Welcome to another edition of Price Reduced!
For all the newcomers to the site, Price Reduced! takes a look at a handful of significant price reductions across Northern NJ. The purpose of this exercise is to serve as evidence that the Northern New Jersey real estate market has long since been overvalued and has started the long hard decline back to the mean. These listings are in no way an endorsement, nor do I believe they are a bargain or a value. It is very possible that even with reductions, many of these homes may still be overvalued.
These listings are from GSMLS and consist of Single Family Homes, Condos, and Coops. We’re going to change to format a bit this week. Price reductions of greater than $150,000 are displayed here, all other price changes can be found in the Excel file below. With that, the listings please!
| MLS | Town | Orig. List Price | List Price | % off OLP | $ off OLP |
| 2256891 | Mendham Twp. (2320) | $6,900,000 | $4,700,000 | 31.9% | $2,200,000 |
| 2246981 | Mendham Boro* (2319) | $6,900,000 | $5,900,000 | 14.5% | $1,000,000 |
| 2257103 | Franklin Twp.* (3005) | $2,500,000 | $1,700,000 | 32.0% | $800,000 |
| 2292369 | Watchung Boro* (2721) | $2,300,000 | $1,695,000 | 26.3% | $605,000 |
| 2298084 | Montvale Boro (1136) | $1,899,000 | $1,295,000 | 31.8% | $604,000 |
| 2256538 | Lake Mohawk Sparta | $2,500,900 | $2,000,000 | 20.0% | $500,900 |
| 2283606 | Bernardsville Boro (2703) | $7,995,000 | $7,500,000 | 6.2% | $495,000 |
| 2296532 | Westfield Twp.* (2920) | $2,750,000 | $2,300,000 | 16.4% | $450,000 |
| 2297945 | Mountain Lakes Boro | $1,599,900 | $1,179,000 | 26.3% | $420,900 |
| 2294006 | East Hanover Twp. (2310) | $1,400,000 | $998,000 | 28.7% | $402,000 |
| 2289615 | Demarest Boro (1109) | $1,396,500 | $999,900 | 28.4% | $396,600 |
| 2246211 | Kinnelon Boro (2315) | $1,649,999 | $1,274,900 | 22.7% | $375,099 |
| 2209092 | Hopatcong Boro (2812) | $650,000 | $324,000 | 50.2% | $326,000 |
| 2246180 | Mountain Lakes Boro | $1,800,000 | $1,495,000 | 16.9% | $305,000 |
| 2208633 | Saddle River Boro (1158) | $2,800,000 | $2,499,000 | 10.8% | $301,000 |
| 2292075 | Essex Fells Twp. (1606) | $1,199,000 | $899,000 | 25.0% | $300,000 |
| 2300263 | East Hanover Twp. (2310) | $1,299,000 | $999,900 | 23.0% | $299,100 |
| 2295882 | Madison Boro (2318) | $2,175,000 | $1,899,000 | 12.7% | $276,000 |
| 2277234 | Sparta Twp. (2820) | $1,247,500 | $975,000 | 21.8% | $272,500 |
| 2335186 | Delaware Twp.* (1907) | $1,200,000 | $949,900 | 20.8% | $250,100 |
| 2329510 | Cedar Grove Twp.* (1604) | $1,999,999 | $1,750,000 | 12.5% | $249,999 |
| 2272503 | Alexandria Twp.* (1901) | $899,000 | $650,000 | 27.7% | $249,000 |
| 2110738 | Bethlehem Twp. (1902) | $930,000 | $699,000 | 24.8% | $231,000 |
| 2267783 | Essex Fells Twp. (1606) | $3,200,000 | $2,975,000 | 7.0% | $225,000 |
| 2262509 | Denville Twp. (2308) | $1,049,000 | $829,000 | 21.0% | $220,000 |
| 2289451 | Millburn Twp.* (1612) | $1,495,000 | $1,275,000 | 14.7% | $220,000 |
| 2283153 | Montclair Twp. (1613) | $1,399,000 | $1,185,000 | 15.3% | $214,000 |
| 2283621 | Millburn Twp. (1612) | $1,499,000 | $1,287,923 | 14.1% | $211,077 |
| 2272975 | Ringwood Boro (2511) | $890,000 | $680,000 | 23.6% | $210,000 |
| 2266412 | Mendham Boro* (2319) | $4,200,000 | $3,995,000 | 4.9% | $205,000 |
