and early November by the National Association for Business Economics.
Most economists still don’t foresee a recession. But the risk of a downturn is growing with each bout of bleak news. About 18% of economists who responded to NABE’s survey put the probability of a recession starting within the next 12 months at 50% or greater. That’s up sharply from the 11% of economists who said so in August.
A recession would inflict pain on a majority of Americans as unemployment rose and the stock market sank further. In a recession, “Investors have to be prepared to absorb a 20%-plus decline in the value of their portfolios,” says Ed Yardeni, president of Yardeni Research, an investment research firm in Great Neck, N.Y.
…
The initial low rates on adjustable-rate mortgages are resetting to higher rates. And with housing prices in many markets falling, overextended buyers can’t refinance. Delinquencies and foreclosures are rising. Banks and other investors holding downgraded securities tied to risky mortgages are writing down their values billions of dollars at a time.
Each week brings fresh evidence of how the credit crisis is causing damage. Last week, for example, the stock market fell after Goldman Sachs downgraded the nation’s largest bank, Citigroup, to a sell. Goldman said the bank would likely have to write down $15 billion over the next two quarters, mainly because of its exposure to risky mortgage securities.
And darker days probably lie ahead: Mortgage-related losses industrywide are likely to mount through 2009 and further bruise financial institutions, says Mark Zandi, chief economist at Moody’s Economy.com.
Such losses eat away at banks’ capital reserves. That means they can’t lend as much money. Goldman Sachs analysts predict that, overall, banks’ exposure to risky mortgages could reduce the credit available to consumers and businesses by a staggering $2 trillion.
…
Consumers who pulled money out of their homes as the market soared in recent years will also be in for a shock as home prices fall during the worst real estate recession since the Great Depression.
Kuttner says he believes that consumers’ recent “reliance on home equity and credit card loans isn’t because middle-income people are going on shopping sprees, but because wages are squeezed.”
Home-equity withdrawals accounted for up to $324 billion a year in consumer spending from 2004 to 2006, according to estimates from Federal Reserve economist James Kennedy, based on a paper he wrote with former Fed chairman Alan Greenspan. These withdrawals and related consumer spending plunged in the first half of this year as the housing market weakened, according to updated estimates from Kennedy.
Pain isn’t restricted to struggling homeowners
This real estate recession is the worst since the Great Depression, affecting almost every part of the housing market, from construction to lending. A turnaround is not expected until the second half of next year and the financial aftershocks from rising foreclosures will be felt for at least another six years.
The confidence level of home builders remains at a 22-year low, and the National Association of Home Builders repeated last week that it doesn’t expect the decline in new home construction to bottom out until the second half of next year.
“Builders do not see any significant change in housing market conditions as compared to last month,” NAHB chief economist David Seiders said in a statement, and special sales incentives are having limited success in attracting home shoppers.
D.R. Horton, the second-largest home builder, said last week that 48% of buyers canceled their contracts in the July to September quarter, and that housing market conditions continued to decline in that period.
But the pain is not being felt evenly across the country. Home prices fell in 17 states during the last year, but most states “continue to have stable home values,” and a half dozen others even showed moderate price growth, according to an analysis of repeat sales last week by First American LoanPerformance.
Worst hit were California, Nevada, Arizona, Louisiana and Florida, where prices declined 5% to 10%.
Almost 16% of homeowners who bought in the past two years owe more on their mortgages than their properties are worth, Zillow.com says.
From the Wall Street Journal:
Citigroup Feels Heat To Modify Mortgages
Nonprofit Groups Press For Subprime Relief; Deciding Who Gets Help
By LAURIE P. COHEN
November 26, 2007; Page A1
Paulo Perez, a graphic artist, hasn’t made payments in months on the $330,000 mortgage on his ranch house in La Puente, Calif. It fell to Citigroup Inc.’s mortgage-servicing unit to decide what to do about that.
After Citigroup moved to foreclose on him, Mr. Perez, who is 28 years old, asked the financial giant to cut his monthly payments to a level he can afford. Citigroup representatives eventually said no, offering him a less appealing suggestion: Sell your house, turn over the proceeds, and we won’t go after you for any unpaid balance.
On the front lines of the great American mortgage workout, tens of thousands of borrowers are in trouble and looking for relief. Washington has offered advice about what lenders should do, and influential groups that counsel low-income borrowers are ratcheting up pressure on Citigroup and others to offer struggling homeowners more favorable terms on their existing loans — even borrowers whose finances seem hopeless.
…
In many ways, the pressures Citigroup faces mirror those on other mortgage servicers, whose job it is to collect monthly payments and pass them on to mortgage investors. Servicers are responsible for protecting the financial interests of those investors. But they also have become targets for criticism that the mortgage industry isn’t doing enough to clean up problems arising from years of careless lending to subprime borrowers with shaky credit.
Citigroup, however, may have a bigger mess on its hands than many. In September, as the U.S. housing crisis deepened, it bought servicing rights to a problematic $45 billion mortgage portfolio. It announced a commitment to “help distressed borrowers remain in their homes,” working with Acorn Housing Corp., a nonprofit group that counsels low- and moderate-income home buyers. But with 46,000 borrowers already in default, Citigroup is struggling with the magnitude of the portfolio’s problems, and its relations with Acorn are fraying.
…
Acorn and other nonprofit community groups contend that mortgage servicers have no right to play hardball with borrowers. Subprime lenders, these groups say, talked customers into loans they couldn’t afford by encouraging them to overstate their incomes and by basing the loans on inflated appraisals. Anyone with steady enough income to make regular monthly payments should get a restructured mortgage, the groups argue.
On the other hand, Douglas Duncan, chief economist for the Mortgage Bankers Association, argues that lenders aren’t the only ones to blame for the subprime-lending debacle. Among the many culpable parties, he says, are the borrowers who didn’t follow through on their obligations.
…
Of the 280,000 loans in the portfolio, 16.4%, or 46,000, were in default as of Sept. 30, meaning borrowers were at least two months late making payments. About 14,000 of those delinquent borrowers faced foreclosure. Nationwide, 14.8% of subprime borrowers were in default as of June 30, according to the latest figures from the Mortgage Bankers Association, a trade group.
…
In Granada Hills, Calif., Natalie Brandon is fighting to keep the three-bedroom ranch house she bought in 1985 for $105,000. Mrs. Brandon, 51, does medical billing for doctors; her husband is a dispatcher for a local gas utility. Last year, she got a $625,500 mortgage from Argent, now owned by Citigroup. Her 7.99% interest rate isn’t set to rise until next June, but she already is behind on payments.
Over the past five years, she has refinanced her home five times, each time taking out cash and paying prepayment penalties. Last year, all she had to do to refinance was state that she and her husband earned a combined $100,000. She says she used the proceeds to pay off $30,000 owed on her white Lexus.
This year, she says, their income fell after she suffered a short-term disability. Mrs. Brandon figures if she sold her home today, she wouldn’t get more than $450,000 — what a nearby home sold for in foreclosure.