Preliminary October sales data for Northern New Jersey is in..
The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 1000, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.
(click to enlarge)
The second graph is another view at the sales data for the first ten months of the year. Please note that this graph does cross at zero.
(click to enlarge)
The third graph displays only October sales, 2000 to 2006 YOY.
(click to enlarge)
The last graph displays October sales, 2000 to 2006 YOY, broken down by county.
(click to enlarge)
The numbers:
January
Average Sales (2003-2005): 2000
2005 Sales: 2013
2006 Sales: 1705
(Down 15.3% Year Over Year)
February
Average Sales (2003-2005): 1583
2005 Sales: 1578
2006 Sales: 1395
(Down 11.6% Year Over Year)
March
Average Sales (2003-2005): 2193
2005 Sales: 2256
2006 Sales: 2033
(Down 9.9% Year Over Year)
April
Average Sales (2003-2005): 2322
2005 Sales: 2383
2006 Sales: 1817
(Down 23.8% Year Over Year)
May
Average Sales (2003-2005): 2615
2005 Sales: 2725
2006 Sales: 2298
(Down 15.7% Year Over Year)
June
Average Sales (2003-2005): 3486
2005 Sales: 3682
2006 Sales: 2911
(Down 20.9% Year Over Year)
July
Average Sales (2003-2005): 3495
2005 Sales: 3338
2006 Sales: 2428
(Down 27.3% Year Over Year)
August
Average Sales (2003-2005): 3661
2005 Sales: 3668
2006 Sales: 2599
(Down 29.1% Year Over Year)
September
Average Sales (2003-2005): 2854
2005 Sales: 2655
2006 Sales: 1968
(Down 25.9% Year Over Year)
October
Average Sales (2003-2005): 2570
2005 Sales: 2280
2006 Sales: 1867
(Down 18.1% Year Over Year)
Caveat Emptor!
James (aka Grim)
Frankly, I don’t see a bottom developing yet.
At this point were compounding year over year losses of sales volume. While a year over year decline of 18.1% is slightly lower than what we’ve seen over the past few months, realize that the decline was in full swing last October.
looks like submarine captains log
Is there a trend? I cannot discern one.
From Bloomberg:
Australian Central Bank Raises Interest Rate to 6.25%
Australia’s central bank raised its benchmark interest rate to the highest in almost six years today as Governor Glenn Stevens attempts to stem inflation.
The Reserve Bank of Australia raised the overnight cash rate target a quarter percentage point to 6.25 percent, as predicted by all 24 economists surveyed by Bloomberg News. It was the third increase this year and the first since Stevens became Governor.
Annual inflation breached the central bank’s target range of between 2 percent and 3 percent in the past two quarters as the jobless rate fell to a 30-year low and gasoline costs soared. The inflation rate will be among the fastest of any industrialized economy this year and next, which has fueled gains in the nation’s currency as traders bet on a widening spread between Australian and U.S. interest rates.
That sure is some curve on Morris county. Wow!
From the AP:
Hovnanian Sees 4Q Net Loss
Homebuilder Hovnanian Enterprises Inc. said Tuesday it expects to post a net loss in its fiscal fourth quarter, including charges totaling about $300 million.
Hovnanian said the about 50 percent of the charges are associated with inventory impairments, with the rest for land option deposit write-offs.
…
Hovnanian said the results reflect “a continued high level of contract cancellations, driven in part by the inability of buyers to sell their existing homes.”
Yes, what’s the deal with Morris? Perhaps a lot of speculators were driving the market until ’05.
HOV 5 Day graph. Sputter Sputter Sputter.
http://finance.yahoo.com/q/bc?s=HOV&t=5d&l=on&z=m&q=l&c=
In other news…
a shakedown in the bond market. Seems like UBS was possibly hoarding treasuries in the market.
http://business.timesonline.co.uk/article/0,,13129-2442748,00.html
Also,
i think someone may have posted this already but just in case.
“Bleak Houses” by Forbes.com
http://www.forbes.com/markets/2006/11/07/toll-beazer-homes-markets-equity-cx_jl_1107markets04.html
no Hudson county graph available??
“inventory impairments”
I love this terminology.
Hov down in regular trading, down in after hours. Get used to this, as Chi. noted, the trend is your friend. Go against it and pay the consequences, go with it and reap the rewards. Your choice.
Sorry Will, but no. I don’t have access to the MLSGuide data for Hudson. GSMLS only covers a small portion of Hudson County.
jb
HudsonWill,
Hudson???
Wow have sales really tanked!
Realtors are really getting desperate, but the NAR assures us that they are not.
its a good time to buy and sell. and rent.
Look out below.
The compensation for realtors probably at 15 year lows.
Some realtor gimmick terms. “Motivated” “Present all offers” “Reduced” “Quick sale”
Can anyone add any others?
Can someone look up a property for me, and advise if it was listed before at a different MLS #?
MLS 233 4923
Thank you!
Ones I’ve read in the past month:
Seller will pay all HOA for next 12 months!
Come back and you won’t believe the difference a fresh coat of paint has made on this house!
$10,000 under market value!!!!!
Don’t delay, this one won’t last.
[It’s my Sunday morning chuckle. But I prefer price reduced $20k, week after week.]
Consumer Borrowing Down in September
Tuesday November 7, 3:06 pm ET
By Marcy Gordon, AP Business Writer
Consumer Borrowing Down in September by Biggest Amount Since Early 1990s
WASHINGTON (AP) — Consumer borrowing fell in September by the largest amount since the recession of the early 1990s, weakened by a huge drop in auto loans.
The Federal Reserve reported Tuesday that consumer borrowing declined at an annual rate of 0.6 percent in September, compared with a 4.6 percent rate of increase in August. Borrowing fell by $1.2 billion in September — the biggest drop since a $1.78 billion decrease in April 1992
“Can anyone add any others?”
