Welcome to another edition of Lowball!
Lowball! takes a look at home sales from a 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 from the past month and pick out the sales that have the highest percentage difference between list price and selling price.
The purpose of 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.
Here are Passaic, Warren, and Sussex for the first half of the month, I’ll publish the rest of the counties as time permits.
Passaic
(click to enlarge)
Sussex
(click to enlarge)
Warren (Included a few extra)
(click to enlarge)
Caveat Emptor!
Grim
What percent of the total sales do these represent for the same time period?
Passaic – 18%
Sussex – 21%
Warren – 16%
grim-
thanks for your hard work!! Any chance we could see #s for union and/or middlesex counties?
thank-you!!
AFE (amy from edison)
rofl Im so glad you added this to craigslist.
OT: The dotcom and housing bubble…explanation, housing bubble was further inflated by a fed funds of 1%…however it was ignited by this…
——————————————————————————–
FOR IMMEDIATE RELEASE: CONTACT: CHRISTI HARLAN
Thursday, November 4, 1999 202-224-0894
SENATE APPROVES GRAMM-LEACH-BLILEY ACT
VOTE PAVES WAY FOR FINANCIAL SERVICES MODERNIZATION
The U.S. Senate voted 90-8 today to approve S. 900, the Gramm-Leach-Bliley Act, which will repeal the Depression-era barriers that separate banking, insurance and securities. Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, issued the following statement:
“I believe we have passed what will prove to be the most important banking bill in 60 years. It overturns the key provision of the Glass-Steagall act that divided the American financial system.
“Over time, the market and the regulators have used a variety of innovations to try to undo this separation. As a result, we have substantial competition occurring, but it is competition that is largely inefficient and costly, it is unstable, and it is not in the public interest for this situation to continue.
“The Gramm-Leach-Bliley Act strikes down these walls and opens up new competition. It will create wholly new financial services organizations in America. It will literally bring to every city and town in America the financial services supermarket.
“Americans today spend about $350 billion on financial services – on fees and charges and interest. Most people who have looked at the potential for providing financial services under a more rational system believe, as I believe, that there are tens of billions of dollars of savings for the American consumer that will be produced by the reforms of this bill.”
Union will be up later tonite, I don’t have the most recent set of Middlesex data.
jb
how do you find out the address of a property listed on the mls. realtor.com?
OT
…but can anyone tell me what normally happens to inventory this time of year? I would think that inventory normally rises in early spring in anticipation of the spring/summer selling season and then comes down over the spring and summer as sales eat away at inventory.
What normally happens in late summer early fall? Do people pull listings/let them expire and wait to try again next year? Does inventory go up as sales begin to slow?
FOOLSball
when you low ball, offer 50% less!
Countrywide Home Loans, quietly has begun sending out letters to thousands of borrowers who have been making only the minimum payments on the company’s popular “PayOption” adjustable-rate mortgages.
The letters explain that “this is an early message to alert you that, based on your current payment trends and potential future interest rate changes, the monthly payment you will be required to pay may increase significantly.”
A model letter provided to me by Countrywide includes this hypothetical example of what could be ahead for a California homeowner currently making only minimum payments monthly on a $402,000 loan.
The current full interest rate on the loan is 7.6 percent, but the borrower has been paying just $1,348.47, far less than what’s needed to fully amortize the mortgage over its 30-year term.
If the loan reset at today’s rates, the letter explains, the full payment required would be $2,887.50 – more than double what the homeowner has gotten used to paying. Future reset rates could be even steeper, making the potential payment crunch much worse.
John G. Walsh, a senior official at the federal Comptroller of the Currency, recently described his agency’s concerns about poorly informed borrowers who don’t realize that their artificially low monthly payments won’t continue indefinitely.
“We’ve had consumers tell us they didn’t know that after making 60 minimum payments on a [payment-option loan], they would owe more than they did when the loan was brand-new. They should certainly understand the basic bargain: The price of a low payment now is a much higher payment later.
Grim said…
Union will be up later tonite
Thanks grim..you are awesome…I think once this bubble thing comes down we faithful readers need to nominate you for a medal of honor for single-handedly bringing prices in nnj down!!!
There is a piece on MLS relisting on the front page of the Star Ledger this morning. I can’t seem to get a link online.
grim
Sorry friend, but I had nothing to do with the market slowing or prices falling.
grim
The Grimster is JUST reporting the FACTS!
Something most fail to do.
A lesson to you Grubbing sellers.
Cut The Price Or ‘Learn To Chill’
A housing report from Maine Today. “The number of single-family homes for sale in Maine has hit record levels, industry figures show. More than 26,000 homes currently are on the market, compared to roughly 18,000 at this time last year, and 14,000 in 2004. Inventory has grown by more than 1,000 in just the past month.”
“This plentiful supply of homes has outpaced demand in many areas, and that is pushing down prices. In response, sellers are trimming their asking prices, and some real estate agents are becoming more creative to get their properties noticed, particularly in southern Maine.”
