Judging from the site traffic this afternoon, it seems many of you have started your weekend early. It’s only appropriate that I start this discussion early as well. Have a great weekend!
Observations about your local areas, comments on news stories or the New Jersey housing bubble, Open House reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them.
For readers that have never commented, there is a small link on the bottom of each new message that reads “# Comments”. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.
As always, anything goes!
Thanks to this site, I do not feel down about the housing market anymore. I thought I was the only one out there with any common sense not to buy overpriced homes.
Just an observation about the NJMLS and open homes for this Sunday. I have never seen so many pages of homes posted for a Sunday open house. I have been patiently watching the overpriced market for 4 years now and feel confident that I will move from my condo to a house this year or the beginning of next year.
Another observation. I recently recieved one of those realtor brochures in the mail that list data on homes sold and prices- this is the first one in many years that shows a 1% decrease in the average sold price in Mahwah. I believe that this is significant since every other brochure has shown an increase each quarter of at least 10%.
Interesting read… IMO
NOT YOUR FATHER’S HOUSING MARKET
by Peter Schiff
Euro Pacific Capital
April 21, 2006
This week, as mortgage rates rose to their highest level in more than four years, real estate insiders reassured the public that higher interest rates would not hurt the housing market. Their claims were based on the fact that even though rates had risen, they never-the-less remain low in historic terms. While this may be true, it is completely irrelevant to today’s historically unprecedented real estate market.
Although current mortgage rates are still historically low, underlying mortgage balances certainly are not. Several years of artificially low interest rates, combined with lax lending standards and the get-rich-quick mindset, have resulted in homeowners assuming mortgage balances unprecedented in history, both in absolute terms and relative to their incomes. For most, such balances have been sustainable only as direct result of extremely low interest rates, and in many cases temporary teaser rates. Today’s stratospheric real estate prices cannot be maintained without these supports. As rock-bottom rates fade away, housing prices must return to earth.
For example, while historically a typical family may have been able to afford a 6.5% mortgage on a normal $250,000 mortgage, the same is certainly not true when applied to today’s completely abnormal $500,000 balances. The fact that rates may still be low in historic terms is irrelevant if mortgage balances are now twice their historic norms.
Compounding the problem is the record number of families who now own vacation homes, or “investment” properties that produce negative cash flows. This means that higher interest rates will be particularly burdensome as many households now have multiple mortgages to service.
Even more troubling is the significant number of borrowers who relied on adjustable rate mortgages, or worse, temporarily low teaser rates to qualify for their loans. When those mortgages reset at today’s higher levels (or tomorrow’s even higher ones) and in some cases are applied to even larger loan balances as a result of negative amortization, the payment shocks will be that much more intense.
Furthermore, the fact that mortgage rates are still historically low merely indicates just how much higher they could potentially rise. In addition, given the low supply of domestic savings, accelerating inflation, and a wave of mortgage defaults likely to further suppress mortgage credit, mortgage rates are likely to rise to historically high levels. Applying high mortgage rates to today’s extremely high mortgage balances is like putting a match to gasoline. If sky-high prices were merely the inverse of extremely low interest rates, a sharp rise in the former implies an equally severe collapse in the latter.
In addition, this week’s action in the bond, precious metals, energy, and foreign exchange markets, which included simultaneous declines in both bonds and the dollar and break-outs in gold, silver, and crude oil, (all of which I am on the record as having accurately predicted) indicate that a major inflection point could be developing; one which would either send the dollar though the floor, interest rates through the ceiling, or a combination of both. Either scenario is bearish for real estate and bullish for gold, and could turn the American dream into a nightmare a lot sooner than even most housing bears believe possible.
© 2006 Peter Schiff
I’m still looking to buy a house in NNJ, probably in Ridgewood, but it’s no longer interesting because it’s just too expensive.
I think there was a time, not too long ago, when buying a million dollar house meant you were living well. Now it means you live in a small house with outdated fixtures on a small lot… and if you’re in Manhattan, it means you live in a small one-bedroom condo… sigh…
Well, it may not be quite that bad, but it’s pretty darn close.
I think it’d be interesting to see a graph that charted household income (median/average) vs. mortgage loan amount (median/average) vs. avg. interest rate for each of the last 10 years.
And Grim, if you could, it’d be great if you had a link(s) on the front page that would take you directly to all the graphs that you’ve created/posted. They’re so useful that they deserve to be readily accessible.
Have a good weekend folks!
-P
gotta love peter schiff
Can anyone provide me with feedback/opinions on Hillsborough? Do you think its an up and coming town, or do you think it will never be a great town?
Also, what do you think the priorities for your first home should be? 1. best town, 2. best house, 3. go half on both of those? I am dying…I don’t want to make the wrong decision.
Thanks CJ
had to share this email from my new agent “If you guys would go to $399,000 you should make an
offer on Alpine or Indian Terrace – they’ve both been ont
he market a long time and are both vacant so you could be
in soon!” my range is 350,000 maybe 375,000. the alpine house is on since 9/11/05
Grim,
Love this blog and how you’ve help me convince my wife, her mother, and step-father that I’m not nuts about the RE market heading south.
