From the NY Times:
A Chill Is in the Air for Sellers
“Many Americans who planned on real estate as their path to wealth are beginning to find that there are limits to how high is up.”
“Blame market forces. As higher interest rates dampen demand in cities and suburbs that only a year ago were battlegrounds for fierce bidding wars among numerous buyers, sellers are grudgingly lowering their prices to drum up interest.”
“It is a slow leak, to be sure. The most widely used statistic to measure home values, the median home price, shows that once-hot markets like San Mateo, Calif., and Mercer County, N.J., are now registering year-over-year declines. In general, prices are still climbing, but they are doing so far more slowly in cities like Las Vegas and San Diego, which had been lucrative markets for speculators.”
“Prices in most of California and the Boston-to-New York corridor could also fall, said Mark Milner, the company’s chief risk officer. Its statistics, which lag the current market by about two months, show homes continuing to appreciate, but at a slower rate.”
“After open houses for their four-bedroom, two-story ranch house in Lawrenceville, N.J., brought in no offers, Mary Ellen and Anthony Pierrard are telling potential buyers they are willing to negotiate their $420,000 asking price and are even considering enlisting a real estate agent to help them market their home. That’s a far cry from the couple’s experience selling two houses on their own in Rockland County, N.Y., a few years ago.”
“Robin L. McCarthy, a real estate agent who works in nearby Princeton, N.J., said homes were sitting on the market three to four months, when houses sold in as little as a few days a year ago. Houses that would have been the subject of intense bidding wars now sell for slightly less than asking price.”
“”Buyers are afraid that real estate prices are going to go down, so they are very careful,” Ms. McCarthy said. “They don’t want to pay too much.””
Ba ba ba ba ba ba BOYCOTT HOUSES!
Prices are way way way to high vs incomes.
Boooooooyaaaaaaaa
Bob
GSML House listings
Inventory going up everyday everyday.
5/4/2006 28,209
5/8/2006 28,471
5/9/2006 28,587
WAIT!
Inventories will be over 40,000 by the fall. And they say there is a shortage of housing. Only thing there is a shortage of is Rationally priced housing. Gluts of insulting priced houses.
The tide is turning. Panic will be setting in.
Ba ba ba ba ba BOYCOTT HOUSES!
Booooyaaaaaaa
Bob
Check this out.
http://www.files.bz/files/11251/RealEstateValuationMethods.xls
Plug in rational numbers so not to overpay and be a bagholding fool.
Booooyaaaaaaaa
Bob
Bob that link does not work
Sorry.
Go to Ben’s “The Housing Bubble”
Go to article “Show No pity”
Comment by Gekko
at 14:28;23
Great spreadsheet for home buyers.
BabababababaBOYCOTT Houses!
It’s all business Nothjing Personal!
Booooooyaaaaaaaa
Bob
grim: I read the article this morning while commuting to work. While I think it is the best they NY Times has doen to date on the housing bubble, I get the impression that the two writers of teh article, just cannot bring themselves to admit that the bubble is bursting, and the party is over.
The nature of the writing appeared tortured to me, just my own thoughts, but I did love the for sale sign (on the front page of the business section) covered with ice, that wa great.
grim: I read the article this morning while commuting to work. While I think it is the best the NY Times has done to date on the housing bubble, I got the impression that the two writers of the article, just cannot bring themselves to admit that the bubble is bursting, and the party is over.
The nature of the writing appeared tortured to me, just my own thoughts, but I did love the for sale sign (on the front page of the business section) covered with ice, that was great.
Grim:
Could you please help to check how long this has been on the market? any price reductions?
It seems a vacant property now.I know it is very close to a busy street, probably it is why it is not sold.
Thanks,
MLS: 2236980
The link worked fine, it’s just long and scrolls out of view.
Triple-click to select the whole line, then choose “copy.”
“The nature of the [NY Times] writing appeared tortured to me…”
That’s SOP at the NY Times — some of the hoops they jump through to dance around reality are quite amusing.
Anon, MLS 2236980 was originally put on the market @ $839,000 Jan 20, 2006.