“An agent in Saco drew traffic to an open house, and put the home under contract, by slashing the price from $249,000 to $199,000. It’s no secret that home sales have slowed in much of the country. ‘Some sellers haven’t come to the reality that it’s a buyer’s market,’ said Realtor Cathy Manchester in Gray. ‘They’re still trying to get higher appreciations.’”
“Following appraisals from three real estate agents, Bruce Thistle in Windham listed his home last August for $259,000. He finally got it under contract this month, for $216,000. ‘A year ago, if you told me I’d sell the house for that price, I would have laughed,’ he said.”
“Thistle only had one showing during the first six months his home was for sale, even though he dropped the price $9,000 during that period. ‘I thought we’d sell it in days,’ he said. When Thistle’s listing expired in March, he switched Realtors and went with Manchester. She started the process at $240,000 and cut the price three times before finding a buyer.”
“In today’s market, (realtor) Noah Smith said, sellers need to be realistic about the condition of their homes and the asking price. That’s especially true in York County, where inventory has continued to grow in recent weeks. ‘Anyone who says the market is leveling off is in denial,’ Smith said.”
The Philadelphia Inquirer. “The bull market for houses led to a 50 percent surge in sales of million-dollar homes in the eight-county Philadelphia area. ‘A lot of people were afraid to miss the boat,’ said Albert Perry, president of the Greater Philadelphia Association of Realtors, of the home-buying activity in the last year. ‘That fear of loss is a powerful motivator.’”
Starving realtors starting to cave in and acknowledging house price declines.
A few months of NO commissions does the trick. NO Transactions NO COMMISH.
Starte lowering prices grubbers. This is 2006 and the market is tanking…you missed the top.
Bleed’em DRY.
The following is from era.com’s web site. Is this the new trend?
Guaranteed sale, guaranteed price.
When you accept an offer from ERA Franchise Systems, Inc., the Sellers Security® Plan assures you that ERA Franchise Systems, Inc. will buy your current house if it doesn’t sell within 180 days from the application date. ERA Franchise Systems, Inc. guarantees the purchase price offer, so you’ll know in advance the minimum you can expect from the sale of your house. You’ll also have plenty of time to see if any other buyer is willing to pay more.
You get the profit, ERA Franchise Systems, Inc. covers any loss.
Almost always, you will receive more than the price guaranteed by the agreement. If ERA Franchise Systems, Inc. ends up purchasing your house and then resells it for more than we have in it (including holding and closing expenses), the net profits are returned to you. But if ERA Franchise Systems Inc. sells it for less, you don’t take the loss, ERA Franchise Systems, Inc. does.
ERA Mortgage Equity Advance Option can even help with your down payment.*
The ERA Mortgage Equity Advance Option allows qualified buyers to borrow against equity. You may use up to $500,000 of your available equity from the ERA® offer to purchase and close on your new home financed through ERA Mortgage. So if the down payment on your new home is contingent on the proceeds from your old one, the ERA Mortgage Equity Advance Option has you covered. For more details, e-mail us at Answers@ERAMortgage.com for more information.
Increased Buying Power.
The ERA® offer eliminates the uncertainty of contingency offers giving you the flexibility to move when you want. You are in a better negotiating position than other buyers who may still have to sell a home.
Sellers Security Plan qualification.
Your house must be a single-family primary residence. Houses must have an average appraised value of at least $50,000 and not more than $750,000. Mobile homes, co-ops, or multi-family homes are not eligible for the plan. Properties that have an abandoned storage tank on site are also not eligible.
Certain conditions apply. For complete details, see your participating ERA® Broker.
*Neither ERA Franchise Systems, Inc. nor its affiliated companies, including Cendant Corporation, provides any product or service in connection with the ERA Mortgage Equity Advance Option. All products and services provided by ERA Mortgage.
Hey DUMMIES Look;
More evidence that prices are at JOKE levels.
http://mysite.verizon.net/
vzeqrguz/housingbubble/
look Dummies.
Prices will be adjusting downward…either accept it or ride it to the bottom at about 33% lower.
http://mysite.verizon.net/
vzeqrguz/housingbubble/
new_york.html
There is a very good article in the August 21 issue of Barron’s entitled,The No-Money Down Disaster.
Sorry, I don’t have a link but if you can get it, I really think it’s worth reading.
DLD
Houses at least 33% lower Condos have began to CRASH in price.
It’s funny how many new houses continue to pop up on the market and you look at the price the Greedy Money grubbing It’s not 2005 sellers are asking.
All I have to say to these grubbers is GOOD LUCK. You are going to be shocked what you are going to get in the end “if you have to sell”.
Bababa
Bust
Bob
CLICK —> Rise and Fall of the REAL ESTATE MOGUL: Inside Solomon Dwek’s Empire
Will fraud scandal topple pillar of the community?
With one bounced check, real estate investor Solomon Dwek set in motion a financial collapse that would bring down his $300 million empire and put his freedom in jeopardy.