I know you’ve talked about adding a discussion board which seems to be justified at this point with the level of traffic and comments. Have you checked out ezboard?
If you think about migrating to a non-blog format, I’d be willing to chip in a few $$ for hosting, and I have to believe several others would too.
Again, thanks for the great work you’ve done.
JM
Here are a few things that might effect the housing market in the short term
Oil prices rapidly approching $80 per barrel(may go even higher)
What will the fed do if pump prices reach $4 per gallon? Will they raise interest rate a half point to slow down the economy?
What type of efffect will this have on housiing?
I feel that if energy prices stay elevated for long period(3 months or more) than home prices will likely fall 15%-20%.
How do RE agents feel about energy prices staying at elevated levels? Do you guys still think that home prices will appreciate 10% this year? No way!!!!
Grim-
Great job! This blog is awesome.
Oil prices rapidly approching $80 per barrel(may go even higher)
What will the fed do if pump prices reach $4 per gallon? Will they raise interest rate a half point to slow down the economy?
I feel bad for all the people who moved out to the ‘burbs and have 60+ mile commutes everyday.
-Richie
Does anyone here subscribe to the Morris Record? You know, the paper Boringson is printed in. I am curious if the letters to the editor have been published yet.
Does anyone have a feel for the negotiability of rents these days, or for the vacancy rates?
I’m stubbornly boycotting buying my first place, but I have to get out of my current rental within the next 3 months.
I’ve been thoroughly priced out of the market to buy, so my rent budget is not astronomical either. $1200 max.
Any advice? Thanks in advance.
CJ –
How would you define an “up and coming” town?
Hillsborough is OK, it used to be pretty rural but is being developed like crazy. Good for services but annoying for traffic. The development of 206 is touted to help the traffic situation but will probably just lead to more development. It has low snob appeal, so a lot depends on what is important to you – the reputation of a neighbourhood or its actual quality of life. The people I know who live there find it pleasant and it has the advantage of being cheaper than some neighbouring towns – lowering the stress of paying an astronomical mortgage might make you feel a lot better about not living in a percieved “prestige” town.
last week somebody mentioned the title of a book that every first time buyer should read. does anyone remember the name of that book?
are there any realtors that work in the sparta area that believe in the bubble? and would like to help me find a house? “lowball” of course. i keep finding agents who want me to stretch and dont want to insult sellers by bidding too low.
Politely said “I think it’d be interesting to see a graph that charted household income (median/average) vs. mortgage loan amount”
here is it:
http://www.youdovoodoo.com/80sbubble.htm
are there any realtors that work in the sparta area that believe in the bubble? and would like to help me find a house? “lowball” of course. i keep finding agents who want me to stretch and dont want to insult sellers by bidding too low.
You should never be worried about insulting someone. You make an offer that YOU feel is sufficient. A house is only worth what someone will PAY for it, not what the sellers WANT for it. Big difference.
An offer is not an insult at all. I’m sure most sellers are going to start begging for them soon.
-Richie
“Can anyone provide me with feedback/opinions on Hillsborough?”
It’s an OK town. Schools are not great. I wouldn’t classify it it as ‘up and coming’ but simply ‘sitting there.’
Take a look at Princeton, which currently has 275 homes on the market, and top schools in the state.
Also look at Bridgewater, which has better highway access, and better schools than Hillsborough.
You didn’t mention if you work in NY City or not, as none of these 3 towns has a great commute into NY City.
Regardless, I wouldn’t buy an ANY town right now. Wait 12-18 months to save yourself $100,000 or more.
Boycott Open Houses!
* Empty ®ealtor sign-in sheets.
* No idle chit-chat to generate new ®ealtor clients.
* Zero foot traffic.
* ®ealtors bored out of their minds from 1-4PM Sunday.
* Greedy sellers depressed and hopeless Sunday night.
“The fact that [mortgage] rates may still be low in historic terms is irrelevant if mortgage balances are now twice their historic norms.”
What an excellent point.
“what do you think the priorities for your first home should be? 1. best town, 2. best house, 3. go half on both of those?”
I’ll put it this way: you can always fix a house, but you can’t fix a town.
“i keep finding agents who want me to stretch and dont want to insult sellers by bidding too low.”
That’s exactly why you should ditch the agent, if you’re informed about a town, you don’t need one.
Get a good real estate attorney to work with, who will review your contract, and you’re all set.
Now you can make lowballs whenever you feel like it. In fact, you may even knock on the seller’s door to bypass the seller’s agent, who might be tempted to filter out a “low” offer from the seller’s eyes.
OK, that seems to have filled my post quota for the day. :-)
Have a good weekend all!
unrealtor said:
“Get a good real estate attorney to work with, who will review your contract, and you’re all set”.
does this mean the listing agent gets full commission? how does this work?
