From the Daily Record:
Poll: Homeowners can’t afford new home in own town
Donna Mackey bought her four-bedroom house in Butler 20 years ago for about $120,000. She estimates it’s worth about $325,000 now, but that sum couldn’t get her the home she would want if she were looking to buy in Morris County today.
“I could find maybe a two-bedroom (home) with absolutely no yard and tiny rooms,” said Mackey, 47. “I don’t even think I could stay in the same town. I could never get four bedrooms. I don’t really think I could be in Morris County anymore.”
Mackey’s predicament is not unusual in the Morris area or the state, according to a recent Monmouth University/Gannett New Jersey newspapers poll, which found that 78 percent of New Jersey homeowners would not be able to buy a house in their own town if they were first-time homebuyers.
Maria Creutz, 24, of Jackson, said she and her husband cannot afford to purchase a home in New Jersey and she holds out little hope of a political solution.
“Lawmakers do not consider affordable housing a priority,”she said. “They have roofs over their heads, so they don’t think about the rest of us.”
That is the consensus up this way. Most owners say that there is no way they could afford their houses with today’s prices.
I wonder who these people think they’ll sell their houses to one day if ordinary people like themselves can’t afford them.
or do they think we’ll live in a feudalistic society where only people who bought pre-1998 will be real property owners, their wealth geometrically growing year after year while non-landowners fall further and further toward serfdom?
how smart they were to have been born at the right time.
Skep-tic: I don’t think most folks knew or had idea of market doubling in 5 years when they bought their house. So, I suppose you can say that they were lucky.
The trouble with RE is that prices do not fall. Even in 87, it took about 3 years for prices to come down by 30% to 40%, but the rise before that was about 100% in 5 years. Things may be slightly different, but I don’t think it will be drastic. Even if prices were to go down 30%, in real terms the mortgage payment will not go down, as rates are rising.
I am seeing lot of houses near my area come on market, but if they don’t sell, folks are taking it off market. Now a days, folks are first trying to sell their place before making commitment on other place.
I firmly believe in NJ it is more supply side restrictions that will not make housing affordable for a while. IMO it will be at least 5 more years before income / expense ratio becomes better to make housing affordable.
Actually shailesh if prices fall 30 to 40% over the next 3 to 4 years if you adjust for inflation they would be at or below 2000 prices.
Example: A house bought for 200k in 1999 is worth 450k today. A 40% drop over 3 years takes it down to 270k. A 35% increase over 10 years will be at or less then the inflation rate, so even though the house will cost more, its price will have stayed even or will not have kept up with inflation. It is worth the same or less in 2009 dollars then it was in 1999 dollars.
Well, they have been priced out of the market, that’s simply what it is. If they want to move to a new home, they have to look in south jersey or move out of state.
I don’t see what is wrong with that, as this type of migration has been taking place for years. It’s the reason people had moved from NYC to NJ, and now it’s the reason they will move from NJ to elsewhere.
NJ will die on the vine if housing prices don’t retreat. you can’t have 78% of the people not able to afford a house. it’s got major ramifications too numerous to articulate in this message.
housing will drop in real and nominal terms over the next several years. sit back and watch as the squeeze takes place with baby boomers retiring and looking to sell, wages continue to stagnate, taxes and everything else continues to go up more than CPI statistics, adjustables reset and to top it off you can count on a few out of nowhere exogenous events to shake the world economy. just watch.
Ba ba ba ba ba ba ba ba BOYCOTT HOUSES!!!!
“Well, they have been priced out of the market, that’s simply what it is. If they want to move to a new home, they have to look in south jersey or move out of state.”
who are “they?” if everyone is priced out of the market, then there is no market.
It’s amazing how everyone says, “Gosh, I don’t know how anyone could afford to buy my house– I sure couldn’t” but then in their heads they’re counting all of the ways they’re going to spend the money when some white knight comes along and makes them rich.
Guess what? He’s not coming, there is no Santa Claus, and the only people who actually want to live in your house are regular people just like you, not the CEO of Morgan Stanley.
My mother bought her house in Bergen County in the 1960’s for under $30,000
Compound out about $30k house price at 5% and it is worth about $320K today. unfortunately we know that this is not the case today with the mnorons using creative gimmicky loans to buy and later be foreclosed on.
Ricahrd: I have been saying the same thing, the prices in north Jersey have to come down, all the the rhetoric about lack of land, and inflation and all the rest is just that rhetoric.
There can be no market with out the first time buyer, if the first time buyer os closed out there is no market. Also out of contorl property taxes, is a major negative for the aresa, NJ used to be attractive for property taxes, it is no longer the case. Plus we have a huge senior element in north Jersey, who will at soem point no longer need the homes they have lived in for years.
As far as declines, I do not think it will take years, I think you will start to see significat reductions by end of summer. As quickly as it rose, it can fall, all it takes is one seller to start the down draft, just as it took one buyer to start the upswing. The last decline did not have the speculators, and suicide loans of today. Will it take a few years to bottom out, probably, but I do not think people will have to wait 3 years etc. to buy soemthing at reasonable levels. The market is changing rapidly, even quicker then I expected.
I worked with a guy who bought a brand new Bi-level in Butler in 1965 for $19,000. I don’t know if any of the bloggers on this web site are old enough to remember how popular Bi-levels were back then!!