Since it’s pretty quiet on the housing front today, I’ll open up the weekend thread earlier than usual.
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!
Caveat Emptor!
Grim
Be sure to give the new message board a try!
New Jersey Real Estate Forums
grim
I am new to Open House scene.
However I have noticed that there are a lot less open houses after Memorial Day weedend.
Any comments???
I noticed a lot more in the towns I drive through. Where are you located?
The Star Ledger
Sacrifice? ‘No way,’ vow state workers
Plan by 3 legislators earns union derision
Friday, June 09, 2006
BY JOE DONOHUE
Star-Ledger Staff
Three lawmakers who are pushing for steep givebacks from state workers drew boos and catcalls from union members when they tried to hold a Statehouse news conference to build support for their plan.
http://tinyurl.com/qtgg7
They actually started their own website.
http://www.StopSpendingMyMoney.com
Inventory climbing:
Currently, there are 30,564 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State, 99% are available to be searched on this site.
http://www.gsmls.com/
GRIND!
No bids No NOTT”ing
Babababba
Boycott Houses!
Ripoff prices.
Bob
This is in todays Star Ledger business section.
“A strong economy will spark a housing market rebound after ex cess inventory from speculators is shaken out, perhaps very soon, the chief executive of the nation’s largest luxury home builder said yesterday.
At a meeting with analysts in New York, Robert Toll of Toll Bros. said pent-up demand will drive the housing market after the current housing slowdown passes. Demand will be driven by buyers who are biding their time waiting for better incentives or lower prices.”
What is he smoking?
Chatham flipper in trouble:
Jan 29, 2006 – $910,000
April – $899,900
June – $849,000
http://www.realtor.com/Prop/1059225175
This was a tear down/rebuild and all houses for blocks are tiny $450K (bubble price) cape cods.
It would take a considerable fool to spend $800-900K to live on a street filled with houses that cost half as much.
On the market six months and counting…
Found this forum site recently and think it may help if you want information on specific towns.
In each County forum, there are links to town forums. Good place for asking specific questions regarding town issues.
http://www.nj.com/forums/
Karen
Here’s an e-mail newsletter that a Montclair realtor sent out. Now that the market is collapsing it seems realtors want to talk about the virtues of compromise. Where was that “kinder and gentler” attitude when they were gleefully pitting buyers against one another in rediculous bidding wars for overpriced properties?
Here it is:
“The Lost Art of Compromise”
It all started several weeks ago.
I bumped into an acquaintance who had just sold her home — for nearly $100,000 over the asking price. She wasn’t happy — with the buyers, who were asking to repairs she thought were frivolous (after all, her home was perfect!); with her agent, whom she said wasn’t attentive enough; and with the selling price, (which she thought was too low). She was even thinking of canning the whole deal and putting the house back on the market. When I suggested she had done extremely well with her property, which is well-located and well-appointed, if just a tad in need of updating (it looked as if most of the work had been done 10 years ago), she seemed surprised!
This woman was netting hundreds of thousands of dollars from her home sale.
Let’s think about that for a moment. If she had put her faith in various Wall Street financial options, given the ebb and flow of the markets over the past half-dozen years, she wouldn’t have done nearly as well.
But she felt short-changed. Sellers’ desire persists to have their homes continue — in what economists say is a cooling market — to explode at the finish line with crazy competitive bidding. If a house does not sell in the first weekend, sellers are embarrassed, angry, perplexed, annoyed: Their right to more has been compromised. Economists right now are not saying that houses will drop significantly in value, only that prices will stabilize. Expectation adjustments must necessarily follow.
When I am invited to sellers’ homes to present their market analysis, which is the first step to obtaining the listing, I precede my comments by suggesting that, with double-digit appreciation for the past few years, their investment has been, by any standards, a hugely-profitable one — even if it doesn‘t go up more than the predicted 5 or 6 percent this year, or stays the same. I counsel that their expectations must be revised. (Homeowers who helped their houses along by investing in new kitchens, baths, systems, landscaping and the like, are likely to get the most “bang” of all, and achieve more, given sterling locations and without major negative factors.) I also provide, upon request, a punch list of improvements to make the house more attractive to buyers, and worth more.
