From Newsday (Hat tip to Ben at the Housing Bubble Blog):
Housing market pace is slowing
Say one last farewell to the housing boom.
In the clearest evidence to date of a housing market shift, the latest Long Island data showed Nassau County’s median home price rose only 4.4 percent from March 2005 to March 2006 – the smallest annual price gain since May 1998.
Nassau’s median home price stood at $470,000, the same level it was in June 2005, according to the Long Island Multiple Listing Service. Suffolk County reported a 6.2 percent yearly jump, to $396,800. Queens is still far stronger, with a median price of $475,000, a 13.1 percent gain from March 2005.
While that’s nowhere near a housing market collapse, it’s certainly a sign of significant change that could impact the regional economy. Adding to the pile of evidence, the number of homes for sale is still 74 percent above last year’s levels for the three counties, while closed sales in the region are down 6.7 percent.
Indeed, the supply of homes is far higher than last year. Based on the current selling pace, it would take more than eight months to sell the total supply of Nassau homes for sale, and nine months to sell Suffolk’s inventory, the highest since 1998.
The numbers aren’t a surprise and some are expecting more to come. Ed Gitlin, a broker for Century 21 Benjamin, with offices throughout Long Island and Queens, said he foresees 10 percent annual price declines on Long Island – perhaps as soon as June.
10%?
If buyers go on strike everything will crash.
40% crash just around the corner.
This will takes us back only to about 2001-2002 prices. so really not that bad.
just random guessing, but I expect most sellers to try to hold out through the summer. once August hits, look for panic selling to begin
http://money.cnn.com/2006/04/18/real_estate/agents_bearish_in_blogs/index.htm
“Ed Gitlin, a broker for Century 21 Benjamin, with offices throughout Long Island and Queens, said he foresees 10 percent annual price declines on Long Island – perhaps as soon as June.”
Here it comes — the summer of pain for ®ealtors and sellers.
Boycott open houses: Empty sign-in books. Zero foot traffic. Agents alone and bored out of their minds from 1-4PM every Sunday, all summer.
Time for the Buyer Squeeze to enter play.
Another failure mode to think about, negative amortization limits on payment option mortgages.
When using a Payment Option ARM, you typically have 3 payment options. A negative amortizing minimum payment, and interest only payment, and an amortizing payment. Sometimes these are coupled with a low intro teaser rate, which is also a negative amortizing payment.
Once the neg-am limit is hit (125% in many cases), the minimum payment may be raised to the fully amortizing amount, a huge jump compared to the initial teaser payment.
grim
Falling Prices.
Ba ba ba ba ba BOYCOTT Houses
No buyers = desperate sellers + starving realtors
Boooooyaaaaaaaaa
Bob
Need advice –
I have an SFD in Morris County for sale. Reasonably priced (I know how appraisals work and took care to price it below current sale value of similar homes). I have an immediate (definite & qualified) offer for $510K. A home next to me (pretty much similar value – I would claim my location is better) has closed for $545K a couple of weeks ago. Another home a couple of houses down is turning down offers of $535K.
Would you take the offer OR would you wait for a better one ?
The primary (and the only) reason I am selling my SFD is financial – I am strapped for cash and have hardly any income currently. Of course, I am attached to my home emotionally and I will miss the step down in the quality of life.
Thanks
If you need the money and there is an offer on the table, I think you should take it. You have to think about how much it is costing you to hold it every month, and if the extra 20k you might make will be worth it
What is your ask?
How long have you been on the market?
Have you countered?
You are FSBO? If the others were sold by a broker, you could argue that you are pocketing the same amount of money as your former neighbors, so your deal could be on par net-net.
Morris County, you may consider a slight counter-offer ($10K bump), but it sounds like you’re in no position to lose this buyer.
Weigh closely the hypothetical “loss” of not getting the $545K your neighbor sold at, with the real loss of not being able to pay your mortgage, and not being able to sell at all in a few months.
If you have owned the house for several years, you’re not “losing” anything, you’re cashing in on all that equity.
Thanks NJR, chicago & unrealtor. It costs me close to $4000 a month to keep it.
I am FSBO (but I have listed it on the MLS via a flat fee service and am paying 2.5% to the buyer agent).
I am very poor at negotiations & countering. The buyer’s realtor is good at that.
The house has technically been on the MLS for about 8+ weeks but I have not had the house clean & empty enough to have an open house or show it to the buyers ytill recently. I got the offer in the weekend of the 2nd open house.
Unrealtor, you are right – I am in no position (financially) to take the uncertainity of not taking the offer. (You are right about the house price having done well – but I have pretty much refinanced the equity away it away to spend on the business that I am attempting to start).
I wanted a sense check on this again by asking a question on the forum – because I felt the buyer did very well (he sold a house in Sussex County for about $470K and will move into mine. His house in Sussex County – both lot & home – seems to actually be a little smaller than the one I have).
Anyway – it is all my fault for being careless with my finances for the last 2 years.
Thanks again, guys.
Morris County, rather than rehash any mistakes you may have made, I would suggest you contact an attorney who specializes in real estate, to advise you through this deal.
The attorney could probably negotiate you that extra $10K easily, and I would expect a flat fee from them of less than $2K, so you would be $8K ahead.