Posted by the Asbury Park Press on 08/20/06
In public, Solomon Dwek, a stocky man with an easy smile, was a pillar of the community: a respected leader of a religious school, a successful real estate investor, a philanthropist and a devoted father of five.
But it turns out Dwek’s real estate empire may have been built on a foundation of fraud, double-dealing and lies.
Dwek was charged by the FBI in May with defrauding PNC Bank of $21 million, and his arrest stunned the community.
How, in just a decade, could the 33-year-old Ocean Township resident and one-time real estate wunderkind amass an empire in seven states worth a third of a billion dollars?
How could his empire expand so fast and collapse even faster?
And how could major lenders, investors and even family members have been so blind to provide millions of dollars to a man they now say owesthem more than $338 million?
An Asbury Park Press investigation into Dwek’s deals found that:
Questionable signatures were affixed to mortgage documents worth at least $9 million.
Dwek now owns millions of dollars in real estate that his family’s nonprofit religious school transferred to family friends.
Dwek went on a $179.1 million borrowing spree for nine months before his arrest.
Dwek’s defense lawyer, Michael B. Himmel, said the dispute with PNC is a civil business matter, not a federal crime.
To Winston Knass, a Florida boat builder, Dwek is a “slippery noodle.” After more than seven years, Knass has yet to see the $1.1 million Dwek owes him for a 116-foot yacht.
“I feel very sorry for all the people that he hoodwinked,” Knass said. “The guy’s living a double life.”
Grim-
But I do have to say that given your ability to continue reporting the facts you have provided a service that would really have no venue say even 5 years ago when this bubble started…maybe that’s what the real estate industry and the Fed were banking on when they started telling us way back then that whatever the landing it will be soft!! I think having this venue helps a lot of people get info much more quickly than before the internet and thankfully we have someone like grim willing to put in the work to make this a useful source of invaluable info.
just my .02 cents
AFE
There is a very good article in the August 21 issue of Barron’s entitled,The No-Money Down Disaster.
Sorry, I don’t have a link but if you can get it, I really think it’s worth reading.
Monday, August 21, 2006
The No-Money-Down Disaster
By LON WITTER
A HOUSING CRISIS APPROACHES: According to the Commerce Department’s estimates, the national median price of new homes has dropped almost 3% since January. New-home inventories hit a record in April and are only slightly off those all-time highs. Existing-home inventories are 39% higher than they were just one year ago. Meanwhile, sales are down more than 10%.
Although the stocks of new-home builders are down substantially, the stock market and many analysts are ignoring other implications of the housing news. In the latest Barron’s Big Money Poll of institutional investors, not a single money manager ranked problems in the housing market among the factors likely to lead to a sharp selloff in stocks in the next 12 months (see “Headed for Dow 12,0001,” May 1, 2006). Most experts still predict a 2%-6% rise in housing prices for the year.
These experts and analysts are basing their predictions on a possible increase in wages, inflation and GDP growth. They are overlooking the fact that by any rational valuation there has been no support for the run-up in housing prices since 2001, when the wealth of the middle class was battered by a bear market. Since then, inflation has been low, and wages practically stagnant. Housing prices, on the other hand, are through the roof.
Extrapolating housing prices from their current level based on wages and inflation is like saying a $100 Internet stock with no cash flow and negative earnings will rise as long as it is able to narrow the loss. The analysis ignores the fact that the stock never should have been trading at $100 in the first place.
By any traditional valuation, housing prices at the end of 2005 were 30% to 50% too high. Others have pointed this out, but few have had the nerve to state the obvious: Even if wages and GDP grow, the national median price of housing will probably fall by close to 30% in the next three years. That’s simple reversion to the mean.
——————————————————- ————————-
A careful look at the reasons for the rise in housing will give a good indication of the impact this drop will have on the stock market. They include, in chronological order: The collapse of the Internet bubble, which chased hot money out of the stock market; rock-bottom interest rates; 50 years of economic history that suggested housing never goes down, and creative financing.
The first three factors might not be enough to cause a crash, except that together they led to the fourth factor. Irresponsible financing causes bubbles. It causes individuals to buy houses they can’t afford. It causes speculation to run wild by lowering the bar to entry. Finally, it leads individuals who bought houses years ago at reasonable prices into the speculative borrowing trap. The home-equity credit line has supported American consumer spending, but at a steep price: Families that tapped into their home equity with creative loans are now in the same trap as those who bought homes they couldn’t afford at the top of the market.
The cost and risk of adjustable-rate financing can be devastating. Consider a typical $250,000 three-year adjustable-rate mortgage with a 2% rate-hike cap. If the monthly payment now is $1,123, after the first adjustment, the monthly payment is $1,419. After the second adjustment, the monthly payment is $1,748, a $625-per-month increase. That’s $7,500 more per year just to maintain the same mortgage. If you think high gas prices are biting the consumer, consider the cost of mortgage adjustments
Few years back (2004?) money.cnn.com used to run stories about soon to be millionaires. All the “to be millionaires” had one thing in common – they held more than on real estate property. I would like to see CNN review the progress made by these would be millionaires.