Crashing,
Desperate. Don’t you love, “owners wants offers”
No s*it. They have a money pit stuck up their *ss!!
yeah, whats up with Morris County….?
Thats one hell of a slope on that yellow line.
SAS
I think this month (nov) will be really telling. If you look at the unadjusted sales data (the first graph), looks like everything ticks upward in Nov into Dec, than back down again for Jan-Feb, than the we get the second and most obvious uptick. If I am reading this graph correctly, and if we don’t see that first inital Nov uptick like in the past few years, and we just see a continous downward …..wow….look out below.
Looks like the next 2 months may give you your crystal ball.
yes? no? would do you say bloggers? maybe my eyes are starting to go…
SAS
btw–
nice work Grim.
SAS
“…if we don’t see that first inital Nov uptick like in the past few years, and we just see a continous downward …..wow….look out below.
Looks like the next 2 months may give you your crystal ball.”
Agreed. In terms of trends i think it would show us that you could truly kiss hope for the rest 06 good bye. The best you could hope for after that as a seller would be to wait for the mirage that is spring 07. If they cant unload in spring then i’m afraid the mirage will turn out to be David Lereah serving more kool aid from the unemployment line. Mmmm just in time for summer.
And yes nice work Grim. Thanks for the latest stats!
Ah so the NAR ad seems to be timed with this trendy uptick during nov / dec.
Looks like its gonna be another year til we think of buying a house…
I keep seeing houses on gsmls and in the pictures a lot of them are vacant…. how can people just support keeping a house like that (unless they are independently wealthy???)
Grim, thanks indeed. Great stuff.
This post will stay at the top of the page today.
jb
Crashing,
One of my favorites is a quote from a realtor at an open house I visited:
“This house could be yours at 6PM tonight.”
If that chart doesn’t scream lowball offer time, I don’t know what else will…
Maybe Homer Does have the right idea…
Come on Bob.. Waiting for a boooyaa to start the day…
Caution, home pricing could go much lower in
2007 and 08.
If you think we have a problem now, you ain’t
seen nothing yet. Unless the Feds step in.
Now we have the evidence to show why the NAR came out with their BS ads.
Plunging sales = lower commissions spread out among a record level or realtors.
Suck it up Realtors. The pendulm has swung the other way. More savings (if you have any) going to be burned up in the next 12 months.
IF YOU ARE A BUYER AND YOU PAY ANYWHERE NEAR ASKING YOU DESERVE THE PUMMELING YOU WILL GET AS YOUR HOUSE DEPRECIATES IN VALUE. YOU HAVE BEEN WARNED NOW BY THIS BLOG AND THE MAIN STREAM MEDIA. nO FINGER POINTING FOR YOUR STUPIDITY.
BLEED’EM DRY!
BOOOOOOOOOOYAAAAAAA
Bob
Empty Houses:
I too wonder about these empty houses. That has to be the height of stupidity to hold two mortgages and a bridge loan hope for your La-la price !!
From the graphs it looks like the number of homes sold started declining in 2003/2004 but prices held up until this year, but now I guess the decline in price is starting.
A lot of pain is comeing to some people who bought in the last 2/3 years and have to sell in the next couple of years.
IF YOU ARE A GREEDY GRUBBING ‘ENTITLED” TO RICHES SELLER YOU BETTER TAKE NOTE OF THE ABOVE GRAPHS.
ACTUALLY YOU SHOULD BE FRIGGEN WORRIED!
WORRY!
LOWER YOUR FAIRY TALE PRICES AND JUST MAYBE JUST MAYBE YOU MAY BE ABLE TO SELL YOUR FAIR PRICED HOUSE. NOT A BARGAIN BUT FAIR PRICED.
LIKE AT LEAST 25% LOWER OFF OF 2005 INSANE PRICES.
THE HOUSING BUST IS PROGRESSING. LOTS OF PAIN SLEEPLESS NIGHTS AND MISERY ON THE WAY.
BOOOOOOOOOOYAAAAAAAAA
Bob
Saw a Dreamer moving out of their palace yesterday. 2 big moving vans the last few days. Must be carrying 2 mortgages now
hehehehe
This is not 2004-2005 It’s 2006 heading into 2007 and lots of grubbers going to be in for a nightmare scenario of double bills.
Let the pain begin.
BOOOOOOOOOYAAAAAAAAAA
Bob
Starve realtors Starve!
You and your grubbing buddies trashed buyers the last 3-4 years.
IT’S PAY BACK TIME.
BOOOOOOOOYAAAAAAA
Bob
Spelunker,
“Ah so the NAR ad seems to be timed with this trendy uptick during nov / dec.”
Indeed, that is a very good point.
SAS
From the Forbes Article:
When will the slowdown stop? Don’t ask Chairman Robert Toll. “We continue to look for signs that a recovery is imminent but can’t yet say that one is in sight,” he said in a statement.
Atleast Bob Toll has come clean on this a number of times. Unlike the scam artist David Lereah. What I don’t understand is why should NAS be concerned about prices they should be more concerned about volume of sales as this is what gives them their commission. 50K more in the price of a house is only 3000 more for the realtor. If they encourage housing prices to come to reasonable levels, I do believe sales will increase without them having to take out full page phony ads in National newspapers. Many of us on this forum and other people I know will consider buying if they can get a home they can afford.
NAR should change their strategy from promoting prices to promoting sales. Everyone wins, etc the greedy grubbers and idiots who jumped on the housing bandwagon in the last two years beleiving the scam artists.
“NAR should change their strategy from promoting prices to promoting sales”
Anti,
They will. I can just see it now, buying a home is the American thing to do, raise a family, live in a nice neighborhood. Although it has proven to be a great investment over time, it should not be utilized as a get rich quick scheme, etc….. Kind of like a Walton’s theme, grandma and apple pie. It’s coming.
From BusinessWeek:
How Deep Housing’s Decline?
