Stuck in the middle with you

From the Record:

As home prices rose, high- and low-end towns are left out

As North Jersey home values rebounded during 2013, two market segments were left out: the very low-priced and the very high-priced communities, according to an analysis of property prices by The Record.

The gradual recovery of the housing market in 2013 meant that for the first time since 2006, Bergen County home prices moved up — at least in the first eight months of the year, the latest complete data available from public records. That period covers the busiest time of the year for home sales. Prices were up a median 6.3 percent in Bergen County during the first eight months of the year, compared with the same period in 2012.

But falling values in lower-priced communities such as Paterson meant that Passaic County’s prices were flat, up a scant 0.2 percent.

“Bergen County is generally better positioned than Passaic in terms of proximity to New York City, highways and jobs, and in not having places like Passaic and Paterson in the mix,” said Jeffrey Otteau, an East Brunswick appraiser who tracks home prices statewide.

At both price extremes of the market — high and low — home values underperformed. Homes in communities with a median price of under $250,000 lost about 3.6 percent of their value in the first eight months of last year, and homes in communities where the median is over $700,000 lost 5.1 percent.

“You can’t paint the market right now with one broad brush stroke,” said appraiser Rick DelGuercio, president of Appraisal Systems in Glen Rock. “People ask me, ‘What are you seeing in the market?’ I say, ‘Which market?’ We are seeing strength, but only within certain economic brackets of value.”

At the low end, DelGuercio said, prices have lagged because many of the transactions were distressed sales, where the home had to be sold because the owner fell behind on mortgage payments. Distressed sales tend to sell at a discount to the market. In addition, the difficulty of obtaining mortgages shuts out a lot of low-income potential buyers — the market for these properties.

The pattern is clear in North Jersey’s cities.

“If you’re in suburbia, chances are there are two to three offers on a property,” said John Susani of Coldwell Banker Susani Realty in Paterson. “Down here, never. If you list it at $175,000, you’d never get $175,000.”

This entry was posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate. Bookmark the permalink.

20 Responses to Stuck in the middle with you

  1. Fabius Maximus says:

    Friskies

  2. clotluva says:

    If one assumes that the NNJ market is closely linked to the health of NYC, then what do decreasing Manhattan rental prices mean for prices of higher tier houses in the suburbs?

    http://www.nytimes.com/2014/02/16/realestate/manhattan-rents-down-incentives-are-up.html?hpw&rref=realestate&_r=0

    My take is that it is further proof that people are stretched to their limits…but I’m sure someone will say that it’s an indicator of more people competing for houses in suburbia “within certain economic brackets of value”. (Cough.)

  3. Grim says:

    No sleep till Brooklyn.

  4. Fast Eddie says:

    There’s an article in the Business section of the Bergen Record today outlining the unemployment picture in NJ. We’re 2nd behind Rhode Island and it’s a lot more dire under the surface. Manufacturing and Pharma have left. Sell? Sell to who? And Manhattan rental prices are decreasing? There are a ton of f.ucked buyers in beautiful, prestigious North Jersey with no end in sight.

  5. Michael says:

    5- I hope you are not right, you are scaring me. I have to believe things will somehow work out.

  6. grim says:

    Manufacturing has left? Good luck trying to lease manufacturing space. I had someone in Paterson quote me $6,000 a month triple net yesterday (for less than 3k square feet) – raw space that needed a full build-out. I could buy a $1m building for that rent, including taxes, insurance, and build-out.

  7. cobbler says:

    grim [7]
    Eastern Essex county (Kearny/Belleville/Newark waterfront) is chock full of abandoned processing plants. The problem is that for a site owner it doesn’t make sense to keep the whole large place alive just to have you lease 3K sqft even for $6K/mo.

  8. anon (the good one) says:

    Jamelle Bouie wrote, “According to the criminal justice system of Florida, you are right to fear African-American men, and if you decide to act on that fear with violence, then you stand a good chance of avoiding conviction, on account of a jury that–more likely than not–will sympathize with your fear.”

