Lowball! takes a look at home sales over the past week from a very different perspective. For those new to Lowball!, a lowball offer is when a buyer offers a significantly lower bid than asking in hopes that the seller accepts the offer. We take a list of home sales over the past week and pick out the sales that have the highest percentage difference between asking price and selling price.
Lowball! is to show buyers that the market has changed and buyers now have considerably more leverage than sellers. Just a short time ago, lowball offers would have been laughed at and discarded, however, not any more. The fact that so many under-asking offers are being accepted is clear proof that the market is changing.The list does not contain all sales, I hand-pick the most interesting sales from the list. These listings might be the highest dollar drops, biggest percentage reductions, or sales in towns that are thought to still be ‘hot’. Please note, even with double digit percentage reductions, these homes are still incredibly overpriced.
On to the list!
MLS# 2210326 – Franklin Twp, NJ
List Price $536,000
Sales Price $326,000 (39.18% Lowball!)
MLS# 2089837 – Clifton, NJ
List Price $285,750 (Reduced from $299,000)
Sales price $225,000 (21.26% Lowball!, 24.75% off OLP)
MLS# 2112522 – Elizabeth, NJ
List Price $305,000
Sales Price $250,000 (18.03% Lowball!)
MLS# 2078802 – Wayne, NJ
List Price $1,199,999 (Reduced from 1,249,999)
Sales Price $985,000 (17.92% Lowball!, 21.20% off OLP)
MLS# 2096975 – Wyckoff, NJ
List Price $1,200,000 (Reduced from $1,800,000)
Sales Price $999,999 (16.67% Lowball!, 44.44% off OLP)
MLS# 2087067 – Orange, NJ
List Price $399,999
Sales Price $336,000 (15.98% Lowball!)
MLS# 2210985 – Bernardsville, NJ
List Price $4,295,000
Sales Price $3,650,000 (15.02% Lowball!)
MLS# 2101148 – Green Brook, NJ
List Price $318,750
Sales Price $280,000 (14.83% Lowball!)
MLS# 2200384 – Wayne, NJ
List Price $529,000
Sales price $465,000 (12.10% Lowball!)
MLS# 2085211 – Bloomingdale, NJ
List Price $379,900 (Reduced from $450,000)
Sales Price $335,000 (11.82% Lowball!, 25.56% off OLP)
MLS# 2093395 – Rockaway, NJ
List Price $450,000
Sales Price $400,000 (11.11% Lowball!)
Hope everyone is enjoying the weather this morning. The open houses will certainly be very quiet today.
Caveat Emptor!
Grim
Is that first one Franklin Twp in Somerset County and what were the details of the house?
Somerset. 4br/3ba split level circa ’59 on 1.43 acres.
grim
They asked way to much but sale price is interesting. That range listings are for 50 year old 3/1 ranches on half and acre in bad condition.
Very good to see.
Relax kick back and watch the cascade down in prices.
A great study in human psychology. The exit door has closed. Desperation starting for some speculators and flippers buried in high payments.
DO NOT BAIL THEM OUT!
Many need to learn a lesson for their reckless activities.
Remember these lowball bids are not really low ball bids based on last 5 years price appreciation.
When bidding ask comparables from 2000 or 2002 not just recent. Then compound out 5% AND MAKE BID if you feel you have to.
Homeowners are not entitled to last sales price. A price is based on the highest bid a buyer is woilling to pay and a seller willing to sell. Unfortunately sellers are in bigtime denial right now. This is changing as we now.
In the end it is your money and your risk, because you are stuck with the house and payments after dotting the contract.
I know this is norhern n.j. web site, but I currently live at the Jersey Shore in Brigantine,NJ. The builders are stil building and the houses are still selling. Is there any indication that there will be an adjustment also at the Shore area?
The biggest price adjustments should occur in the shore areas.
Building and selling? Means nothing.
I see house inventories piling up in Ocean County.Also foreclosoures increasing.
Ditto on the Jersey shore. These price drops will happen in all bubble areas of the US- which, let’s face is just about everywhere.
Why would one area be immune?
It’s a national trend!
Excellent site, Grim. Your Low Ball! feature is brilliant.
I alas may be compelled for family reasons to purchase a house in the next few months. I am in central Jersey rather than northern Jersey and wanted to know what databases you are culling your Low Ball! stats from. It would be helpful to have somewhat real-time data about what the average discrepancy is between asking price and selling price in my area (Princeton/Pennington/Hopewell/Cranbury). But I have no idea how to compute that.
In a September posting you mentioned (as I recall) http://www.taxrecords.com. Is that where you get your Low Ball! stats from? Is there any public, free source for tax record info? The state I recently moved from (and yes, thank god, I sold my old house at the height of the market) made all property tax records available online, free for anyone to access. Haven’t been able to find anything like that for Mercer county.
Final thought: Do you have any sense that sellers are deliberately HIGH balling their prices, knowing that we have shifted into a buyers market and assuming they will be lowballed? I saw a house for sale in this area in an online listing in the fall for $450,000. It disappeared from the database so I assumed it had sold. But it just reappeared last week, listed by a different broker, for $500,000. I doubt that any work has been done on it. Do you think the seller is highballing as a strategy or is he merely insane?
Thanks again for your site. Luv it. – Cass
sheesh.
it’s still condo-mania in Jersey City. there’s about a dozen projects going up, still. I guess that means a glut of cheap condos in about a year.
Cassandra,
Thanks. I listed a number of sources of tax data in that piece, go back through the archives to find the links.
I do not get the Lowball or Price Reduced data from tax records, the lag is too great, instead it comes mainly from one of the Northern NJ MLS systems. You need to be a licensed real estate agent and a member to have access to that data.
