This is a story out of Boston/Mass however I think it is important to post here. We’ve already started to see beginnings of similar behavior in Northern NJ. Boston and Mass begun their decline earlier than the NNJ market, thus may serve as somewhat of a predictor of things to come for Northern NJ.
Cuts of up to 20% are now common as analysts see signs of a ‘hard landing’
Boston-area homeowners trying to sell their houses are sharply reducing asking prices — in some cases, by $100,000 or more — in response to the sudden slowdown in the real estate market.
…
The median price of a single-family home in Massachusetts has dropped 7 percent in the past two months, to $349,000 for sales that closed in October. But reductions in asking prices of 10 percent or 20 percent are now common in both high and moderately priced neighborhoods, according to real estate agents and listings of homes for sale.
…
”The evidence — both early data and the anecdotes — are pointing more toward a hard rather than a soft landing” in the housing market, said Nicholas Perna, an economic consultant in Ridgefield, Conn. ”Prices could come down. Could it be 10 to 15 percent? There’s no way of knowing, but what we’re getting is more clues that you’ve got a decline in prices underway.
…
Last February, Gary and Susan Kazmer were confident of selling their Foxborough home for $949,900. He had landed a high-level job in Manhattan, and the couple planned to relocate their three daughters during the summer to a house they purchased in Mendham, N.J., with a bridge loan.
They built the Foxborough house on a pond in 1997 and filled it with extras: two marble fireplaces and hardwood floors with dark cherry borders. ”We called it our wow house,” he said.
But it attracted little interest at that price, and Gil Campos of Re/Max Real Estate Center in Foxborough lowered the price to $899,000 in early August. Since then, it has been reduced four times, to $800,000. ”That’s an unbelievable spiral,” he said.
The Kazmers’ limbo ended this week, when they accepted an offer, which Campos declined to disclose.
Like I’ve said before, we’ve already begun to see the beginnings locally. It’s only a matter of time now before we’re headed down the same path as the Boston area. Until then, enjoy the snow!
Caveat Emptor!
Grim
Forgot the link..
Chop chop chop!
I agree that Boston is a harbinger of things to come for the tri-state area. it won’t be as bad in tri-state however because Boston’s economy is weaker and more reliant on housing
I’m not sure I follow, why is Boston’s economy more reliant on housing?
I posted this article back in Nov, not sure you were around during that timeframe..
http://moneycentral.msn.com/content/Banking/Homebuyingguide/P132743.asp
Where construction is doing the heavy lifting:
Metro area Share of job growth
1) Bergen-Passaic, NJ 71%
2) Columbus, OH 68%
3) Buffalo-Niagara Falls, NY 62%
4) Riverside-San Bernardino, CA 33%
5) San Diego, CA 31%
…
21) Boston, MA-NH 11%
These numbers are only new construction jobs. 71% of new jobs created in the Bergen-Passaic MSA were due to construction. Add in at least another 5-10% for the mortgage industry, real estate industry, appraisal, jobs created at the home remodelling retailers, etc.
jb
But don’t most people who live in N.NJ work in NYC? Job growth there hasn’t been dominated by construction.
I admit that I’m guessing about Boston’s economy relative to NY-metro’s. But Boston always seems to fall harder during a downturn and I suspect it’s because the do not have as diverse an economic base as NYC-area
the cuts are from nosebleed to ridiculous. until i see real declines i’m not buying
The Plunge is happening but the real estate industry and sellers will be kicking and fighting it all the way down.
LOL!!!!
Real Declines are 35% for houses and 50% for conshacks.
Everything else is BS. These drops only take prices back to 7% compounded growth levels. So homeowners are still enjoying huge appreciation historically in this 5 year time frame.
If you pay these prices do not expect to make money for 12 years at least.
Declines alone, even if they decline by 50% and to a ‘reasonable’ levels should not be a criterian, attraction and motivation to buy. ‘Real Affordability’ is factor that should be revived, something peole have all but forgotten.
Not everyone in NNJ works in the city; I’d say there’s a large population that does, but we do have a pretty good job market in NJ.
Wages are close to NY City wages for some fields, but worse off for others.
I’ve worked on and off in the city, my preference is to work in state. I can’t stand relying on mass transportation..
-Richie
A 16% drop and realtor would not even disclose contract price. Assume it is even lower.
Great news, but this is ONLY the beginning of the drop.
I believe that 40% declines are going to bottom this thing in 2 about years. In my opinion of course.
Then sanity will finally come back to the housing market.
Glad i sold my house at the top.
I would say the bulk of the people working in Manhattan are from the core counties. I personnally know that the northern counties of Sussex and Warren has only 1 percent of it’s population going to Manhattan. I could crunch the numbers and map it if folks want to see. I could do it by county or municipality.
BTW I was at a NJ data conference this past week. NJ is hemorrhaging high tech jobs. Pharma accounted for 30% of those high paying jobs in 2000 now it is down to 26%. A decay rate of 1%. Counties that formerly ranked in top median income used to be Somerset and Morris now Hunterdon. Let’s see AT&T: somerset, pfizer & merck: morris. I don’t know why Hunterdon eked out past them but I suspect it is the dispersal of wall street jobs mandated as a result of 9/11. Hopewell snagged Merrill Lynch.