  9. Njescapee says:

    10, anon, Are you on drugs?

  10. chicagofinance says:

    Do you print out the Tweets on pieces of paper and slip them into the Wailing Wall?

    anon (the good one) says:
    February 16, 2014 at 1:54 pm
    Jamelle Bouie wrote, “According to the criminal justice system of Florida, you are right to fear African-American men, and if you decide to act on that fear with violence, then you stand a good chance of avoiding conviction, on account of a jury that–more likely than not–will sympathize with your fear.”

  11. grim says:

    8 – Nah, not abandoned at all, very active – which is why the price is what it was. Not that I wanted that specific size, that’s the size that was available. That said, the price is absurd, it would be a decent price for higher traffic retail in a town where I won’t need to convince people they won’t get shot.

  12. cobbler says:

    grim[12]
    I guess there is an opportunity if you think process industries in NJ have future besides an occasional distillery: buy an abandoned site (make sure that the previous owner retains all the environmental liabilities), bring it to shape and lease out in parcels… The state was #1 in the country in fine and specialty chemical manufacturing till 1980s, now it’s probably 1/20th of the former self. I don’t know about any place in the world more unfriendly to this industry than the Garden State (maybe Hawaii – but it’d never had one).

  13. Juice Box says:

    Chi – no way he is a follower, they spend most of days keeping women like mushrooms.

  14. Michael says:

    Spouting some honorable sounding values means little when it comes to business or personal success, or at least, “success”, as Rick and you, Peter N, define it. It’s more like throwing a dart and the drawing the target around it – Bullseye! I once saw a Mad Magazine cartoon of three guys sitting on a bench. Twice, a big fly slowly flies past each until the third guy snatches the fly and eats it. The third time a fly does that, the second guy snatches the fly and turns to the third guy and says, “Do you want to buy a fly?” That’s business, so don’t give us some altruistic BS.

    I have been good friends with several men who were very bright and very successful by your terms, and who ended up much less than successful. My good friend Claude, who passed away a few months ago, was the consummate gentleman. A graduate of Harvard, he and Ted Kennedy formed a water saying business in the back bay of Newport Beach, CA the summer they graduated (more to impress the girls than business). However, Claude went on to become hugely successful and socially significant in So. California – until three kids and a divorce later gave away most of his capital. But he built up again until another three kids and a divorce reduced him to zero. A third marriage to a much younger woman … We’ll you get the picture. He loved and continued to love all his wives and eight children, and never complained about losing his sizable fortune, saying he had a most wonderful life. All he had in the end was Social Security and the love of his children and many good friends.

    My good friend Don has a similar story. A PhD and once the director of quality control for Baxter, a big pharmacy company and in the 1%, he decided to open an executive search firm. I helped him move from Newport Beach to Atlanta. He was very successful. His kids went to a very prestigious private school and colleges, and his daughter debuted in Atlanta society. Marital problems, a divorce, embezzlement by his CFO, and a near nervous breakdown later, he was reduced to a struggling two person operation and too old to rebound. He now lives in the basement of his son’s home in Ohio on Social Security alone.

    Arthur had been very successful as an executive for three major corporations (IBM, NCR, & ?) before deciding to go out on his own. Over the years, he and his wife build a chain of very high end art and gift shops in New England catering to the very wealthy. Borrowing to expand again in 2001, his empire came undone with 9/11 and the combination of loan rate increases and the drop off in sales of luxury goods. He and Donna are now painting houses and actually doing quite well at 70, but says he’ll now never have the savings to retire even though his health is starting to tank.

    Of course, I can also recite the success stories of friends, but the point I’m trying to make is that financial success in business is not just due to brains, hard work, or altruism, but is mostly due to luck. As I’ve gotten older and see those of my generation succeed or fail financially (as in retire with the most toys), I observe the randomness of it. How does one guy who isn’t all that bright and treats his employees terribly succeed, while a bright and good man fail?