Rumors of the real estate market’s resurrection are greatly exaggerated, according to three major homebuilders who see no sign of daylight
…
Remember those headlines about the U.S. housing slump possibly nearing an end, heralding a turnaround in 2007? Well, forget about it. Three of the major homebuilders just checked in with reports showing that they are decidedly not on board with that view.
http://flippersintrouble.blogspot.com/
Pigeons, this is what happens when you do not THINK, but act emotional.
SPRING 2007 HOUSING BUST!
THE CARNAGE IN RE LALALALAND IS GOING HORRIFIC.
BOOOOOOOOYAAAAAAAA
Bob
Here is a listing where the owners are being so misled by their realtor. First off, they agreed to an exclusive listing. Then the price.
http://www.weichert.com/search/realestate/PropertyListing.aspx?P=9168542&cityid=7315%2c56309&type=new
Plus, this house is right next to a lot that has been approved for subdivision (only 3 lots approved by the town even though the write up says potential for 4).
http://www.weichert.com/search/realestate/PropertyListing.aspx?P=8914624&cityid=7315%2c56309&type=new
BW Article. I think they got the wind now !!!
http://www.businessweek.com/bwdaily/dnflash/content/nov2006/db20061107_523557.htm?chan=top+news_top+news+index_businessweek+exclusives
How Deep Housing’s Decline?
Rumors of the real estate market’s resurrection are greatly exaggerated, according to three major homebuilders who see no sign of daylight
Remember those headlines about the U.S. housing slump possibly nearing an end, heralding a turnaround in 2007? Well, forget about it. Three of the major homebuilders just checked in with reports showing that they are decidedly not on board with that view.
Can I get a location on MLS 2337998? Thanks in advance.
Holy smokes Bob that’s a great site.
http://money.cnn.com/2006/11/08/real_estate/mortgage_apps/index.htm?postversion=2006110808
Mtg apps up
Someone had a question about the decline Condo/Co-op & Twnhs prices compared to SFH prices, so I broke out that information separately from the SFH data.
Condos and townhouses were the hot “thing” and they seem to be holding up better then SFHs. Maybe “they” were wrong about retirees moving away and they are just downsizing and reducing the amount of physical maintenance needed for a home? Or people in general like the low maintenance of a condo or townhouse? In any case, it’s interesting.
For Bergen County ONLY, here is the NJMLS average & median price along with the number of homes sold and number under contract in October (10/1-31) for the past 11 years. This is for residential SFH listings; this does NOT include Condos/Co-ops & Twnhs.
Year Avg$ Med$ Sold UnderContract
1995 $255,296 $255,000 589 581*
1996 $261,618 $215,000 619 674
1997 $271,432 $219,000 642 652
1998 $277,425 $220,000 651 656
1999 $340,098 $259,000 596 468
2000 $373,225 $274,000 559 609
2001 $417,626 $329,000 648 552
2002 $478,221 $360,000 558 609
2003 $503,135 $395,000 701 647
2004 $562,756 $460,000 626 683
2005 $676,837 $545,000 573 577
2006 $626,462 $480,000 506 553 as of 11/8/06 8:35 AM EST
And here is the same data for Condos/Co-ops, Townhouses ONLY.
Year Avg$ Med$ Sold UnderContract
1995 $159,616 $137,500 131 125*
1996 $150,100 $146,335 173 158
1997 $164,343 $142,000 184 134
1998 $169,737 $144,000 194 174
1999 $191,628 $159,000 203 148
2000 $214,573 $174,900 226 219
2001 $252,446 $225,000 249 197
2002 $274,952 $245,000 235 241
2003 $296,795 $257,000 275 276
2004 $323,555 $297,500 261 252
2005 $390,080 $350,400 257 220
2006 $380,274 $346,000 199 203 as of 11/8/06 8:30 AM EST
And here is the all inclusive data (SFH, Condos/Co-ops, Townhouses).
Year Avg$ Med$ Sold UnderContract
1995 $237,887 $192,000 720 706*
1996 $237,259 $192,000 792 832
1997 $247,577 $205,000 826 786
1998 $252,701 $205,000 845 830
1999 $298,098 $235,000 799 616
2000 $327,550 $250,000 785 828
2001 $371,773 $299,500 897 749
2002 $417,984 $340,000 793 850
2003 $444,996 $364,000 976 923
2004 $492,371 $420,000 887 935
2005 $588,046 $490,000 830 797
2006 $556,971 $445,000 705 756 as of 11/8/06 8:35 AM EST
*1995 data may be incomplete as I believe this is the first year this data becomes available.
Mtg apps up:
Plenty of fools still around. 30 year fixed rate drops to 6.3% from 6.7% and all of sudden these people are finding buying a home a real deal.
I think many people dont’ look at the total cost, they look at monthly cash flow. A chap in my office bought a new car the other day and to quote him. “A three year loan was too expensive to I took a five year loan as it was cheaper”.
GreenScum Rulz!!!
“In retrospect, the real Fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer than it should have been,”
Wow! The pirranha like feeding frenzy went on for years like a slow movin’ gravy train, you inept FED morons!
I wonder what might be the cause of this CRASH, uhh ‘inventory impairment’, since you’ve left the ‘REAL’ la-la rate unchanged for almost a year?
Or just normal Nov. change with certain demographic who wait until now to buy for bargains. Not telling much about price, just reading the volume.
Thanks Rich for getting the data.
I guess only time will tell how this downturn will go. I think current downturn is different then the past one. If it is not very difficult, it would be great if you can give similar breakdown going forward that would be helpful. Thanks again.
Seneca
2337998 44 cornell drive
lina,
24 orchard listed for 429,000 withdrawn 9/21 coldwell b anker
Relisted 409,000 alper realty
KL
Thanks rhyme!
This is really funny !!!
Toll also said he thinks a change in the country’s political structure could help spark a recovery, citing disgruntled consumers staying on the sidelines when it comes to a major commitment such as a home purchase. “Basically, the country’s unhappy, to say the least,” he said. “Perhaps the unhappiness with the foreign affairs, with the domestic situation, with the election in general…[is] spilling over into our market.”