Man tries to sell infant daughter for home improvement funds
I am a would be 1st time buyer (won’t be buying for at least 12-18months now).
I would certainly aspend some time with brokers (as I have) to just look at places. A good broker wil point out things and teach you some stuff.
I actually have a decent one I like. He doesn’t pressure me and said it has to be right for you.
He certainly points out things when looking that I would never have known to lok at or think of.
On the flip side, I spopke to anohter broker who told me I can’t look at anything out of my price range, blah, blah,blah. I laughed at him and won’t deal with him.
I think the 1st time buyer (like myself) needs to at least go out with a few brokers to learn things and maybe even use a broker to buy the 1st house.
If you have already bought a few (like my parents), then you just need a good lawyer.
Anyway, now ain’t the time to buy anyway :-)
“does this mean the listing agent gets full commission? how does this work?”
Yes.
The lawyer would receive a flat fee from you of about $1,500.
Number of “open house” ads in NY Daily News today:
85
Number of open house ads in Saturday daily news 3 months ago:
8
Sorry for the lack of updates this fine Saturday. Was out at Branchbrook Park in Newark putting on a bike race.
You know, there are some wonderful old houses surrounding Branchbrook. Some of the streets surrounding the park feel very much like Upper Montclair, etc. It was most certainly an upper class area at one time. Really makes you wonder about the dynamics of community, class, and change..
grim
Can someone recommend a decent places for a NYC commuter. My budget is 400k prefer a townhouse and priorities are location, schools and low crime. And ofcourse I am gonna lowball.
Low historical rates mean nothing when the whole bubble was based on falling ones.
BubbleTrack.blogspot.com
Grim, the 1967 riots ravaged the Newark area:
http://www.thirteen.org/newark/history3.html
The Newark riots started when a cab driver resisted arrest, much like the 1991 Los Angeles riots with Rodney King resisting arrest.
“Can someone recommend a decent places for a NYC commuter. My budget is 400k prefer a townhouse and priorities are location, schools and low crime.”
There are some condos at the New Providence/Chatham border which are today priced around there. They are easy to locate if you take a drive around that area, it’s blocks from the “New Providence” train station.
But why would you buy one now, at market peak?
I work for a NJ builder & I can tell you firsthand that the pre-build & new home market is gasping right now. Many new single-family & townhomes are just sitting there, adult actives are doing a tad better dependent upon location. But not much better. Even worse, building costs are skyrocketing right now. Those poor saps waiting for the McMansion to get finished are in panic mode because they’re beginning to realize that they’re the suckers who got caught holding the bag when the flipping-mania died.
The point being, you’re nuts if you buy new right now. By late summer, if not sooner, you will see prices begin to fall, guaranteed.
Hey guys and gals,
Apologies for going off-topic completely. Is there a blog as good as this one for New York city ? I googled my guts out but did not find anything nearly as good. Curbed is interesting but not good enough. Or am I saying ‘not good enough’ because no one is talking about any price slides in NYC ? :-) I read that prices in Manhattan have gone up 20-30% this year over last year inspite of rate hikes. Is this true ? Will there be a bubble-burst in the city ?
Thanks
PS – Yes, I am thinking if we should buy something in NYC, since one son goes to college there, son-2 also wants to go there for college, and my husband also works there. So when son-2 finishes HS in 2008 may be we could all shift to NYC. Rents are so high in NYC right now, elder one is struggling to find a place. Am thinking that maybe next year if prices come down we could buy there – a 2bed/2bath outfit.
one more for the road… hope everyone is having a great weekend (in spite of the weather).
The Federal Reserve and Housing:
A Cluster of Errors?
by Eric Englund
April 22, 2006
Without bank credit expansion, supply and demand tend to be equilibrated through the free price system, and no cumulative booms or busts can then develop.
~ Murray Rothbard
In my two decades as a surety bond underwriter, I have seen financial fads come and go. One aspect of my job entails analyzing personal financial statements, and I most certainly have seen scores of them. Along the way, I have been able to discern distinct patterns in the financial behavior of people. What is so striking to me is the herd-like behavior of human beings – many of whom seem to be easily swayed by the marketing blitzes of Wall Street brokerage houses, banks, and other financial services companies. As Ludwig von Mises stated in his magnum opus Human Action:
Common man does not speculate about the great problems. With regard to them he relies upon other people’s authority, he behaves as “every decent fellow must behave,” he is like a sheep in the herd. It is precisely this intellectual inertia that characterizes a man as a common man. Yet the common man does choose. He chooses to adopt traditional patterns or patterns adopted by other people because he is convinced that this procedure is best fitted to achieve his own welfare. And he is ready to change his ideology and consequently his mode of action whenever he becomes convinced that this would better serve his own interests.