And yet, grim sellers still ask me: You mean I won’t be getting even more than my neighbor did six months ago? I might not have multiple offers? You mean should paint my kitchen? Take off that highly toxic asbestos in the basement? Buy new appliances? When I propose that at the right asking price they might still attract multiple offers, many sellers say, no thanks, I’d rather price higher, just to make sure I won’t get low offers.
Over the last several years, the “pricing lower to get higher” strategy has been successful; however, sellers are now worried that they actually will get less by pricing lower. The impulse is to price higher, sometimes crazy higher, to send a message to buyers their house won’t be “given away.” And this impulse, in turn, has led to slower-moving inventory.
Think of the price-lower-to-get-higher strategy as similar to an auction, where bidding often begins at a low figure and then escalates as bidders compete for the prize. It’s all done rather quickly and efficiently. The price-higher-to-get-higher strategy might eventually result in a sale, but there will be extended days-on-market and, eventually, a negotiated selling price, often under the asking price. Furthermore, many sellers are thinking maybe they should just rent and wait for a brighter day — and that’s another newsletter topic!
Meanwhile, buyers sensing the stabilizing market are acting much more deliberately. If they can’t get out to see a house the first week on the market, so be it. They’ll try to fit it in when they can. If they miss it, so what, there will be other houses to see…whenever. Lack of immediacy, possibly caused by several factors aside from higher asking prices — i.e., rising interest rates; relentless media coverage of the housing market; spring weather and its preoccupations; confusing messages from Wall St. and the Fed — have all impacted on this spring’s sales.
So, let’s face it: Lower offers are coming in. This past week, a national TV news program had the temerity to advise that buyers offer no more than 10 percent UNDER asking. Although I haven’t experienced that yet, I have seen several cases of 5 percent under bids — which were summarily rejected by sellers.
With conflicting expectations, compromise is what it’s all about, on both sides, in order to make the deal work.”
GMB, that “newsletter” can be summarized as follows:
“I need deals to get my commission.”
A strong economy will spark a housing market rebound after excess inventory from speculators is shaken out
Sorry Mr. Toll, bubbles simply don’t work this way. I challenge you to show me one bubble in history that has collapsed and then reinflated before running its course and returning to a level near or below historic long-term valuation. You sound just like every other Pollyanna throughout history who has prematurely “called the bottom” of a bubble and predicted a rosy picture right around the corner.
richie,
I am in summit. I normally look at
http://www.burgdorff.com and http://www.loisschneiderrealtor.com.
annon @ 12:58
Is it wrong to hate that Montclair realtor? I literally hate her. I hope she gets no business. Admitting to purposely creating bidding wars? Stating “A national TV news program had the temerity to advise that buyers offer no more than 10 percent UNDER asking.” Oh, really? The TEMERITY? Sorry, but she can bite me. I hope they start advising 20% under.
I hate realtors. I really really do.
Something to lighten up our mood…
This sex researcher phones one of the participants in a recent survey of his to check on a discrepancy. He asks the bloke, “In response to the question on frequency of intercourse you answered ‘twice weekly’. Your wife, on the other hand, answered ‘several times a night’.”
“That’s right,” replies the bloke, “And that’s how it’s going to stay until our second mortgage is paid off.”
fb literally…
Although I haven’t experienced that yet, I have seen several cases of 5 percent under bids — which were summarily rejected by sellers.
Then just what is your idea of “compromise”? 5% below asking seems to me like a very legitimate and reasonable offer in this market; one you should be lucky to get and hardly a lowball or a bottom feeder to be “summarily rejected”.