Anything in the world to get uptick now !!!
Bleed “em DRY!
Make”em Pay!
No Commish!
No MAAS to RE lalalaland propaganda..
You buy near asking, you deserve the pounding.
No crying about your misfortune here.
BOOOOOOOOOYAAAAAAAA
Bob
Thanks Rich for the data. Looks like SFH went up 165% from 1995 to 2005, and Condo/TH went up 145%. Doesnt this goes against the theory that Condo/TH are more speculative.
AntiTrump,
I agree with Pat. If you look at that first graph we have typically seen an up tick in activity during November and December. I am very curious to see what that curve looks like this year.
Bagholders! –
3 bed, 2 bath 1955 Ranch.
For Sale: $419.000 or Rent: $1800 month
3 bed, 2 bath 1987 Townhouse
For Sale: $279,000 or Rent: $1800 month.
Comps for townhouse show similar listings priced in the $319 – $369,000 range. Guess that bagholder won’t be popular with his neighbours.
from Bloomberg
Toll, the largest U.S. luxury home builder, said fiscal fourth-quarter homebuilding revenue fell 10 percent and orders tumbled 58 percent. Beazer Homes, the seventh-largest home builder by revenue, said orders dropped 58 percent.
http://tinyurl.com/ym56xe
HOV also reporting 36% order cancellations in Q4.
As Grim says, transaction volume declines are now COMPOUNDING, given that the downturn began in Aug 05. No end in sight for this crash. Get out of the way and watch it go down
New home inventory much higher than reported
From Credit Suisse today [courtesy of Calculated Risk]:
Inventory in the system is higher than reported – At the end of September, the Census reported that new home inventory (excluding not-started units) was 497,000 units, or 17% higher than the prior year. However, this figure excludes cancellations, which have been a major issue for the market. … If we factor cancellations in the macro number, we estimate that national new home inventory would be closer to 607,000 homes, up 52% or 8.0 months’ supply, the highest level since January 1991.
delicious
rhymingrealtor, Can you post the address & details of this listing?
http://www.realtor.com/Prop/1069820625
Thanks
Bagholders! –
3 bed, 2 bath 1955 Ranch.
For Sale: $419.000 or Rent: $1800 month
3 bed, 2 bath 1987 Townhouse
For Sale: $279,000 or Rent: $1800 month.
Now let’s take the first shack.
$419,000 20% down = $83,800
Loan $335,200 at 6.2% 30 year = $20,780 a year interest or $1732 a month just for interest then add in lets say $6000 in taxes or $500 a month and then insurance $50 a month 0r
$2282 a month
+ $350 interest lost
——-
$2632 a month does not include maintenance or principal paydown.
IT COST YOU AT A MINIMUM $832 A MONTH MORE TO BUY THIS POS SHACK THEN RENT.
But wait $83,800 can earn 5% interest now or $4190 a year or $350 a month
TELL’EM TO SHOVE IT.
YOU’LL OFFER’EM $310,000 FOR IT.
HELLO! WAKEUP!
BLEED’EM DRY!
BOOOOOOYAAAAA
Bob
skep-tic Says:
November 8th, 2006 at 11:34 am
New home inventory much higher than reported
From Credit Suisse today [courtesy of Calculated Risk]:
Inventory in the system is higher than reported – At the end of September, the Census reported that new home inventory (excluding not-started units) was 497,000 units, or 17% higher than the prior year. However, this figure excludes cancellations, which have been a major issue for the market. … If we factor cancellations in the macro number, we estimate that national new home inventory would be closer to 607,000 homes, up 52% or 8.0 months’ supply, the highest level since January 1991.
BOOOOOOOOOOYAAAAAAAAA
Bob
No mercy for starving realtors and greedy grubbing you missed the peak sellers.
Make’em pay for their trash talk the last 3-5 years.
Buyers were trashed on. It’s time to slam’em.
Bababba
Bust! Spring 2007 Housing Massacre.
Do NOT count on it grubbers. It ain’t coming.
Boooooooooyaaaaaaaaaa
Bob
Should i purchase a home now and try to low ball it or should i wait untill mid december. I think the longer i wait he better ?
SURPRISE SURPISE
RUMSFELD TO RESIGN
http://www.msnbc.msn.com/id/15622266/?GT1=8717
National Mortgage News:
‘Lawyers Eyeing Option ARM Suits?
Class-action lawyers are ready to pounce on payment-option adjustable-rate mortgage lenders once resets and delinquencies start to pile up in the second quarter of next year, according to an industry litigation attorney.’
Pop goes the credit bubble.
BOOOOOOOOOOOYAAAAAAAAAA
Bob
“‘Nobody wants to buy something that they think will cost less two weeks or two months later,’ said Toll Brothers CEO Robert Toll.”
WHAT HAPPENED TO ALL THOSE RICH TOLLHOME BUYERS??
BOB?
BOOOOOOOOOOOYAAAAAAAAAAAAA
Bob
NOw that these democrats are in office…
You think they will be turning a blind eye to Fannie and Freddie?
SAS
No financial reports again for Fannie. Special treatment? Why?
Anyone having issues with the site being sluggish or not responding?
jb
THE INSANITY!
THE BUST!
http://marinrealestatebubble.blogspot.com//
NYSE to Cut Staff by 17% After Archipelago Purchase
NYSE Group Inc. plans to cut about 17 percent of its staff, the largest reduction since 1991, eight months after purchasing the Archipelago Holdings Inc. electronic exchange.