Unfortunately, the common American does not understand he is being manipulated and impoverished by the Federal Reserve. When money is no longer real (i.e. fiat currency vs. gold and silver), then people may come to believe in the surreal, and a hyperreality emerges. In particular, during the reign of Alan Greenspan, money and credit – created out of thin air – rained upon Americans as if to assure us that crop failures and misfortune had been banished from U.S. soil. Hence, we came to live in a world of plenty where one may become wealthy by simply purchasing a house – with lots of borrowed money – and by “investing” in stocks for the long run. What a dream it is to become wealthy without effort. This mass delusion is only one step away from collectively believing that cotton candy is a cash crop. Alas, Americans will soon discover that housing values don’t grow to the sky and that heavy mortgage debt leads to a harvest of financial despair. The Austrian theory of the trade cycle will be validated yet again.
So here’s a quick trip down memory lane. Early in my underwriting career, cash and savings were king. Accordingly, this frame of mind was reflected in personal financial statements. As the 80s rolled on, Americans bought into the pop culture that is Wall Street. Without fail, I saw people cash in CDs and purchase mutual funds. Peter Lynch, indeed, popularized such “investment” vehicles for long-term wealth creation. Then John Bogle flaunted the low-expense-ratio S&P 500 Index Fund as the wisest way to build a substantial retirement nest egg. And who can forget the dot.com and telecom crazes of the late 90s? Americans envisioned themselves retiring to Easy Street based upon owning shares of Amazon.com and Global Crossing. Lastly, let’s not forget the Wall Street darling known as Enron. This company’s common stock was going to make each of its shareholders wealthy. So why aren’t Americans taking early retirement, en masse, to lives of luxury? Where is all the wealth promised by Wall Street?
To date, I can’t say that I have seen a single individual become wealthy by investing in the “products” promoted by Wall Street. From the results I have witnessed, Wall Street preys upon the economic illiteracy of Americans and does a most efficient job of transferring wealth from the masses to the bank accounts of the Wall Street – mostly Ivy League – elites. Over the years, a familiar pattern has emerged: Wall Street brokerage houses make their recommendations, the sheeple get fleeced, and I bear witness to a clustering of human financial error as reflected in the personal financial statements that I survey daily. For the most part, such financial errors have not been devastating, but were merely temporary misadventures on the part of misguided individuals.
As a quick aside, yes, I have seen some individuals become wealthy. Yet such wealth emerged by way of starting up and maintaining successful businesses. Such entrepreneurs, typically, maintain strong personal liquidity and keep debt loads at reasonable levels.
Nothing, however, could have prepared me for the horrors I have witnessed the past few years. Because of the housing bubble, as engineered by the Federal Reserve, Americans are now drowning in mortgage debt while naïvely believing that living in a house is the path to wealth creation via long-term capital appreciation. Thus I am just going to come out and say it: countless American homeowners are already insolvent and simply don’t know it; and many of them continue to make ends meet by borrowing against credit cards and ever-shrinking home equity.
It is commonplace for me to see married couples with mortgage-debt-to-income ratios that are wildly askew. The hyperreality conjured by the Federal Reserve’s relentless inflation of the money supply is characterized by a populace which believes that a permanent plateau of prosperity has been attained. This is the boom phase of the trade cycle. A mindset, correspondingly, arises in which people have absolutely no fear of debt. After all, the Federal Reserve has the economy under control. Debt, in fact, is embraced as a means to lever up one’s return on investment.
When the bust phase of the trade cycle materializes – and followers of Austrian economics know it will, eventually – then the real horror show will unfold. Let’s face it: highly leveraged Americans have little to no chance of ever paying back their enormous mortgage debts. All it will take is for a husband or a wife to lose a job, or for interest rates to go higher, in order for mortgage debt to become unmanageable. In the bust phase, mortgage defaults will become a deluge.
Earlier, I mentioned that the Federal Reserve “engineered” America’s housing bubble. To be sure, there are those who deny a housing bubble exists. Hence, such deniers argue there is no correlation between aggressive growth in M3 and the spectacular rise in housing prices across the United States – as if the Federal Reserve’s pounding down of interest rates occurred in a vacuum. To this I respond with a quote from page 1 of a September 2005 study sponsored by the Board of Governors of the Federal Reserve System titled House Prices and Monetary Policy: A Cross-Country Study. Here is the smoking-gun quote: “Like other asset prices, house prices are influenced by interest rates, and in some countries, the housing market is a key channel of monetary policy transmission.”
With the bursting of the NASDAQ bubble signaling that the U.S. was heading into a recession – not to mention the shock of 9/11 – the Federal Reserve took desperate measures by goosing the money supply and driving the Fed Funds rate down to 1%. These monetary central planners knew that housing demand was very much interest rate sensitive, and they were counting upon the opiate of easy credit, at remarkably low interest rates, to stimulate the “animal spirits” of Americans in order to set the housing market ablaze. The Federal Reserve’s central plan worked. Uncle Sam’s economy was rekindled as trillions of dollars were loaned into existence via the housing market – the Fed’s monetary transmission mechanism. Therefore, America’s housing bubble did not emerge spontaneously in a bona fide manner. Rather, it is a debt-laden financial monster created by the mad doctors populating the Federal Reserve.