By the way, if I were to put in a bid on a house, which I won’t, it wouldn’t be as generous as 5% below asking unless it were a real gem. With so many houses on the market, I would throw out a bunch of lowballs and see what sticks.
Although I haven’t experienced that yet, I have seen several cases of 5 percent under bids — which were summarily rejected by sellers.
By the way, I think you (the realtor) are lying. There are widespread reports of sellers getting lots of lowball offers, but “nothing they take seriously”. You can honestly say that you have never seen an offer 10% below asking and only have seen several offers 5% below asking, that you, of course, are in a position to summarily reject? You are either lying or listings are so ridiculous they don’t even attract lowballers.
I think many realtors have never really witnessed a bear real estate market first hand (I haven’t either, but at least I know they exist). Consequently, a lot of young realtors think 5% off is a major concession.
I agree that most sellers at this point should jump for joy if they get 5% below list. Were I bidding now (though I absolutely am not), I would lowball several houses at least 25%, and make the competition known to each seller every step of the way.
The time for compromising was last August. We are in a straight up buyers’ market now whether sellers like it or not.
i had a recent situation on a house. wanted to put in an offer 7% under list. note comps and today’s market conditions didn’t support the original asking price to begin with. the selling agent said that was an offensive bid and she wouldn’t discuss it with the sellers. now i don’t know about you, but when did the selling agent have the unilateral right to decide what to present to a seller or not? well safe to say 2 days later the property got reduced by 2.5% below what the selling agent said the sellers would accept for the property.
the point here is if you are serious about a property and want to bid on it, do it officially so that the agent has to present it to the sellers. i believe that’s the law. if you are just lowballing to see if someone bites then an agent can play whatever games they want.
Richard, I could be wrong but I believe the agent is required by law to present all offers. Does anyone know? If that’s true, you should most assuredly report him or her – I’m totally serious. Other industries are policed – realtors should be as well.
don’t know about you, but when did the selling agent have the unilateral right to decide what to present to a seller or not?
The agent is required by law to present all offers to the seller, right?
BTW, did you go back after the price was lowered?
Other industries are policed – realtors should be as well.
Shailesh, if you’re out there, this is one area where I would like to see government intervention. While I don’t agree with the govt. tampering with free markets, it would be in the public’s interest to promote transparent & efficient RE markets. The RE industry needs SEC type oversight. For example, if my company makes a prediction about the future, it must publish a “safe harbors” disclaimer. Meanwhile, David Liarealtor® can offer his opinion as fact with no recourse. Many people are going to be hurt as a result of NAR’s cheerleading.
yes i’m in discussions with the sellers again but now i’ll be offering and will settle on less of a price than before. that’s what happens in a falling market. if as a buyer you jump in you feel like in the near future you may erase a few years of equity build-up (since you pay almost nothing off during that time).
RentinginNJ:
I understand your concern, but not sure whether regulation is really right answer. If you think of it, Realtor are just middleman, after all Buyers are the ones making decision to pay higher prices. In fact, today Technology use is making people already wonder, why they even need Realtor? I think, as market goes downward, sellers are going to drive hard bargain on Realtor commissions. The model of Buyers Agent is under question, when Buyers are actually finding homes on their own on Internet.
I think the best thing to happen would be an Internet company like Google or Yahoo, jumping in and making an Open MLS for people and making significant marketing campaign to educate people. In my opinion, if MLS like service is opened to general public, it will make Realtors irrelevant, as Stock brokers did due to Technology.
But if someone knows of any more regulations that can help do let all know.
Admitting to purposely creating bidding wars?
If you’re a seller, you should be thrilled about bidding wars and a realtor who can deliver them. There is nothing wrong about exploiting fools willing to get into a bidding war.
I have been in competitive bidding situations, but I never ever bid above asking in any case.
Is their a pastor / church (like Joel Osteen) in Northern NJ area? Thanks.
Can i find realtors who are dedicated to buyers? These realtors should never work with a seller.
I feel there is a conflict of interest when realtors work for both sellers and buyers.
