Welcome to the kick-off of the spring real estate season!
For those that don’t know why, it’s because of the Super Bowl. Why? Who knows really, it’s just a trend that has been seen over the years. Of the data I’ve seen for North Jersey, February does mark the beginning on the listing season, however it is most definately the bottom of the selling season.
Anyone out driving yesterday surely noticed the open houses. I’ve never seen so many balloons floating around North Jersey. Every major intersection I drove through had at least one open house sign.
So here is my message to prospective buyers this spring season:
Wait.
Take your time. Visit one more open house. Wait a week before you decide to commit to that offer. It should be obvious to you now that you didn’t miss the boat. In fact, the boat is turning around and heading the opposite direction. I’m not saying to boycott the market, I’m not saying “Don’t buy”, I’m saying wait. Throw your down payment into a short term CD and just sit back. The market is no longer going up, and any short term bump we do see is just a “dead cat bounce” on the way down. Take a deep breath. Inhale.. Exhale.. Instead of visiting open houses take the dog down to the beach, go to the driving range, start your spring cleaning or take up a new hobby. Do anything you need to do to get your head out of real estate.
Caveat Emptor,
Grim
it will be interesting to see if sellers get motivated in the coming week or two. even as the inventory steadily builds, asking prices don’t seem to be coming down. I know that final sales prices dropped in the fourth quarter, but it seems that this is probably due to the lowball effect. asking prices just don’t reflect where the market is right now
prices have been going below asking prices in some cases substantially, but compared to 5 years ago prices are still insane.
Starting Inventory #’s as of this afternoon.
NJMLS SFH – Feb 6
Bergen – 4066
Essex – 464
Hudson – 450
Passaic – 862
Total – 5825
Up from approximately 5300 at the beginning of January.
MLS Guide SFH – Feb 6
Hudson – 1990
Up from approximately 1700 in the beginning of January.
-grim
On the same note. We’ve surpassed inventory levels seen last summer.
grim
Here we go.. the first round of news articles about RE agents who now left the industry..
Cooling real estate market pulls welcome mat for new agents
Does anyone remember when they started including condos in the single family stats? I think it was last year, but I can’t remember which quarter…
From my past bidding experience, there is always one yahoo who will meet the seller’s insane price…if they follow grim’s advice, and hold off, this market will die…and wow, that will be fun.
Would like to see your thoughts on the statements made in this article, where the author essentialy talks about a shortage of available landspace to build new homes, thus inferring that there is no housing bubble.
Would like to see your thoughts on the statements made in this article, where the author essentialy talks about a shortage of available landspace to build new homes, thus inferring that there is no housing bubble.
that article is over 2 years old…nice try…you must be a broker
I didn’t bother reading that article but here’s something to refute its presumable premise:
I just sold a house in the Bay Area where there was “no more land”. Our house was 3 acres. It was zoned for 7 houses. It only had one on it.
We had a number of developers come by to look at it and 2 made us offers. We took the non-developer offer because we had more confidence that it would go through to close, but nonetheless, the number of houses in our town could have increased a bit.
Our next door neighboor in Morristown is elderly. She has 5 acres. I’m scared to death that she might sell it for development.
Infill is the word here. There is plenty of room.
is there 150% less land now than there was 5 yrs ago?
there has been a relative land shortage for a long time, but it never caused 20% yearly price increases until recently.
Can’t say that I can throw my opinion behind a 2003 Jim Cramer piece. Apparently neither can Jim Cramer…
Remember him on 60 Minutes last Fall?
“I think real estate is very similar right now to what the dotcoms were like in 2000. Everybody thinks you can’t miss with real estate. Actually I shouldn’t say that. In the last five months, I think it’s starting to dawn on people that real estate can go wrong.”
Regardless, if property prices can fall big-time in Hong Kong (can you think of a place that has that kind of land shortage?) then I don’t think it unreasonable for it to happen here.
“They’re not making anymore land” is a registered trademark of the National Association of Realtors®.
The “land scarcity” argument is utter hogwash. This is the same argument that was used to justify insanely overpriced Japanese real estate in the late 80s. Remember? Second largest economy, growing rapidly, beating the Americans at their own game, all crammed into a tiny island chain – how can Japanese real estate *possibly* drop!!! Well, it did, for 15 straight years, because it got killed by bad debt.
Bad debt kills good assets. It’s a law of economics. No matter what the supposed scarcity of land may be in certain areas, if you throw a bunch of zero-down subprime interest-only neg-am crap at it, the crap will kill it.
Like Grim Ghost and others have said, and I posted myself on SocalMtgGuy’s blog, the argument that “they’re not making any more land” is really non-sensical. The issue isn’t whether more land is being built (though does the term “land fill” mean anything to anyone? I think Washington, DC was built on old swamp land); the issue is whether there is space to build more real estate. Knock down an existing dilapidated wharehouse, clear away the debris and viola! Land! Now build a 25 story, luxury condo apartment building and you’ve got brand new real estate—on old land, no less! :-) I’ve come to the conclusion that some real estate brokers will say anything to make a sale. What I find incredible is that so many buyers seem ready and willing to swallow the spin.
Wow I didn’t even have to argue the land issue, everyone else did it for me.
Thanks everyone.
grim
Yes, the land excuse is poor. Just like they said in the dot-com days “theres only a limited number of good .com names”.
All it takes is creativity and some thought to get around that. They are selling farms, commercial sites, and homes to developers who have plans to demolish them and rebuild.
There will always be some buildings that are neglected and eventually rot away leaving just the land intact. Land can be rebuilt on. Homes can be rebuilt.
-Richie
Hi Grim..I’ve reading your blog for last few months..great site. keep up the good work. I saw few houses in Morris county in Sept-Dec. in 500k range…they were old and in shity condition so I decided to wait( although it was hard to convince my wife :)
). I just read this article on the Money Magzine, thought it would be interesting to the readers here..
http://money.cnn.com/2006/02/08/real_estate/money_zillow/index.htm
For some reason I can’t paste the complete link..just goto the Money.com homepage..it’s the first headline story.