As surely as night follows day, a credit-induced boom is followed by a bust. Moreover, only the Austrian theory of the trade cycle provides the intellectual framework allowing one to understand the boom-bust cycle. Before delving a bit further into this theory, there are a couple of things to keep in mind. First of all, as premeditated by the Federal Reserve, the housing boom was credit-induced. Secondly, America’s savings rate is near zero, so savings-induced growth cannot explain the housing boom. What we will find, as elucidated by Roger Garrison, is that central banking is at the epicenter of the boom-bust cycle. Dr. Garrison provides the following explanation in the Mises Institute’s remarkable book The Austrian Theory of the Trade Cycle:
The Austrian theory of the business cycle emerges straightforwardly from a simple comparison of savings-induced growth, which is sustainable, with a credit-induced boom, which is not. An increase in saving by individuals and a credit expansion orchestrated by the central bank set into motion market processes whose initial allocational effects on the economy’s capital structure are similar. But the ultimate consequences of the two processes stand in stark contrast: Saving gets us genuine growth; credit expansion gets us boom and bust.
Assuredly, the housing boom is destined to bust just as the NASDAQ bubble did – anecdotal evidence is already pointing toward this end. When the NASDAQ bubble did burst, I saw the liquidity of many Americans diminish significantly. Yet the housing bubble is vastly different and the financial pattern is unmistakable. Trillions of dollars of mortgage debt came into existence in a very compressed timeframe – in less than five years. Consequently, over the last three years, I have never seen so many dangerously-leveraged personal financial statements in my entire underwriting career
This mortgage-debt bubble, as engendered by the Federal Reserve, is leading millions of Americans to financial ruin. This may become the most calamitous clustering of financial error in U.S. history. If anything positive comes out of this economic mess, perhaps it will be the demise of the Federal Reserve itself. Regrettably, the Fed’s failure will have come at an enormous price, including the possibility of volatile social unrest.
A terrifying thought it is.
© 2006 Eric Englund
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Eric Englund has an MBA from Boise State University and
OK, I have a bit of an “ethical” dilemna I wanted an opinion on. We have been working with a broker on buying a house, but have recently decided that we’d rather just rent for now. About a month ago, another broker showed us some rentals. However, when we switched to “buying” mode I told him we were not interested in renting anymore. But, as we have made the decision to rent, we think we want to rent one of the places he showed us. However, I would prefer to go through the broker who has been showing us the “for sale” properties, as he has spent a lot of time with us, showing us the area and the different properties. Now, is this ethical? I didn’t like the other broker that much, and I feel badly that this one who has spent time with us is not going to make anything that I would rather the rent comission go to him. Thoughts?
” had to share this email from my new agent “If you guys would go to $399,000 you should make an
offer on Alpine or Indian Terrace – they’ve both been ont
he market a long time and are both vacant so you could be
in soon!” my range is 350,000 maybe 375,000. the alpine house is on since 9/11/05 ”
To anon 7:54 AM
Tell your agent you will put in an offer for 342,000. If he/she will not, find another agent.
KL
(Realtor)
Jess said:
OK, I have a bit of an “ethical” dilemna I wanted an opinion on. We have been working with a broker on buying a house, but have recently decided that we’d rather just rent for now. About a month ago, another broker showed us some rentals. However, when we switched to “buying” mode I told him we were not interested in renting anymore. But, as we have made the decision to rent, we think we want to rent one of the places he showed us. However, I would prefer to go through the broker who has been showing us the “for sale” properties, as he has spent a lot of time with us, showing us the area and the different properties. Now, is this ethical? I didn’t like the other broker that much, and I feel badly that this one who has spent time with us is not going to make anything that I would rather the rent comission go to him. Thoughts?
Jess,
It is not unethical for you to ask the new broker to rent you an apt, but if it is an apt that the old broker showed you if he finds out -he will sue your broker for the commision, as he was “procuring cause” this has nothing to do with you, they can duke it out, but I would ask your broker you do like what he thinks, If you were my client I would tell you I would take you to see it, and then I myself would contact the other agent, and work it out with them. They may not want to be bothered with a rental or they may play hardball with me in which case for a rental I would probaly just get you in and deal with the other broker, I usually waive my half of the rental fee, as I feel the renter is not making any money off the deal and have to pay deposits, and the months rent etc.
Good luck
KL
Sugee, there is no blog focused on nyc alas – ben’s housing bubble blog, bubbletrack and this blog have a lot of stuff about nyc, so I enjoy picking my way thru these
I also wish someone would start an NYC blog -curbed/walkthrough are a bit too hogtied to RE industrial complex to cover the bubble to the level it deserves.
One sad thing is nYC housing data is very well hidden by the industry- NYSAR does not release stats for nyc (except queens) and REBNY is often late, and highly spun (and suspect) data.