NYSE Group, operator of the world’s biggest stock market, will eliminate more than 500 jobs, including 120 full-time consultants, the company said in a statement today. The layoffs will begin immediately
More at link above, Rich
From Marketwatch:
Centex CEO says housing downturn to play out more
Centex Corp. Chief Executive Tim Eller speaking at a UBS-sponsored investor conference Wednesday said judging by previous housing downturns, it normally takes about two and a half years from the peak to the trough. “So we still have further to go” since most experts place the top of the housing boom in July 2005, the CEO said. He called the decline “supply-driven” because speculative investors, who were most active in coastal markets, tried to take profits when home affordability became squeezed. Also, potential buyers are having trouble selling their existing homes and are canceling, which is creating more inventory and drove price declines, Eller said. “In hindsight, we didn’t take our foot off the gas pedal soon enough,” he added.
Nouriel Roubini | Nov 06, 2006 I was this morning on CNBC’s Squawk Box facing off the president of the National Association of Realtors (NAR). The NAR is becoming so “desperate” that is now wasting $40 million in an advertising (call it spin) campaign – the first ever in its history – that is titled with the Orwellian slogan “It is a Great Time to Buy or Sell a Home” (sic!).
More realistically, as David Rosenberg (the sober chief US economist for Merrill Lynch) has titled one of his most recent studies of the US housing market we are now at the “D” level for the housing market where “D…is for Desperation” as he put it. Realtors and home builders must be reall desperate to waste $40m in an double-speak orwellian campaign of spin, lies and non-sense. The reality is the “It is A Lousy Time to Buy or Sell a Home”. It is a lousy time to buy as prices are falling – at an annualized rate of 10% for new homes – and they will be falling another 20 to 30% in the next two-three years as the glut of housing and the bust in the housing market unravels: which fool would buy a home now when a 20% down-payment and the entire equity in such down-payment will be altogether wiped out by a fall in home prices in the next few years? Anyone buying today at the still stratospheric prices will destroy his/her home equity in short order. Since buyers are not fools – in spite of the NAR spin – they are sharply reducing home purchases unless they get huge discounts.
patient homebuyer Says:
November 8th, 2006 at 1:21 pm
SURPRISE SURPISE
RUMSFELD TO RESIGN
I’m really disappointed at the election results. This election will ultimately prove to be an absolute disaster for this country.
Housing Collapse!
Bring it on!
get it over with already.
It’s good for the economy NJ and our future.
You buy near asking uuuzzzz a fool!
BOOOOOOOOOOYAAAAAAAAAA
Bob
Yes, JB.
Timeouts using IE functions and find. Slowness. IE error.
Thanks, Pat. I was wondering why comments seemed a bit slow today.
I really should have picked a better hosting provider. Yahoo Small Business has been nothing but a disappointment.
jb
I usually don’t have much trouble. But on this site, when it rains hard like this, yes.
Just had a Server 500 error, so there are squirrels in the boxes today.
Joel:
Unless you want to agonize like our friend Lina ;-), I suggest you wait a year.
I’m really disappointed at the election results. This election will ultimately prove to be an absolute disaster for this country.
Nah, it won’t make much of a difference. The Dow is actually up today on expectations of government gridlock over the next 2 years. The Dems made big gains, but they don’t have a veto proof majority. Pretty much, I don’t expect a whole lot to change. Then again, I believe that the government that governs least governs best. So I’m okay.
I dunno, but the smart-somebody better start kissing Liebermanbutt.
rummy folded like a cheap suit. threw in
the towel at the wrong time.
but what does he need this for.
now we got some stiff 3rd stringer
We have all seen overpriced homes, but this one should win an award:
http://njmls.com/cf/details.cfm?listnum=2643084&id=999999
It is listed by Prominent Properties, a realtor that uses a technique called “buying the listing”, where they purposely suggest a ridiculously high listing price to the homeowners to win the listing over other brokers that are competing with them. Then after they have tied up the home in a listing contract, they will tell the homeowner to lower the price after a short time.
In the end, the sellers end up with a “stale” listing that sits on the market for much longer than necessary, and finally sells for much less than if properly priced to begin with. This is because this technique squanders the initial buyer interest that occurs when a property is first listed because of the ridiculous asking price.
How do I know? They did it to me and others that I know. Totally unethical.
Jay
Anyone ever come across a fix for that listing link that used to work so well ;-]
Hey, Seneca, I know you had mentioned it too – did you ever find anything out?
Thanks!!
Hey, Chicagofinance, you around? With Toll’s crappy reports, did they give any reason why Hoboken is still doing well? I can’t for the life of me figure that one out. Will it get hit ? I am already seeing places dorpping prices, not selling…I can’t imagine it can go up anymore but I can see it taking a major hit…
Either way, I cannot wait to get out of there.
Holy crap $1.4 mill for that house in Tenafly !!
But what the hell ! Housing will never decline like stocks and will keep going up 6 ~10 percent year after year for ever. Look at all the pile of cash i could be sitting on in a few years when i flip it. No brainer.
starting to see price cuts across the board in the areas I monitor. problem is that the cuts are generally in the 5% range.
not sure if I’m alone here, but I take cuts this small as a signal to stay away.
basically, I take it as indication that the seller doesn’t realize how weak the market is right now and won’t be prone to bargain.
I don’t really know what is going through the minds of these people. they seem to think that pricing is a precise science– that if they just hit the right number, a magical buyer will appear. really the asking price is just an invitation to bargain.
skep-tic:
These sellers are waiting to be saved in 2007 spring. The problem is see is that you have all the unsold supply from 2006 on the market and the normal supply for 2007 coming into the market with possible higher interest rates, once Bernanke gets his head out of the sand and admits that inflation exists !
It will be a perfect storm and 2008 will be a perfect time to buy.
The Spring 2007 recovery theory baffles me. what is supposed to happen in spring 2007? seriously, this is not a rhetorical question
the inventory problem is not going away.
interest rates are not going lower.
the economy is weakening and likely heading into a recession.
I just can’t figure out what hope these people are clinging to.
you guys have to read this article about mortgage fraud, It is unbelievable
http://biz.yahoo.com/special/housing110706_article1.html
inventory levels are a good metric to gauge trends in the market however what isn’t known is how much inventory leads to what % off sales price? can you correlate historical levels of inventory with what prices were at the time? hard to say but today’s sales levels are below 2002 levels yet prices are not. if the downward trend continues it’ll be a slow grind as these things are sticky on the way down particularly with low interest rates continuing to stimulate.
NJGal says:
“Hey, Chicagofinance, you around? With Toll’s crappy reports, did they give any reason why Hoboken is still doing well? I can’t for the life of me figure that one out”
I’m not chifin but I listened to the call and no reason was given for why Hoboken was doing so well. Mr. Toll indicated that NY (all of NY), Princeton area, and NYC were all doing okay for them. NJ as a whole not doing as well.
Jay,
That house was listed in 2005 for $1,469,000.
7/5/05 until withdrawn on 8/31/05
Relisted 11/5/05 until listing expired on 12/31/05
Newly listed on 11/5/06 by a DIFFERENT realtor for $1,450,000.
So I think it’s the owner and not the realtor who setting the price TOO high.
Rich
Thanks DebtVulture. I guess it may be because we’re still a little caught in the craze around here and stuck on the belief that NY (and somehow, NJ as an extension) is “different.” But I just do not understand the appeal of paying 600K for a McCondo in Hoboken – wow, you get to live in a tiny place, for a lot of money, surrounded by overprivileged suburbanites who believe babies and dogs are accessories. Can you tell how much it’s lost it’s appeal for me?:) Used to be nice…
Either way, Toll isn’t killing – they are offering incentives at their 700 Grove.
Thanks Rich, in this case it does appear to be the “crazy” homeowner!
Sal, no good news to report on the broken link. I am going to rely on the fine readers of this blog to help me out with listings and if anyone can help me get the details direct, please let me know.
As for the Tenafly house highlighted by Jay, give me a break! “15 minutes from Manhattan”??!!?!
Please, MANHATTAN isn’t even 15 minutes from Manhattan!
Ricahard: Low fixed rate interest rates, are not really stimulating now it was the low variable rates that did the stimulating.
Nobody cares that fixed rate mtg money is below 7%, prices are too high (although finally starting to come down), in fact many did not care when 30 year money had a 5 hanlde on it, because teaser rates had handles starting at 1 and 2%.
So I do not see cheap 30 year money as being stimulative to the market.
“Should i purchase a home now and try to low ball it or should i wait untill mid december.
Joel,
How about mid Dec, 2008.
skep-tic Says:
November 8th, 2006 at 4:35 pm
The Spring 2007 recovery theory baffles me. what is supposed to happen in spring 2007? seriously, this is not a rhetorical question
the inventory problem is not going away.
interest rates are not going lower.
the economy is weakening and likely heading into a recession.
I just can’t figure out what hope these people are clinging to.
Hey may be my company will double my salary and I will be able to buy a house in the spring of 2007??? And everyone else’s salary will double and all of the suddn house prices seem normal??
Ohh wait it is called inflation…
Thanks for the update Seneca. If I find anything out I’ll post it for you…
A must-read from Thomas Hoenig at Kansas City Fed:
This Time It’s Different (Or Is It?) (PDF)
Hat Tip to Calculated Risk for the link.
jb
Newly listed on 11/5/06 by a DIFFERENT realtor for $1,450,000.
So I think it’s the owner and not the realtor who setting the price TOO high.
I do agree with you that its a lot to do with what the seller wants to price it at. However I think many realtors are doing a lousy job trying to have people be realitic. I just think that realtors are stuck on a hopefully recovery in the spring. I mean yes there will be some people who hesitate, but if a lot of people are having lowball offers excepted it seems like realtors are feeding the BS crap to delay the inevitable. Yes some sellers are gonna be greedy grubbers, and I think we are just at the begining of price decline due to the fact that realtors either fed them crap or just said it not selling lower your price without a decent explanation of why. So I think we need to blane sellers 50% and realtors 50% on the overstocked inventory.
I mean it does not take a brain surgeon to figure out whats going on here.
I am not an economist, and I dont think anyone on here is either, so why can we predict what was going to happen months ago with no education in economy and people who went to college and have degrees couldnt guess there way out of a paper bag.
Here is the tax record for the Tenafly House
Sale Date: 11/29/02
Price: $835,000
Square Ft: 3,152
Asking for 74% increase in 4 years or 18.4% a year. The owner is smoking somthing funny
Wow! Jim that this time it is different speech was great. I am glad to see that rational thinking is back (maybe in style).
In regard to Toll in Hoboken you have to keep in mind alot of the new construction sales can be walked away from before closing. You have many flippers involved in that Maxwell House property. They have in their contracts supposedly that they can’t advertise their place in Maxwell being for sale until after closing. I don’t know the accounting for builders but I wouldn’t be surprised if the sale price is booked as income when the initial contract is signed and before actual closing.
VJ
I do not have acess to Middlesex MLS
KL
vj,
Get directions to the property by clicking on Maps&Directions link. Drive up that road on a weekend and get the address. That’s what we do.
Here is the tax record for the Tenafly House
Sale Date: 11/29/02
Price: $835,000
Square Ft: 3,152
Asking for 74% increase in 4 years or 18.4% a year. The owner is smoking somthing funny
$150,000 per year just for living in the house. Nice gig.
i dont think we have anything like it here but our pals across the pond now have the 52 year mortgage. Yes folks even if you buy a house at the budding age of 25 you wont finish paying it all off until you are in the retirement home or leave the debt to your estate.
http://www.timesonline.co.uk/article/0,,2-2444284,00.html
When will it pop for the UK? What in the world are those guys doing?
You know and I thought we had it bad in terms of seeing light at the end of the tunnel. At least we are seeing prices edging down, housing starts are down and DOM has been rising. Larger inventories, etc.,
Imagine a 52 year loan?!?
How about the indentured Servant mortgage?
Or the left kidney mortgage?