| 2307965 | Saddle River Boro (1158) | $1,999,999 | $1,799,000 | 10.0% | $200,999 |
| 2307799 | Readington Twp.* (1922) | $1,199,999 | $999,500 | 16.7% | $200,499 |
| 2310306 | Hillsborough Twp.* (2710) | $1,200,000 | $999,999 | 16.7% | $200,001 |
| 2204547 | Denville Twp. (2308) | $1,247,500 | $1,047,500 | 16.0% | $200,000 |
| 2309894 | Nutley Twp.* (1616) | $1,250,000 | $1,050,000 | 16.0% | $200,000 |
| 2292671 | Morris Twp.* (2324) | $1,299,000 | $1,099,000 | 15.4% | $200,000 |
| 2292671 | Morris Twp.* (2324) | $1,299,000 | $1,099,000 | 15.4% | $200,000 |
| 2279000 | Warren Twp. (2720) | $1,449,000 | $1,249,000 | 13.8% | $200,000 |
| 2326813 | Chatham Twp. (2305) | $1,495,000 | $1,295,000 | 13.4% | $200,000 |
| 2298514 | Chatham Boro* (2304) | $1,499,000 | $1,299,000 | 13.3% | $200,000 |
| 2317707 | Upper Saddle River Boro | $1,799,000 | $1,599,000 | 11.1% | $200,000 |
| 2284026 | Randolph Twp. (2332) | $2,199,000 | $1,999,000 | 9.1% | $200,000 |
| 2318151 | Tewksbury Twp.* (1924) | $3,395,000 | $3,195,000 | 5.9% | $200,000 |
| 2311750 | Bernards Twp.* (2702) | $4,499,000 | $4,299,000 | 4.4% | $200,000 |
| 2275386 | Franklin Twp. (1910) | $1,699,900 | $1,500,000 | 11.8% | $199,900 |
| 2284016 | Nutley Twp.* (1616) | $989,000 | $789,900 | 20.1% | $199,100 |
| 2290150 | Bridgewater Twp. (2706) | $1,495,000 | $1,298,000 | 13.2% | $197,000 |
| 2279632 | Mendham Twp. (2320) | $2,995,000 | $2,799,000 | 6.5% | $196,000 |
| 2283831 | Warren Twp. (2720) | $1,290,750 | $1,100,000 | 14.8% | $190,750 |
| 2281127 | Millburn Twp. (1612) | $2,590,000 | $2,400,000 | 7.3% | $190,000 |
| 2305353 | Lambertville City* (1917) | $875,000 | $690,000 | 21.1% | $185,000 |
| 2296655 | Park Ridge Boro (1147) | $1,285,000 | $1,100,000 | 14.4% | $185,000 |
| 2303960 | Livingston Twp.* (1610) | $925,000 | $745,000 | 19.5% | $180,000 |
| 2289318 | Madison Boro (2318) | $1,375,000 | $1,199,000 | 12.8% | $176,000 |
| 2299466 | Branchburg Twp. (2705) | $875,000 | $699,900 | 20.0% | $175,100 |
| 2296845 | Wayne Twp. (2514) | $699,000 | $525,000 | 24.9% | $174,000 |
| 2276661 | Mountain Lakes Boro | $1,499,000 | $1,329,000 | 11.3% | $170,000 |
| 2274868 | Montclair Twp.* (1613) | $1,149,900 | $980,000 | 14.8% | $169,900 |
| 2268920 | Washington Twp. (2338) | $1,150,000 | $982,500 | 14.6% | $167,500 |
| 2296449 | Nutley Twp.* (1616) | $859,000 | $695,000 | 19.1% | $164,000 |
| 2255221 | Fairfield Twp. (1607) | $979,000 | $815,001 | 16.8% | $163,999 |
| 2277253 | Montclair Twp. (1613) | $1,239,000 | $1,079,000 | 12.9% | $160,000 |
| 2263326 | Lafayette Twp.* (2815) | $1,150,000 | $994,900 | 13.5% | $155,100 |
| 2299404 | Florham Park Boro | $1,350,000 | $1,195,000 | 11.5% | $155,000 |
| 2273499 | Chester Twp. (2307) | $1,650,500 | $1,495,500 | 9.4% | $155,000 |
| 2306298 | Summit City (2918) | $2,350,000 | $2,195,000 | 6.6% | $155,000 |
| 2316455 | Chatham Twp.* (2305) | $1,150,000 | $997,000 | 13.3% | $153,000 |
| 2306162 | West Paterson Boro | $699,000 | $549,000 | 21.5% | $150,000 |
| 2306162 | West Paterson Boro | $699,000 | $549,000 | 21.5% | $150,000 |
| 2292686 | South Orange Village Twp | $879,000 | $729,000 | 17.1% | $150,000 |
| 2312376 | Livingston Twp. (1610) | $899,000 | $749,000 | 16.7% | $150,000 |
| 2329528 | Morris Twp. (2324) | $1,299,000 | $1,149,000 | 11.5% | $150,000 |