Which of course makes me think they must be hiding some pretty nasty stuff…
Someone posted here recently (last month or so) posted about a nightmare experience with a seller where there was an issue with an underground oil tank leaking… Was that property possibly in Mendham? Thanks for the info!
There is a great NYC related blog, in fact, one of the best real estate blogs around.
http://matrix.millersamuel.com
There is a shortcut on the main page just in case you don’t want to cut and paste..
grim
gravitymatters,
Some of what Eric Englund says makes sense, but he’s way out to the right and in the “full economic meltdown” camp…
If people took as much time researching housing and financial service costs vs. returns, as say they do on TV’s, cars, groceries, this statement wouldn’t be true. How about taking a few minutes a week to keep a budget and track your spending…it’s a mystery to me why this is not more common…
American consumers are sitting on a a mountain of debt and some will soon have a rude awakening. I’m just not buying some of the other stuff he proselytizes about on his web site or in his book/articles.
JM
Grim, matrix site is a great blog, but seems to me to be more general than NYC-focused. Like, where’s our Lowball! ?
Anon,
Something like Lowball! might not even be possible in NYC, they don’t utilize a shared MLS system. In order to do something like this you would need to keep track of listing prices of each property at each brokerage, and then combine them with the sales price once it’s public record. Mr. Miller can probably answer this much better than I.
grim
is there any similar blog for central and south jersey?
appreciate your help
‘Rents are so high in NYC right now, elder one is struggling to find a place. Am thinking that maybe next year if prices come down we could buy there – a 2bed/2bath outfit.
even a depressed price will be $900k.
Thanks Grim – yes I know the MLS thing drives me nuts- I will forward to matrix as well/
Just a for instance of why we need NYC blog, witness the NY times shillin’ for this condo project in brooklyn:
http://www.nytimes.com/2006/04/23/realestate/23post.html
If the Times bothered to actually report, they would note:
–You can buy a whole building in this area now for a mil -why would you want just a condo?
–A dept of buildings online search shows no C of O – that may not mean they don’t have one-but any buyer should demand to see it before even considering buying-brooklyn builders have tried this sell without CofO scam before, and buyers can really get screwed.
–The alleged “3 million” renovations – Dept of building permits show substantially less money – again DOB estimates are usually low, but buyers should ask for a breakdown of how they could spend that much on a 7 unit bldg-I really doubt any smart developer would spend $600 a sq foot in this shaky market.
–DOB showed bld had huge structural crack – any buyers better make sure with engineer if that was fixed.
I’m so tired of seeing all these cheerleader stories when it’s so easy to get records and ask the right questions. Caveat Emptor squared for us NYC buyers who don’t have their own Grim!
is it my imagination or
in todays paper,,it seems that
the prices of some of these houses
are coming down??
is it my imagination or
in todays paper,,it seems that
the prices of some of these houses
are coming down??
It’s a nice cold, rainy day for open houses.
Actually good for the experienced house hunter. On rainy days you’ll get a good idea to see if a house has any water problems (leaky roof, drafty windows, standing water, drainage issues).
-Richie
Hey, I read that Borreson article on the old man who eats peanut butter sandwiches–it ended with, There but the grace of god go I–A good ending–
Borreson was saying, I’m living it up only because I’m lucky–
Why was this deleted? Is Grim really the creep that Borreson says he is?
It’s Sunday and Raining
Oh I’m so blue
I’ll be running an open house
With nothing to do
I’ll get Dressed up nice….but I’m gonna get wet
and I know in my head no one
wants this much debt!
But, oh how can I, just tell
the Seller
It’s not the old market,the one that was stellar.
But on the bright side
for my husband and boys
Mom won’t be home
to stifle there Joys!
No cleaning, no nagging,
no eating healty food
So when I come home,they’ll be in a good mood!
Boooyaaa)))))
KL
Anon,
What exactly do you think was deleted?
jb
I took a look at the HOBOKEN REPORTER to see how many listings there were this week. There are 14 Pages of Real Estate for sale listings including 4 pages of Open Houses and then 4 pages of Condo’s offered for rent.
Grim,
Please extend this blog to cover Edison area as well.
Thanks,
KBR
Housing in my are in Florida are coming down. In some towns I am seen quite a few reduced by 100k. That means nothing because they are still highly overpriced.
I gave up credit years ago. Living on cash is not easy but it sure makes us sleep well at night.
The article supports our decision to stay out of the high debt ponzi scheme.
I have a neighbor who works for Cendant (they own a number of RE agencies, Bergdorf C21, Coldwell Banker, and Wiechert(I think). I talk with him every couple of months because he has two girls that are the same age as mine and activities bring us together. Anyway, he travels around the country as part of his business to the regional offices.
Well, to make a long story short, last summer he told me that there were no bubbles. And that was based on the numbers from Cendant. I haven’t asked him since then but next time I see him I will ask how the RE Biz is going. I think it might be interesting to hear what the last 9 months has done to the company’s bullish tone.