Or the fancy first born mortgage?
i dont think we have anything like it here but our pals across the pond now have the 52 year mortgage.
We have interest only mortgages, which are basically “infinity” mortgages because with the I/O payments you don’t pay any principal. If you can keep refinancing the principal, theoretically you could keep making a monthly payment until the end of time. A 52 year mortgage is actually more conservative, at least you pay some principal.
Grim, how is web traffic these days?
SAS
NJGal Says:
November 8th, 2006 at 4:05 pm
Hey, Chicagofinance, you around? With Toll’s crappy reports, did they give any reason why Hoboken is still doing well? I can’t for the life of me figure that one out. Will it get hit ? I am already seeing places dorpping prices, not selling…I can’t imagine it can go up anymore but I can see it taking a major hit…
Either way, I cannot wait to get out of there.
NJ Gal:
I know people want to act like it doesn’t matter, but it does impact things and there is also a trickle down effect. Recognize that we are discussing NYC, similar substitutes [Hoboken/JC/Brooklyn] and the highest end suburbs. I’m not saying that it makes up for oversupply and other issues, but it is reason that there is a Jeckyll & Hyde kind of vibe in the market. The is a small swath of people who are doing exceedly well for themselves amid all others wandering the desert.
http://www.bloomberg.com/apps/news?pid=20601103&sid=atEk12XYMerk&refer=us
also
http://www.hudsonteatenants.org/tearoom/viewtopic.php?t=457&postdays=0&postorder=asc&start=253
LOL, indeed we do have an infinity mortgage in the IO loan. thanks RentingInNJ
If i look to purcahse during mid december 2006i am going to price down the house by 20 percent and offer that. If they say no screw them go to the next one and keep trying. Whats your opinion on that
Joel,
Better off waiting till Dec 07, then re evaluate.
SAS
wow, this has to take the cake. Good work Jay..
http://njmls.com/cf/details.cfm?listnum=2643084&id=999999
unbelievable
We hear talk about “don’t insult the sellers”
horseshit. how about “don’t insult a buyer”
Prominent Properties Sotheby’s International Realty-Alp. god damn baboons.
now, back to my nightly ritual: warm milk and cognac. I picked up this nightly ritual from a beautiful women from the Ciudad Guayana.
Ahhh…yes… nothing like making love and romance in those exotic countries.
SAS
ok, i think i will rent for 07 until dec and then look probaly do a 6 month lease
Newbie here. Reading some of these comments, I find it amazing that certain people (Joel) would actually make a decision from the advice of several strangers on a message board.
Truly amazing….very sad
Hey newbie, he’s a grown man. He makes his own decisions. If he takes advice from someone, at least he’s taking advice from someone w/ a good head on their shoulders.
I don’t understand how someone could give advice or tell someone what to do when they don’t even know that person’s personal situation.
Advising on a specific date/time to buy a year from now is ludicrous. Its just a guess. No one’s crystal ball is that clear.
A ‘grown man’ would act on this advice? if you say so…
VAI & Mike, I think you’ve made some good points, but the issue here is whether a buyer wants to buy in the midst of a deflating bubble and, if so, how much of that potential deflation they want to factor into the offering price. So, yes, there’s always a risk, but usually not so looming & obvious as this. And second, given the level of commitment represented by a house purchase, it strikes me as an uncommonly good idea to check around and see what other folks think – not just now but at any time. I think there has historically been too little ability of buyers to get any useful (never mind objective) information on the real estate market. Thank goodness for the internet! The information here may not always be accurate, but usually it’s pretty good. Frankly, I could think of worse sources of information….
VAI: Nothing personal to you, but your argument had been used ad nauseum to little effect. Your little rant, while most likely well intentioned, serves as a “trolling” style post in this forum, where with only some exceptions, the general substantive discussions rise above the visceral charge of “you cowardly renter.”
VAI
I read your post, and have a question. How does the time and effort part come into play in terms of reducing risk to minimal, other than spending time finding the “bargain” among current inventory, and still not being sure?
In that case, in a down market, wouldn’t the best strategy be to wait until prices begin to rise again, in order to know the baseline value?
That would entail some risk, as a slight rise in values might not indicate the bottom of the market, but rather a bump in the road, but a few months to a year of flat or rising prices would seem to me to be more indicative of value rather than blindly purchasing on the way down.
Regarding whether or not renters are saving the money, I can guarantee you that I have. My conservative investments for that money do beat inflation, although that may not be the case with every saver, for sure. In addition, I can add to the savings all amounts not overpaid in the past two years, compounded at minimum 5%. Therefore, by logic, every renter who has not overpaid has saved; it shouldn’t be a tough one to swallow. I (overbid) on several homes by a minimum of $100k according to today’s prices. Still a renter, that $100k is money in the bank right now, since it is not tied up in a mortgage.
Rents rising could be an issue if someone lives in a tight market area. Not a real high risk, as alternates and quick moves are rental option outs. Moving in with relatives, taking on a roomate or finding lower-cost alternates serve as rental risk reducers that are not as likely to be common outs for a homeowner.
The homeowner faces serious portability issues right now, and putting a value on that risk is difficult. For me, it has very high values.
Homeowners who are “sitting pretty” incur this risk, as well as risk of higher taxes. So the sitting pretty argument is not a no-brainer, as you have implied.
You took the time to argue for homeownership, but you have failed to value some issues, and I hope this information helps you with other’s perspectives.
Joel:
If you really want to buy Dec 06, I’d say atleast 30% off and prayer cause there is no saying how things might work out for you financially. You will find that even at 20% of today’s asking price it may not make sense.
Val and Mike:
I don’t think anyone will stop buying a house just because someone on this board tell them not too. But if you have been watching reading the posts, many folks here are plugged into the economy and verymuch into the housing market.
I do get your point that no one has a crystal ball, but like anything else in life you have to make decisions and that is hard. Some people make smart decisions and some people don’t and that defines your financial future.
If anyone looks at the hard data now, you will see a declining market. Why would you want to catch a falling knife?