| 2321680 | Franklin Lakes Boro | $1,449,000 | $1,299,000 | 10.4% | $150,000 |
| 2318673 | Tewksbury Twp.* (1924) | $2,795,000 | $2,645,000 | 5.4% | $150,000 |
The Excel (XLS) data file can be found here: PriceChange-Oct06b.xls
Grim –
Any idea why some properties in your spreadsheet show increases in list price? I can’t figure out why people would be raising prices from the original list price in today’s market.
could be new construction
I looked at the Readington Twp. listing and its a beautiful house on 3-1/2 acres. Obviously, a lot of money spent renovating it. Just putting central air in a 140 year old house is expensive and must have been miserable to live with that work being done. Must be a story there that they want to sell after going to so much trouble with the house.
The Lambertville house is not cookie cutter either. Theres a fountain used by George Washington preserved under glass in the kitchen! Again, a lot of costly, top of the line renovations.
Plenty of “top towns” there.
Taking the data in aggregate, the average price reduction is 6.6%. Not pretty, but not as dire a situation as the ‘priced reduced’ posting makes it appear.
Matt, I think 6.6 is huge.
Matt,
The average price reduction is 7% (the average of all price reductions). You took the average of all price changes (which include the price reductions, the no changes and the price increase) to get your figure. Just semantics, but the average price change was a 6.6% reduction.
As someone who has been doing this for about 15 straight months now, I’ll tell you that it has changed.
Last year in November, I struggled to get 30 Price Reductions greater than 10%, this past dataset yielded over 500.
jb
This crapbox, discussed previously on this site, just dropped $300K and has about another $800K to go:
http://www.realtor.com/Prop/1069944921
Oct 18, 2006 – $1,795,000 (MLS 2332257)
Nov 05, 2006 – $1,495,000
jb,
My point is you need to look at all the data to get the picture, not just those records that reveal particularly ugly data.
Why wouldn’t one include the price increases to get an overall picture? The entire dataset needs to be considered.
Note the median reduction (using all data) is 5.2%. I might be picking nits here, but a statistician will tell you the median is often the best indicator, as it is not influenced by extreme outliers, either high or low.
Don’t me wrong, a typical reduction in price, 5.2%, 6.2%, 7.2% or whatever, is not pretty. Don’t know if this is a simple correction, or if the bottom is dropping out of the market. In any case, someone in for the mid term run or longer, say three years or more, is doing just fine.
Thanks.
The purpose of the exercise is to illustrate mispricing in the market. I wouldn’t say a large percentage, either way, signifies any real strength or weakness in the market. However, what the percentage does illustrate, is a greater amount of mispricing than we have previously seen.
I want readers to understand that asking prices are nothing more than a part of marketing. They are not selling prices, and they are not the market price. When an asking price seems oddly high, it probably is.
jb
Matt, you really think 3 years will erase the effects from a 100-year-peak?
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif