It’s Wednesday again, so time for the weekly inventory update:
GSMLS
Bergen
9/28 815
10/5 833
Essex
9/28 1920
10/5 1918
Hudson
9/28 97
10/5 100
Morris
9/28 2526
10/5 2540
Passaic
9/28 1374
10/5 1408
Somerset
9/28 1641
10/5 1677
Sussex
9/28 1598
10/5 1560
Union
9/28 1760
10/5 1767
Warren
9/28 804
10/5 808
Total
9/28 12535
10/5 12611
All in all, slight increase in inventory in GSMLS, nothing really noteworthy as far as week to week increases go, I believe it was on the order of 0.6%. Notable is that the GSMLS changed their system/database on 10/3, I noticed a drop in active listings at that time.
NJMLS
I’m having issues with NJMLS this morning, all sorts of errors with the database, however I did pull data yesterday, so I’m going to post up a shorter timeframe anyway, but just the totals.
Total
9/28 5455
10/4 5542
These figures are more in line with expectations, an increase of about 1.6% for 6 days. If they resolve their issues later in the day, I may edit this post to include the new values.
One last tidbit I’ll throw out, and it’s completely anecdotal, so take it with a grain of salt, but it seems like the days of price increases are long gone. The hot sheet price changes are almost fun to read these days. However, there is still a fair share of overbidding in certain “hot” areas.
Caveat Emptor,
grim
overbidding is right. it’s in the usual hot areas in essex like montclair, milburn, short hills, summit and maplewood. i believe this is mostly wall street money where relative to similar places in NYC prices are a steal. if you get away from easy commuting areas, the picture isn’t so rosy.
Grim,
I am starting to notice some increased inventory in my neck of Bergen county. I really like your blog. Keep up the good work.
P.S. Richard, Summit is in Union county.
First post here; the slowdown may be due to the end of the summer season and parents who already moved to the city of the school system they want their children in.
In any case; it’s not surprising either way. The prices are only being fueled by the greedy realtors. Remember the famous names of the dot-com era? People who praised companies like Amazon, CMGI, Real Networks, PETS.COM, Lycos, Redhat, etc.. Where are they now? Where are those stocks now? There has to be VALUE in a house in order to sustain such fast increases. A fixer-upper for $500k? My my… Sounds like buying Worldcom when it was at $70/share..
The fact is, now people have a lot LESS equity in their homes. I don’t see the logic in that “interest rates are low so you can afford more”.. Bull. They just used it as an excuse to make more commission. The only people who made out with the low interest rates are the people who bought in 1998-2001 at 7-8% and refinanced when the rates went below 6%. Everyone else (in my opinion) got screwed!
I’m just curious how many people’s salaries increased more then 40% in the last 3 years…
I got caught in a bidding war in Maplewood, which is still a relative deal compared to other areas in NY, NJ and CT. However, it never ceases to amaze me that they are trying to get people to pay 500Gs for a house that borders on Irvington, and in a school district that SUCKS. None of these young people will stay in Maplewood to improve it either. They all just dream of Millburn. Thanks but no thanks.
Various reports I read suggested that the housing price will be down 20%-30% in NY, NJ, CT area. Some reports suggested that it will happen starting 10/17 (new Bankruptcy law) and will pop between next Spring and Summer. Does anyone buy this prediction?
njgal, maplewood is crazy. i’m renting in south orange in the village so i know the market well. many DINKS (double income no kids) are buying properties way over asking because of the nice village and the proximity to the city. the school system isn’t what it used to be, especially Columbia High School and the taxes are just atrocious. the houses will always maintain some value because of the train line but i don’t see how much higher they can go once the market really cools down.
Do you really think buyer/seller psychology can change that quickly? People can, and will hang on waiting for things to improve. I don’t think we’ll those massive 20-30% drops next year. If for some reason we do drop by 20-30% by next summer, it’s only a step on the way down. The real pain will be seen with ARM readjustments in the coming 2-3 years. I can’t imagine being in a worse financial situation. Likely not being able to claim bankrupcy, paying a mortgage payment more than double what the home is worth, not being able to sell it for enough money to cover the mortgage. Standard of living is going to be in the gutter as those folks are held captive in their golden prisons.
grim
The supply of homes in Franklin Lakes is equal to one year of inventory, this comes from all places realtor.com, market conditions. The supply in Saddle River and USR ia at around 8 to 9 months.
As of this morning there are over 2700 listings on njmls for Bergen County
In my own zip, nothing has sold in weeks, and many houses have been on the market 3 to 6 months. price derductions are becoming common.
I certainly believe we can see a 10 to 20 5 correction by Spring/SUmmer of 06, in my zip sold prices are down at least 5% from this time last year.
A far as Maplewood, people are out of theri minds spending that kind of money there, the town has serious issues.
I’m so glad I’m not alone in being thankful that I lost that bidding war in Maplewood. The town is very cute and it is a good commute. However, I cannot imagine myself paying those taxes or sending kids to those schools. As a DINK, I expect to have kids soon enough and my greatest fear would be buying into a crappy school district and getting stuck there with an upside down mortgage when the bubble pops – when prices drop in good areas, they are sure to drop in the more “borderline” areas.
I have heard, anecdotally, that many of those Maplewood places go for 100K over asking. I lost to someone who went a mere 25K over.
This housing bubble makes the 1980’s-early 90’s bubble sound like a meow.
It was ugly back then. Really ugly. Don’t be fooled it won’t happen again. It will. This time however the mtg debt is much higher as well as other consumer related debt. Back then credit was tougher to come by. More people are highly leveraged today.
This will unwind much quicker than early 1990’s bubble due to higher levels of debt and greater more free flowing of information coming from interbet and 24 hr news media.
The big chill is on. Prices are going down and inventory is moving on up.
A past bubble veteran. All in my opinion of course.
Article from Oct. 4 on NJ Economy…
http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20051004/UPDATES01/510040349
I agree with the post about leverage. Live by the sword, you shall die by the sword. When a illiquid leveraged investment turns against you, YOU ARE F*CKED
njgal A rising tide lifts all boats, and that is what this bubble has done, there are areas near me where people were paying ridiculous amounts, for towns they should not have purchased in. Now those towns have high inventory, just like the towns on the high end.
It is just like the last down turn, started on the high end, and the low end,a nd than spread to the middle. Keep in mind many people coming from NYC know little about Jersey, and the realtors home owners know about it, and take advantage of it.
I was in a social situation a while back, where somebody was joking about the people who ourchased there Aunts house and how clueless they were, paying that kind of money in that town.
The comment they made was”they were better off staying in NY”
So true pascackvalley. A 500-600K house looks cheap next to a million dollar one bedroom apartment I guess!
I met a couple from Mass last weekend looking at an 850,000 “fixer upper” on Upper Mountain in Montclair (corner of Claremont if you know the area). It’s a wreck of a house that needs at least 250,000 worth of work, maybe 150,000 if you contract out all the major work and finance the rest with sweat equity.
The place has been falling apart for years and years, a youngish couple owned it, I’m sure they didn’t pay more than 150 for it a few years back, and believe me, any hackjob work they did, would likely need to be ‘redone’.
The couple was very interested, I talked them out of it, they didn’t realize the house was sitting for months on the mls, and finally went fsbo with a 50k price drop. Granted, it *can* be a nice house, but the location is lacking, not exactly the most desirable section of Upper Mountain. At 400 it might be worth it. They didn’t realize that any good deal in Montclair would have been snatched up by contractors and remodelled months ago. I sure hope they didn’t change their minds..
Caveat Emptor,
grim
The value people put on money today is shocking. Of course when you are using an interest only loan or some risky new creative financing scheme to get in with very little down, you will not have same feeling as if you had worked and grinded to save for a 20% down payment.
The people that are selling and moving up are playing with monopoly paper. Well that monoploy paper is falling in value now.
The RE market is popping now.
Track this:
http://www.realtor.com/Prop/1051851412
It’s a 2 br/1 bath brownstone (walkup) condo in Hoboken. While it has nice details, it does not incude a parking spot and sits roughly a mile from the PATH.
All this can be yours for….
better sit down…
$790,000.
:drum shot, cymbol crash, audience laughter:
Or you can keep your $160,000 down payment and rent a very similar property for less than half the monly carrying costs of this “gem.”
If is sounds insane it is insane.
It’s that simple.
I know that we have all talked a lot about the early 1990s condo crash in NYC, but out of curiosity, how did that effect the suburban housing market? I am assuming it did, but I have never heard of anyone specifically talk about it.
“I am assuming it did, but I have never heard of anyone specifically talk about it.”
I did. Indirectly anyway.
There was this US News&WR cover story “The Great Housing Bust” that I remember reading at the gym circa 1989/90 or so.
I opened to the story and the big photo they used for the top half of the headline page featured this unhappy looking couple and two kids standing in front of a house which they couldn’t sell. The house/yard looked familiar.
Reading the article, I confirmed my hunch: the house depicted was on Grant Place, Little Silver. (And less than a half mile from where I grew up.)
I also recall a neighbor of my parents remarking about all of the “for sale” signs up along Rumson Road. “No one seems to be able to sell their houses these days.” She remarked.
The suburban housing market got waffled just like NYC condos.
Condos in NJ fell about 50% in price and houses about 25% (some areas fell more).Lots of for sdale signs and real estate was not in demand at all.
The real estate bubble this time is much worse so it could be worse.
Hi,
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Regards,