    I can only conclude that you who claim superiority due to your position in the 1% are simply full of sh*t.

  15. Michael says:

    Rick October 19, 2013 at 3:07 am
    Here is the Secret to Success: The degree to which you can help other people solve THEIR problems. Because a poor man sees only the $$ he is paid per/hr, where the wealthy man sees only the value he can bring TO the hour. The poor man sees only how hard he works for each dollar, the wealthy man sees only how hard each dollar works for he. The poor man spends nearly all his money on depreciating assets, the wealthy man spends nearly all his money on appreciating assets. The poor man always spends more than he makes, the wealthy man always spends far less than he makes. It has been said long ago that could take EVERYTHING from every person, and in a year the Rich would be rich again and the poor would still be poor. This is why when you see poor people win a Mega-lottery $100Million, $200Million, and in 5 years they are in bankruptcy, are broke, and have nothing. It’s the relationship with a thing that decides the differences with things in every persons life. Some people play small, other people play big. That’s life. But you are ultimately the decider. YOU step it up.

    Jim October 22, 2013 at 9:31 pm
    VERY few people are going to forego investment income just because it’s taxed at the same rate as wages. That’s known as cutting off your nose to spite your face. As I recall, the sainted Ronald Reagan allowed capital gains to be taxes at the same rate as wages, and there is no evidence that raising the rate reduced capital investment.

    I recommend that you read the Congressional Research Services report titled “Taxes and the Economy: An Analysis of the Top Tax Rates Since 1945.” You might remember it–it’s the report that Republicans in Congress suppressed in the run-up to the 2012 election.

    Mancrunch October 23, 2013 at 7:37 am
    Your stereotypes are as silly as they are false. I’ve been around both rich and poor and can guarantee you that not all rich men would regain their wealth once it was taken from them, and not all poor men would lose the wealth given to them. Not all rich people are bright, nor all poor people stupid. Jefferson, for example, was a genius and a very wealthy man. He died in debt. But that inability to multiply his capital meant nothing when we judge whether Jefferson was a success, and no one would judge him to be anything else. His priorities were just not centered on securing more wealth – he found it boring.

    Blaming the poor for their condition is as old as civilization, whether the wealthy claim it’s because they’re stupid, less cultured, or God just doesn’t love them so much as the rich. Keep going Rick and you will soon justify the Divine Right of Kings as the “Secret to Success”.

  16. chicagofinance says:

    Stu: Do you know this place? Is it the goods? Decent beer list….

  17. Street Justice says:

    ‘Negroes and the Gun: The Black Tradition of Arms’
    http://youtu.be/WLxFayuLMGA

    anon (the good one) says:
    February 16, 2014 at 1:54 pm
    Jamelle Bouie wrote, “According to the criminal justice system of Florida, you are right to fear African-American men, and if you decide to act on that fear with violence, then you stand a good chance of avoiding conviction, on account of a jury that–more likely than not–will sympathize with your fear.”

  18. Comrade Nom Deplume in the dark says:

    [19] street,

    The demagoguery of anon highlights the stupidity of a nation.

    A FB friend of mine questioned the verdict. How? How? he wondered. Astonishingly, this FB friend is an attorney. And I had to point out to him that the elements the state must prove for Murder One are different than what they must prove for attempted murder (e.g., premeditation). So the fact that there was a hung jury on the murder one count but verdicts on the lesser includeds means the jury actually deliberated and weighed the evidence. Fancy that!

    But now we have another verdict with a plausible ending, in which the jury clearly deliberated, yet it is not acceptable because it doesn’t placate the mob. Even the jury makeup didn’t placate some of the mob. http://www.nytimes.com/2014/02/16/us/florida-killing-over-loud-music.html?_r=0

    Maybe we should just bring back lynching? Or is it reverse lynching? Hard to know.

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