When inventory goes back to about 6%, I will consider the market stabilized. It’s 7.some percent and will get worse.
http://biz.yahoo.com/bizj/061108/1372887.html?.v=3
Another HB lowers earnings forecast (Orleans).
Thanks rhymingrealtor and V for your valuable inputs on #63.
Hey VAI,
You fail to mention that house prices are unaffordable for the avg person. House price increases have far exceeded wage growth for a number of yrears and now it is starting to reverse. This correction needs to take prices on avg down about 30% from peak 2005 prices to gte them to not bargain, but fair value.
Schmucks like you come on here and talk about the past. i do NOT give a damn how well someone did buying in early 1990’s or 1980’s, times when houses traded down at more realisitic price to wage ratios.
READ MY LIPS YOU SCHMUCK…THE PRICE OF HOUSES ARE A RIPOFF AND BUYERS SHOULD BE VERY VERY VERY CAREFUL IN PAYING ANYTHING NEAR ASKING PRICES CUZ THEY WILL LOSE MONEY IF THEY HAVE TO SELL WITHIN 10 YEAR PERIOD.
SAVE YOUR MONEY IT IS MUCH MUCH CHEAPER TO RENT A HOUSE OR CONDO. IN 2 YEARS THIS WILL CHANGE PRICES OF HOUSES WILL BE DOWN AT LEAST 25-35% AND AFFORDABILITY WILL IMPROVE.
NOW FORGET THESE FAIRY TALE PRICES.
BOOOOOOOOOOOOYAAAAAAAAAA
Bob
25-35% off of peak 2005 prices NOT some dream inflated grubbers new price.
These greedy bastards mark up houses higher than 2005, of course the houses just sit and sit and sit cuz the PARTY IS OVER chumps!
Do not trust realtors….friggen leeches.
Starve’em make’em pay for trashing buyers last 5 years. When these starving realtors say something that is not accurate you correct them and question the BS they spew. Let’em know you know sales are plunging and prices are tanking.
bleed’em dry
Bob
SAS Says:
November 8th, 2006 at 10:10 pm
wow, this has to take the cake. Good work Jay..
http://njmls.com/cf/details.cfm?listnum=2643084&id=999999
I am sorry but WTF???
Is that what 1.5mil (unattainable by 99%+ of population buy’s you now??
Once again WTF?? enev in california 1.5mil homes are a least very nice looking. This one is big box with add-on’s to it…..
Another greedy grubbing Dreamer. Anyone buys this thing anywhere near that price will lose bigtime!
You buy overpay and lose do not whine about it.It’s your own fault noone elses.
Many have been warned by this blogger and others as well as the main stream press finally.
Babababa
Nothing less than 25% off peak 2005 Says:
I thought bob was blow blow blow your house down. When did he change his moniker??
KL
I read through the article written by the President of the Federal Reserve Bank of Kansas City. To quote him:
“The simple fact is there are times when it is wise not to jump on the bandwagon.”
This has been my advice to all my friends. I do agree that Real Estate is a terrific investment but this is the WRONG TIME to jump on the bandwagon.
Housing is NOT an investment. it is shelter. To many bozos think they are entitled to a profit when they buy a house and that their retirement is based on housing appreciation.
Wrong!
lots of fools going to be shocked as their bloated castle does not appreciate but depreciate over the next several years.
VAI,
Read my past posts, no reason to bore the hell out of everybody else here. Oh by he way, owned since 1985, sold in 2005. $ doing much better outside of RE.
“First, and this is a tough one for me to swallow, one has to believe that renter’s are actually saving that money.”
Why is that? People are getting into homes today because 80% of their income is going into paying a IO loan. Are today’s buyers saving money? Or are they going into further debt every day as their new home depreciates? weekly.
tsk tsk. Thank you but i will be a cowardly renter for now.
oh and save the money i dont spend by buying today.
hey Mike at 123
“Newbie here. Reading some of these comments, I find it amazing that certain people (Joel) would actually make a decision from the advice of several strangers on a message board”
you wanna know what sad is…
all those knuckleheads whom bought under the advice of a NAR real estate agent. You don’t think that is sad?
SAS
Mike,
I dont believe anybody needs a crystal ball to know that a house you buy today will be cheaper in a couple of months. The writing is on the wall for this one. Anybody in their right mind and has come off the Kool Aid would tell you to wait until at least somewhere-in-time 2007.
BTW. have you purchased recently or considering purchasing soon?
you wanna know what sad is…
all those knuckleheads whom bought under the advice of a NAR real estate agent. You don’t think that is sad?
SAS
HAHAHAHHA!!!!!!!
BOOOOOOOOOOOYAAAAAAAAAAAA
Bob
I will wait untill early 2007 to start looking and make offer really really low and see what people take. But i definatly agree on the 25 to 30% ruled when purchasing a home at this current time. Also i am very very Young AHH 20
“READ MY LIPS YOU SCHMUCK”
While provocative, this comment is an absolute classic.
Bob is like Alan Greespan’s guilty conscience, brought to life to warn people.
AG realizes what he did, especially on the ARM recommendation, and is now doing his best to redeem himself in secret. He pays Bob, not on an hourly rate, but on a piecework basis…by the BOOOOYAAAAA.
BOOOOOOOOOOOYAAAAAAAAA
Bob
You can count me as one renter saving up their shekels. A nice chunk in CD’s and the rest diversified amongst JPY based co’s, RMB based co’s, HKD based co’s, CAD based co’s and some good ol’ USD based co’s.
Is there a way i can filter out posts by a certain user? This website is very informative but this Bob guy is wasting a lot my time with his posts. I scroll past them most of the time but it would be much easier if there was an ignore button.
Thanks again for the website.
Mr. Info:
What would winter be without snow? Florida?
What would merlot be without the big box? An expensive hangover.
What would this blog be without Bob?
….but then you would miss THE CLASSIC.