It’s now at $789,900, and will probably be at $650,000 in six months.
Note: it may have been listed under a different MLS for a higher price.
I once asked a realtor how they could want $350,000 for an old beat up bungalow in Greenwood Lake NJ (middle of nowhere)
The realtor responded: “It is only 45 minutes from NYC”
It will be a happy day when the minutes from NYC ploy will no longer hold any merit.
Re 2236980, I don’t know, that house doesn’t too overpriced given the size age and the township (Bernard’s Township is an excellent town). That is a busy street leading to 287 , there is an oil tank (probably underground) so that limits the price of the house, but I dont’ see it falling to 650K in 6 months.
Grim,
Can you find out any information on this MLS: 2601726. I’d like to know how long it’s been on the market and if there have been any price reductions as well.
Thanks!
That home was purchased for $415,000 in 1987, during the last bubble.
The inflation adjusted price of that home is somewhere around $700,000 (if you trust the government supplied numbers).
Good example of why not to buy at the top. In 20 years they’ve seen very little real appreciation. However, we’ll need to see the sale price to pass final judgement.
Or, looking at it another way, it took a second asset bubble for this seller to be able to recoup their initial investment.
grim
One of the writers is a blogger on NYT blog “the walk through”. For a while he was going to the bubble blogs to get ideas for his blog. I don’t even bother visiting it anymore. Damon Darlin just baits people with the notion there is no bubble to get comments otherwise there is little dialog over there.
“Re 2236980, I don’t know, that house doesn’t too overpriced given the size age and the township”
How much do you think it was worth in 2001?
“I dont’ see it falling to 650K in 6 months.”
12 months?
perhaps if the sellers start putting the signs up in spanish, they will start to move.
Grim posted the house’s history (415K in 1987). That amounts to around 4% increase since 1987. Doesn’t seem like that much to me, although as Grim points out 1987 was also the peak of a bubble.
But the buyer got to live in what looks like a good house in a fine town for nearly 20 years, so they may well consider themselves ahead of the game.
I don’t see it going to 650 K in 12 months either unless there is something majorly wrong with the house or its surroundings that is not obvious in the listing.
I think I may have deleted someones post by accident while cleaning up spam. Sorry if I did.
grim
gg,
You overestimated the percentage, it’s more likely around 3%.
jb
One of the Real Estate agents quoted to us yesterday for Edison-Middlesex.
“The inventory is moving fast with the close of the current school year, the properties can be available today and under Attorney Review or Contract tomorrow”.
Do you belive this?
KBR
Grim — I used calc, and in 19 years its around 3.44% per year.
“I don’t see it going to 650 K in 12 months either unless there is something majorly wrong with the house or its surroundings that is not obvious in the listing.”
Isn’t that another version of the “Houses in Summit Never Go Down in Value” thesis?
:)
This house will go down in value, because the market has changed, not because of its location.
“A realtor said: The inventory is moving fast with the close of the current school year, the properties can be available today and under Attorney Review or Contract tomorrow”
A few months ago I went to an open house, and said offhand “The market seems to be changing,” to which the realtor replied, “This house is already in attorney review, this open house is just for backup offers.”
The house indeed went into attorney review, and three days later, was back on the market.
Buyer got cold feet/came to their senses, apparently.
Guess that realtor wasn’t so smug after that.
Ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba ba BOYCOTT HOUSES!
Boooooooooooooooooooooooooooyaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Bob
Ba ba ba ba BOYCOTT GAS!!
Prices way way way to high vs incomes.
Boooooooyaaaaaaaaaaaa
Bob
GAS PRICES TOO HIGH!!!
PA PA PA PAAAAAANNNNNIIIICCCCC!!
GAS WILL BURST!!
Booooyaaaaaaaaa
Bob
Grim:
re: MLS: 2236980 I have to respectfully disagree with you. Due to the facts that you pointed out, I would have to say that this house will not sell for a penny over $650,000. In addition, I agree with Unrealtor in that it will take only 6 months.