Either way, $10K extra or not, it sounds like you would be in better shape moving forward with such a person working on your behalf.
Many Morristown real estate attorneys here:
Long link:
http://lawyers.findlaw.com/lawyer/lawyer_dir/search/jsp/stdSearch_process.jsp?stype=BY_ADDR_OR_ZIP&target=FIRM&practice=FL43&city=Morristown&state=NJ&submit=Search!
Short link:
http://tinyurl.com/ny99o
(long list, scroll down)
I certainly plan to hire a RE attorney. But I think I have already miffed on the negotiations by agreeing to it verbally (so the price is “set”).
Another fact that I did not mention was that the house that sold next door was that of a realtor (she was no big-time realtor, but certainly is one). I don’t know if that made a difference.
Morris County,
Would you care to provide the MLS number? Or would you rather stay private (it’s OK if you don’t want to). If you do, you can be secretive about it so only those readers who are agents or in real estate would be able to find your listing (last 3 digits of the MLS number, etc) but don’t say what town.
grim
Grim,
2244470 and 2259452 are similar to mine (but they are NOT my house).
I prefer to not leave mine as I am concerned about my privacy.
Understandable, I don’t think I would have provided that info either.
The comps you provided are ‘good enough’ to get a rough idea. I’ll go back through similar past sales to try to get you a recent % under asking figure.
The numbers you want to look at are comps on actual closed sales, not other asking prices or anecdotal info on ‘offers’. Usually your listing agent would have provided this kind of information, but since your FSBO, you don’t have that luxury.
grim
The nicest thing I can say about LI is that it is so ugly iy makes Jersey look good.
Morris County,
My two cents (since you put the issue out there for discussion):
you have a bird in the hand. holding out for maybe 5% more doesn’t make a lot of sense, especially since the market seems to be moving south rapidly. Three months from now, many sellers may be wishing that they could sell for only a 5% discount.
One other thing: take whatever advice you get here with a grain of salt (including mine). You are on a real estate bubble site, after all. Not saying people on here aren’t relatively informed, but still.
Best of luck
Morris County..
Here are the sales in a similar price range from the last few months:
Doric Ave
OLP: $525,000
Reduced to: $509,900
Sold: $490,000
DOM: 132
Timberlane
OLP: $528,800
Reduced to: $519,800
Sold: $506,000
DOM: 54
Birchwood
OLP: $524,900
Sold: $511,500
DOM: 31
Rockaway
OLP: $524,900
Sold: $500,000
DOM: 117
Ser Del
OLP: $585,500
Reduced to: $536,000
Sold: $510,000
DOM: 147
Sandalwood
OLP: $548,000
Sold: $540,000
DOM: 91
Brooklawn
OLP: $549,000
Sold: $550,000
DOM: 15
Arthur
OLP: $549,900
Sold: $540,000
DOM: 16
Twin Oaks
OLP: $558,000
Sold: $545,000
DOM: 12
Rockaway
OLP: $605,900
Reduced to: $565,000
Sold: $545,000
DOM: 116
South Beverwyck
OLP: $575,000
Sold: $525,000
DOM: 87
Rockaway
OLP: $599,900
Sold: $575,000
DOM: 93
Guys,
Thanks for the time & the advice Also grim – thanks for the time on the research. As I mentioned earlier, I am going ahead with this. But I was feeling like a real chump initially.
Morris County,
Your ride isn’t over yet. You should have someone guide you through this transaction if you think you may get screwed (which sounds like your concern).
The only person who would be willing and capable of watching your back at this stage would be a real estate attorney.
I think you should get one in the loop as soon as possible (weeks ago), since you’re not using a realtor and are FSBO.
Bouncing this deal off a forum of strangers, while possibly helpful, is risky with your $500,000 asset on the line.
Get that real estate lawyer in the loop very soon, and make sure they work for a flat rate to both provide advice, and close the deal.
PS: anyone who thinks this advice is not correct, please chime in.
Best of luck!
“The nicest thing I can say about LI is that it is so ugly iy makes Jersey look good.”
Where have you looked? The North Shore of Long Island is one beautiful town after another — Manhasset, Great Neck, Roslyn Harbor, Glen Cove, Oyster Bay, Muttontown, Huntington, etc, etc.
Good advice Unrealtor regarding the attorney. We both bought and sold our last home FSBO. Used an attorney each transaction, cost was very reasonable. We paid by the hour, but he gave us an estimate. No problems at all.
Good luck to you Morris County Anon, it is always good to get something sold when it is time. I learned my lesson once by holding out for my price on a used car I was selling, ended up selling it for less. Yikes! It was a nice car. But as others have said, this is a blog with lots of ideas from folks you don’t know, so take it all with a grain of salt.
I meant that I held out too long on the car and sold if for less than I could have if I’d taken the first, much more reasonable offer. Rode that one down…
“The nicest thing I can say about LI is that it is so ugly iy makes Jersey look good.”
I’m with you unrealtor – obviously whoever said this was looking at a tiny portion of LI. Even my husband, who hates the island, admits that those towns are gorgeous and that certain areas of Suffolk can’t be beat.
Besides, there are certain areas of NJ that make Queens look like paradise – your point?
Sweet blog dud.
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