I’ve only personally seen a few high priced listings. In NNJ it’s much more common to underprice and generate a bidding war (although it is becoming very rare). It’s the eBay effect but with real estate (i.e. someone is more apt to pay a high price through incremental bidding than they would otherwise).
grim
Are there any good foreclosure sites? Most seem to be rip offs.
Great, great, stuff, Grim.
About a week or so ago, I predicted houses that are listed for 600k now will be around 400k by the fall/winter.
That’s when I plan on buying. I know the ‘catch a falling knife’ theory, but I’m i figure by spring of 2007, they’ll be on the upswing again.
Cassandra,
I do not service Mercer County but I can give you a quick rundown on the market activity there based on TrendMLS.
Jan 05 sales data:
592 listed, 346 pended, 346 sold
Jan 1 – Jan 15 sales date (halfway)
275 listed, 53 pended, 81 sold
Average Prices year to date:
Original List Price: $326,600
Sold Price: $312,700
Keep in mind the figures will change at the end of the month when most settlements take place. The thing to note is the pended figure, which is how many homes have gone under contract and are scheduled for settlement for the next 30 – 90 days (usually). I find it highly unlikely that Mercer County will even come close to ’05 buyer activity based on the performance so far. Which in turn will mean, inventory will be sitting.
Also, I am unsure of how Trend calculates the average original list price. I do not know if it takes into consideration any properties that were withdrawn or expired and relisted under a diff MLS number.
When you are ready to make your purchase, you should, or have your agent, research the specific area you are considering. The data is available for each municipality.
Good Luck and hope this helps.
Roxanne,
Welcome to the blog!
-jb
2007 should be when all the real fun begins. Unfortunately some buyers have the patience of an infant so prices will not just fall 30% all at once. Denial will be history and desperation abounds from sellers that must sell. wish them well.
Capitalism at its best on the up and downside.
i’ve been doing searches using the NJ Tax records site and doing comparisons of what people paid/when and what the offering prices are today. on average since the early 90’s it’s taken about 10 years for the price of property below $400k to double in price. then from early 2003 prices the same dollar gain has occured in only 2 years! so it took some long time homeowners 10 years to appreciate $ wise what it’s taking some in 2 years. this says one thing people. BUBBLE! don’t buy now. wait for a retractment to at least early 2004 levels before even thinking of buying. prices are so out of whack with the basic fundamentals of home ownership that they’ll stall or drop until incomes catch up. it sounds like we have a good 4-7 years of stagnantion ahead with prices bouncing within a 10% range most likely.
You say that prices are wacky but then you say houses are rangebound maybe 10% drop. If prices are wacky and they have gone parabolic up last 3-5 years then why not give back a nice chunk of those wacky gains.
Prices can and will go down. They did in the past contrary what the RE industry would lead on.
i believe prices will stagnate for a while, maybe dropping slightly. i don’t expect a 50% retractment like many bubble watchers do. if that happened there would be a ton of buyers who’ll come out of the woodwork as the prices drop closer to normal levels. we’re all speculating (no pun intended) but it’ll be interesting to see how this plays out.
If prices drop 20%, they willl DEF drop 30%, and here is my logic:
after a 20% drop, some people will buy but most will be waiting to make sure they buy at the bottom. With those people on the sidelines, the sellers will have to lower prices even more.
All this will be coupled with a recession
Side comment : See what your money will buy you outside NJ
http://tinyurl.com/crscs
In particular, see what $299K will buy you in Decataur Illionis (2nd link on that URL)
“The Chambers-England Mansion is a rich historic jewel, with a solarium, ballroom, and five ornate, working fireplaces. Built by W. B. Chambers, who served four terms as mayor of Decatur, the house features 7,634 square feet of living space, all original wood flooring, wainscoting, and leaded glass windows.”
The neighborhood may be poor, of course
Those homes are all absolutely beautiful.
I’m a card carrying member of the National Trust for Historic Preservation and would eventually like to find myself living in a home on the National Register.
There is no longer any sense of style in North Jersey architecture. It’s all just a race to build the ugliest stucco monstrosity you can.
Caveat Emptor!
Grim
Ton of buyers will come out of woodwork.
I don’t agree.
Back in last bubble where were all those buyers coming out of woodwork. They were hunkered down doing nothing, but listening to the pessimism that will hit the Housing market. The tide hjas already turned. I have never seen so many negative articles about real estate. As RE turns down buyer pyschology will change. It won’t be such a great investment anymore. Thus all those extra dollars won’t be moving into this asset class.
Buyers will go into hibernation.
I called a north jersey realtor today. I’m doing research (learned on here) of houses for sale. I’m trying to find out how much each was bought for.
So I call the realtor, just asking for an address. She is relentless in trying to get information out of me. She gives me the address and then says, ‘I have this great place for you, it’s $436k …’ and I say, ‘it’s selling for $436k?’
She says yes.
I say, “Well then if i had to bid on it, i’d bid 275k-300k. You don’t want to hear that, but that’s what the house will be worth in the fall/winter when we move.
Before she can respond, i tell her, ‘the reason I got the address is because i want to find out how much the current owner paid for this house.
“We’re looking at 600k houses now, because in 6-10 months, they’ll be selling for 400k.”
Her, slightly stunned: “What do you do?”
me: “I’m learning to study the real estate market so I can make an informed purchase.”
This is kind of fun!
I’m interested in anything to do with the Civil War and with Cassville, Georgia. Your blog is interesting.
Regards,
A Cassville Heritage Association member, Cassville, Georgia
Confederacy