Check out MLS:2264717. This home, also located on Mt. Airy has been on the market for months. It has also experienced several reductions, and the owners still can’t seem to sell it. Now, this house is extremely young for Basking Ridge/Bernards Township, it doesn’t have oil heat, has 5 bedrooms, and is on a bit more land than the other home. I don’t think this house will sell for a penny over $700,000. Honestly, I think they would be lucky to get $700,000. For that reason, I think it is impossible for the other house to sell for any more than $650,000.
Again, this is all my opinion, but I have been hunting in Basking Ridge/Bernards Twshp for a long time now…actually too long.
If anyone wants either of these houses…I would say low ball, so you can be part of Grims list in a few weeks. Both houses are vacant, and have been for an extremely long time. Don’t know how long the bridge loans will go…TAKE YOUR CHANCES IF YOU ARE INTERESTED. Good Luck!!!!
-CJ
CJ — I will defer to your knowledge of the Bernards Township market. I myself have not been interested in that market because the commute to New York becomes too hard.
I looked on realtor.com, and there seems to be a good deal of 4 bd 2.5 bath houses in the 600-700 K range in Basking Ridge. Certainly far more than in neigbors Warren, Long Hill, Watchung etc.
True, there are several houses in the 600-700 range. However, they all have issues. Several are located on wet lands. Not sure if you are familiar with wet land issues, but definitely not anything you would want to go near. Others are located on streets that look like they belong in Arkansas. And finally, the best of them all had to be a house that was missing load bearing walls in the basement, and instead had 2×4’s on bricks holding the ceiling up.
If all of these things aren’t a problem…then you can definitely get a house in that range.
Whats your opinion on Mendham??? I went there recently and fell in love. How much do you think the prices will drop there????
-CJ
CJ — I liked Mendham, but did not seriously consider it because the commute to Manhattan becomes a little too much. I’m not familiar enough with the market in Mendham to say how much it might drop, but in general, places that have seen the largest rises, the most speculation, are the most vulnerable.
If commuting to New York wasn’t an issue, I’d consider Clinton or Alexandria township.
I received the below email a person who lives in New Milford):
Is it possible that the original prices on the list of houses were primarily high speculation prices?
I don’t disagree that the drop in prices are and reflecting higher mortgage interest rates.
The statistics on employment recently sent the stock market up.
Comparative price drops on homes in the 350’s and lower 400’s from what I see locally in the Bergen Record
have not taken the substantial price reduction.
Cash is not king just yet!
Immunity in Bergen county. I doubt it.
Prices have escalated there as much as anywhere else, maybe even more so. I really would like to see original price, the current prices, and what a property finally closes at for communities in Bergen County.
Can you get access to comp’s like that?
I doubt there is any difference between Bergen County and the rest on NJ.
Grim Ghost – did you consider the train from Madison/Convent?
My preference would be Montville/Whippany since it’s just a 45 min ride downtown and the stop is
Anon — I did look at Madison and Florham Park a little. However, the prices seemed way too high for anything that was even halfway decent. Also, I know there is huge traffic near most of the stations on that line at peak time. I really don’t think its possible to get there within 10 minutes from almost all areas in neighboring towns.
Also, even from Madison there are maybe only 1-2 trains that can do it in 45 minutes.
My preference is for the towns along the Gladstone line. Frequency is lower, very few direct trains (but that bothers me less since I prefer to change at Hoboken). The stations are much smaller and more rural, the towns (New Providence, Berkeley Heights, Long Hill, Watchung) are less crowded.
randolph
any one have thoughts on randolph…it is a bit of a commute to nyc but the school systems seem very good and the prices ‘relatively’ reasonable relative to other towns…unfortunately we are moving from out of state and have young kids so would like to buy sooner than later
Hello Boycott Bob:
Please direct me to the article below:
Go to Ben’s “The Housing Bubble”
Go to article “Show No pity”
Comment by Gekko
at 14:28;23
Great spreadsheet for home buyers
thank you
ArrElle
Here’s the home buying spreadsheet mentioned earlier. (Simply triple-click long URLs to copy them.)
Here’s a shorter URL to the spreadsheet for those who can’t seem to triple-click?
http://tinyurl.com/ggfzp