I posted re.: Mendham two weekends back. You need to watch out for radon and have a radon test done if you live in that area. I had one done when I moved to Morris County. I also had an oil tank test done for my house a while back. I used Shelterworks (Dover) for Radon and P&D Environmental Services (River Vale) to search for an oil tank. (They’re certified by the EPA under NJSA 58:10A-24.1-8)
It costs a few hundred bucks for the oil tank test ($250.00), but it was worth it. If you have any concerns regarding costs, it’s a good idea to get a few bids. By the way, I’m not shilling for the testers, I’m just telling you whom I used. Whomever you choose, make sure they are certified. Good Luck!
To:
“Does anyone have a feel for the negotiability of rents these days, or for the vacancy rates? ”
If you can offer the landlord a lump sum for a year rental, and pay all or most of it up front. you could probably get a better deal. Instead of paying 1200/month, you could offer $10k for the year (pay as much up front) to secure the lease.
Sugee,
My mother lives in Manhattan and the market is cooling there as well. In March she received a flyer from the Co-op board relaxing the rules for open houses (previously limited to one showing per apartment per month) because foot traffic had dropped significantly.
I did a quick search on blogger.com.
These might be of interest to you:
http://www.greaternewyorkrealestate.com/
http://www.mlsmanhattan.com/mls_manhattan/
http://www.urbandigs.com/
http://nycapartmentblog.com
http://walkthrough.nytimes.com
http://therealestate.observer.com/
http://propertygrunt.blogspot.com/
http://www.realestatedirt.com/
http://myopenwallet.blogspot.com/
Good luck!
Some inventory numbers posted on The Housing Bubble Blog:
April 3, 2006
San Diego: 18,252
Phoenix: 40,012
Vegas: 18,348
April 23, 2006
San Diego: 19,236 (5.4% increase)
Phoenix: 43,900 (9.7% increase)
Vegas: 19,548 (6.5% increase)
That’s in only a 20-day span!
Booyaaaah!
Hi,
I am a first time buyer. I have been looking for a house in Parsippany/Morris plains area for last three years. Every year I thought that price is at the pick and can not go higher than this so I can save more money for the down payment and buy a decent home next year but price increased by about 10% every year. Now, it is difficult for me to buy a decent house since I was not able to increased my savings by 10% or I did not get 10% salary raise each year.
Only differance compare to previous years, it takes longer time to sale but still seller’s get close to the asking price.
Do we go back to 2002-2003 housing price? I think may be not..
To the Anon (and anyone else) who’s got an RE agent that encourages them to look at properties over the amount they have stated:
Drop that agent like a hot potato. They are bad news in a normal market. They are poison in THIS market.
We plot numbers for manhatten:
BubbleTrack.blogspot.com
You can find some of our NYC related posts
Here
And
Here
From MSN Money:
April 24, 2006
The housing bubble has popped
By Bill Fleckenstein
A recent story in the Wall Street Journal, “Hot Homes Get Cold” offered lots of its useful vignettes that serve as a microcosm of manic markets — starting with the bravado-cum-denial displayed by a medical-equipment salesman in Stuart, Fla.
Concerned about his real-estate investment apparently going sour, he can’t afford to reduce the price to what homes now sell for in his neighborhood — which is about $100,000 less than he’s asking. Says the salesman: “If I got in a jam, I would have to drop the price, but I am not at that point.” His game plan: Rent the house, so as not to “lose my shirt.”
That’s the mentality often seen in manic markets — the belief that you can’t possibly lose, and, when the price goes against you, you don’t have to deal with it, because it will come back. This fellow (and millions more like him) is going to find out that his belief is a mistaken one, in the same way that folks did when the stock bubble burst.
Short link:
http://tinyurl.com/kwbns
Long link:
http://moneycentral.msn.com/content/P149596.asp?Rating=10&PageID=149596
There seems to be a problem with blogger/blogspot, the last time I was able to publish a new post was Sunday morning. Number of posts in queue, but I can’t “publish” them.
grim
Ba ba ba ba ba BOYCOTT Houses!!!
There way overpriced anyway…sellers in denial still and realtors starting to push sellers for lower prices for once.
Booooyaaaaaaaa
Bob
Hopefully this gets fixed by the afternoon. A large number of blogger blogs are down.
grim
Anon 7:23 Someone posted here recently (last month or so) posted about a nightmare experience with a seller where there was an issue with an underground oil tank leaking… Was that property possibly in Mendham? Thanks for the info!
If you mean the one that held up Attorney Review for 2 weeks due to the sellers refusing to acknowledge the existance of the tank they identified on their own disclosure statement, that was I – and it was in Holland Twp, not Mendham. And what killed the deal was their refusal to fix (or even negotiate) the failed septic system.
PbW
Don’t know if anyone uses the Garden State Multiple listing service but that’s typcially what I use and what my realtors send their listing through.
It’s been down for several days, at least the public access part. Links from my realtors still work fine. Through Google I was able to find the second page which is the county map, but still doesn’t go further than that.