Yes you can find buyer’s agents, but you generally have to sign a binding agreement with them.
I agree with you – I personally do not believe in dual agent and I personally do not practice it. If I am called on a property I list, I give it to another agent in my office. I get a refferal fee, and they deal soley with the client. Although I get flak about it, I’m good with it.
KL
@rymingrealtor
Thank you for responding.
What does the binding agreement cover?
I have an older ranch house which is in good condition and on a wooded acre and half lot, low taxes etc. Over the 13 plus years I have lived in this area the surrounding area has now new McMansions starting at 900k and up. I put my house
on the market as a great buy for a young couple for under 5ook. My biggest problem is said realtors. They don’t want to sell my house…its not enough bang for the buck in commissions for them. This property has a greenhouse and a root cellar , stone walls etc. Very pretty. But people here can’t see natural beauty anymore. My realtor said I need professional landscaping etc. What happaned to Stickley and the NJ woods. Thank God I didn’t spend a fortune renovating all I did was update. When I moved to NJ in late 1993 you could buy a great home for 150K on a huge lot.
“When I moved to NJ in late 1993 you could buy a great home for 150K on a huge lot”.
I knew NJ RE 1993…. I lived in NJ RE in 1993…. Anon 1:36 AM your no NJ RE 1993
Not @ 150K for decent NJ RE, even in 1993. Let’s be real.
Bill
Here goes the panic and confusion in Jersey City
check this board
What does the binding agreement cover?
I/ we do not use them, however some local agencies have jumped on this, basiclly you sign with an agent for 6 months and work exclusivly with them, if you were to go with another realtor and buy- baring any misconduct or justification, you would still owe a pre-determined fee.
I work with clients that want to work with me not clients that are forced. I do not have a big problem keeping clients.
Some people do not feel there is a benefit to working with an agent to buy a home – some do. Some people really want an agent because they have no idea how the process works, some people really want an agent because they know exactly how the process works.
As per grim
Caveat Emptor!
KL
Anon 1:36,
Is your home still on the market? If so, please post a link.
Thanks!
Some friends bought a house recently in Riverside, CT. Having no idea what the market is like there, I checked out homes in in the area in the price range that we bought in ($800K-$1.2M).
HOLY MACKEREL!
You can buy something decent in Short Hills for what they’re asking for an amazingly tiny POS in CT!!!
I was galled!
One other comment (lots of coffee this am)…
This may be glaringly obvious to some but I just kind of realized it recently.
We closed on our house in late Feb and are really thrilled about it, but it’s just in my nature to keep looking. I set my price parameters in all the towns we were intereted in (all the usual midtown direct yuppie suspects – so shoot me). I put in parameters that go from just under to 40% over what we paid just to see what’s out there.
The theory there is that IF the market dropped 40%, how much more could I have gotten for my money?
But what I realized is this: even if we paid 40% less than current asking for a property, we still would have to pay the taxes as they were most recently assessed. In most cases, that represents a 50% increase over the already high taxes we pay now. In dollars, our monthly nut would increase about $700 for addl property taxes alone.
So basically, our comfortable purchase price DECREASES if the market goes down because the total monthly payments go up. If the market declines we couldn’t spend what we spent in February – we could only comfortably afford to pay about $70K LESS.
Just an observation….
Anonymous at 1:36
I’m interested in your house too, and love Stickley by the way. Where is it? Can you provide more details…
K
So what should I do?
Bought this place in 1975 for just under $200K. Mortgage long since paid off. Took out a home equity line to make some improvements over the years (kitchen, baths), but that’s all paid off now, too.
Last year at this time, a house very similar to mine sold for close to ten times what I paid for mine. Yes, you’re reading that right–10 times more. The town I live in has great schools and very restrictive zoning, and no more land to build on.
I’m starting to think about retiring and moving south, but there’s no rush. Do I sell now, as you folks are urging? Or do I just plan to hold on and hope things recover?