If anyone has any news on when it will be up, I’d definately like to know.
The link is:
http://www.gsmls.com/
Interesting reading on MNS
http://moneycentral.msn.com/content/P149596.asp
Ok, I know it’s not related to NJ but I like to hear these things – was visiting family on Long Island this weekend. A family friend who’s a realtor (and a long time one, not a newbie) stated in no uncertain terms that prices were going to go “down, down, down” in my area and that she thought only certain areas in Westchester would hold any value. Now, I disagree about prices staying put up there, but it was interesting to hear that from a realtor in a town of million dollar homes. She actually advised me NOT to buy in my own hometown.
njgal,
why did your realtor friend think westchester is somewhat immune from a downturn?
I would think the areas of Westchester with the top school systems (Scarsdale, Rye, etc.) will hold up pretty well. Not that they’re immune, but that they wouldn’t slide as far down because people will always do what they can to put their kids in the best schools. As far as towns with less nationally touted or even marginal school systems, I can’t say the same.
I would think the areas of Westchester with the top school systems (Scarsdale, Rye, etc.) will hold up pretty well. Not that they’re immune, but that they wouldn’t slide as far down because people will always do what they can to put their kids in the best schools. As far as towns with less nationally touted or even marginal school systems, I can’t say the same.
Condo’s in Scarsdale dropped 50% and more during the last down turn, no area is immune.
Most of the Scarsdale condos are not within the Scarsdale school districts, though. They’re “Scarsdale P.O.” but Eastchester and other school systems. I’m not saying Scarsdale won’t go down– it will. But places like Mount Vernon, Yonkers, White Plains, etc. will go down faster and harder.
She didn’t give reasons, but it’s funny, because my town on LI has a school district that’s actually better than the Westchester towns she recommended AND has a much shorter commute than most Westchester towns (and frankly, in itself is a more attractive, well kept town than many southern westchester towns). I think it boils down to the typical “Westchester is better” idea that seems to permeate NY – even someone born and bred on LI has that prejudice ingrained. She also thought the north shore of LI and Garden City would be ok, which makes me thinkg that snobbery is her guiding force there.
If it’s school districts that count, you would NEVER see price drops or high inventory in my town, but there it is. Westchester will follow. Maybe not as fast, as I can attest to price drops and inventory (based on observation) coming much more slowly in the Westchester towns I’m looking at. But I cannot imgaine, if the tri-state area drops, that Westchester will be immune.
Housing Bust!
Ba ba ba ba ba ba ba BOYCOTT houses
Boooooyaaaaaaaa
Bob
What towns are you looking at?
I am looking at Tarrytown, Sleepy Hallow, Irvington and Ossining. As far as I can see, the prices have not come down yet but definitely there is a lot of inventory. The condos in the Trump towers in White plains have not come down in price. The Ichabold landing in Tarrytown by Ginsburg developer has not come down either. Any further information.
The condos in the Trump tower in White Plains will most definitely come down. There are so many of them out there, I think the building must be practically empty. The Residence at Jefferson Place condos in White Plains don’t seem to be selling well either. Ossining will be the first of your group of towns to come down. I have been looking at White Plains and Hartsdale mostly, and while inventory is building, there are no significant price drops yet.
I’ve been looking in Pelham mainly, where things are just sitting, although only a few things are coming down and there is still some crack being smoked (3 bed, 1.5 bath house asking 769 sold within a week – yeah, a little crazy you think?). Also checking out Northern, like Mt. Kisco/ Bedford.
The Condo’sthat went down last time 50%,were difinitely in Scarsdale, not P.O., but yes those that were not in Scarsdale proper went down even more. No area is immune.
Interesting. I’m not saying this to be annoying, but really curious. There aren’t too many condos in Scarsdale proper. Only a few buildings to my knowledge. The bulk of the Scarsdale condos are on Garth Road, which is Eastchester. Unless there are others I don’t know about.
I agree, I think the condo and townhomes are in Eastchester.They are by the lake. Very expensive. Last time I look it is still in the upper 700’s for a townhome and not very big.
NJGal said…
Also checking out Northern, like Mt. Kisco/ Bedford.
NJ
I have family that lives in Somers, so I know the area. Very commutable to NYC. The Metro North Harlem line is a quantum leap more reliable than the LIRR, and lightning fast compared to the NJ Transit choo-choo train.
There are other great towns up there.
Be aware of the recent dramatic weakness in southern Putnam county. You figure it is only a matter of tiem before that begins to bleed further south.
This post has been removed by the author.
I was thinking of buying a house in Scotch plains, NJ
it will be my first house
I saw a nice little house for 350K
what should I do?
Help
I am trying to Buy condo in Hackensack as I commute to NYC. What would be the best price for 2BR , 2 Bath condo. It would be better if its on Prospect Ave, Overlook Ave or Beech Street.
Any comments and advise please.
This is my first home and I would like to spend upto $350K. Is this the right time to buy.
All the help appreciated.
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