From the Asbury Park Press:
Lacey residents Preston and Kelly Tripet figured that their three-bedroom ranch house would sell fairly quickly after they priced it at $339,900 in late January.
“Everyone loves the house, but so far, no offers,” Kelly Tripet said. They even have reduced the price of 1581 Dee Road by $10,000, lowering it to $329,900.
“There are so many houses on the market,” she said. “People have too many things to choose from.”
New Jersey’s real estate market continues to be in a slump.
Statewide, home sales in the state dropped 1 percent as of April 30, compared with the same period in 2006, according to the Otteau Valuation Group, an appraisal and consulting firm in East Brunswick. Monmouth and Ocean counties fared better, with sales rising 8 percent and 9 percent respectively, said Jeffrey Otteau, the firm’s president.
But the number of homes for sale remains high. There were 6,409 homes for sale in Monmouth County in the first quarter, up from 5,795 a year earlier, according to Otteau’s figures. In Ocean County, there were 6,876 homes, up from 5,641.
The real estate market is experiencing the effects of problems in the subprime mortgage industry. It’s impacting the market in the midst of its spring selling season, the period from March to July, which is typically a high point for home sales, Otteau said.
And so, the market is in a “holding period,” Otteau said.
“Home sales have stalled and inventory is again rising,” he said. “The big question here is whether the spring market has been delayed until June or lost entirely.”
It wasn’t expected to be this way.
A decline in home prices in late 2006 was supposed to provide a boost to home sales this year, pulling buyers off the sidelines and into the market.
Last year, rising home prices, which had nearly doubled in the first five years of the decade, reached a point where they were too high for first-time home buyers, Otteau said.
“We saw housing affordability improve late last year, because home prices declined and interest rates went lower,” Otteau said.
…
And prices came down in the first quarter as well. Last week, the National Association of Realtors said the median price in the four-county region that includes Monmouth and Ocean counties fell 3.4 percent to $363,500, down from $376,400 in the same quarter a year ago.But lenders started seeing difficulties with subprime loans, Otteau said. These were given to people who had a poor credit history or put no money down on the house. When the interest rates rose on the loans, they had difficulty making their monthly payments.
Now lenders have tightened their requirements for mortgages, he said.
For instance, they required a larger down payment or a higher income, he said. That has made it more difficult for people to afford a house, Otteau added.
…
Kelly Tripet said her family has to sell their home to buy a house with her mother in Lacey to help care for brother who had a boating accident more than a year ago. “We really need to move,” she said.The Tripets are working hard to sell their house, which they bought about seven years ago. For instance, they have held several open houses and cleaned the house, removing clutter and personal belongings to help prospective buyers visualize themselves there.
…
“We have had 20 groups of people look at our house,” she said. But that has not produced any offers so far.“We don’t know what is going on; not even low-ball offers.”
I continue to hear from friends and family who know I am looking to buy a home that its a “buyers market” from what they hear on television. I think I have finally found an analogy to explain my experience.
The real estate market of 2004-2005 (and arguably 2003-early 2006) was like shopping at a boutique on Madison Avenue. You walk in and there are only five items for sale and they are all very expensive. Today’s real estate market is more like walking into say Saks Fifth Avenue or Neiman Marcus. There is much more merchandise available for purchase, this is true. However, all the inventory in the “store” is still very, very expensive. At best, you can purchase at 3-5% off the original retail price.
I don’t know anyone who walks out of Saks claiming what a “deal” they got because they bought a Prada tote at 5% off. I don’t see how buying a home at 5% qualifies as being a buyers market either. The total dollars saved may seem significant, but if you are not the type to buy Prada to begin with, 5% off isn’t going to drive your purchase decision.
Someone needs to tell the Tripet’s, who purchased their home in 2000 for $138,000, that expecting an 11.5% return on your home investment year-over-year might not be a realistic way of pricing in today’s market.
“We saw housing affordability improve late last year, because home prices declined and interest rates went lower,” Otteau said.
jb
how much did affordability improve last year?
Usual cr@p that completely ignores the fact that housing has been grossly overpriced for years.
I just took a look at recent sales in the Barnegat Pines section of Lacey Twp, where the Tripet home noted at the beginning of this article is located.
The subject is a 30 year old 3 bed, 2.5 ranch on an 80 x 100 foot lot, typical of that area. The listing boasts of a new kitchen and upgraded baths.
The ranch sales in the past 6 months are all in the $280K – $300K range. Some of these sales are newer ranches, some are on larger lots.
The subject may command a premium for the extra full bath, and perhaps the larger room sizes are worth a little more. But even after the price cut to $329K, the home is priced way above the recent sales.
I actually know the couple. We used to be neighbors in Red Bank. I’ve lost touch, but I did pay a visit to their house five or six years back and I was struck by how long a trip it was.
Lacey does not work as an NYC commuter area at all and I would bet it’s dubious for Trenton, though AC probably isn’t too bad.
I was a bit surprised by the asking price too, and I sort of keep an eye on that market.
Good luck to them, there’s a lot of inventory out there.
BTW, they should sue the Press’s photographer, that picture is crap.
A decline in home prices in late 2006 was supposed to provide a boost to home sales this year, pulling buyers off the sidelines and into the market.
So, houses double in price in a few years, but I’m supposed to get all giddy because they come down 3-5%?
Seneca,
I agree. My only issue with your analogy is that at least you walk out of Saks with Prada.
Today’s market is more like walking into a K-Mart where everything is marked-up to Saks prices, but everyone around you tells you how great it is because they are having a 5% off sale.
I agree with everyone on this thread. Prices need to revert to normalcy. I think another thing against this house is that the water in Lacey has uranium in it and is suspect in the high numbers of children with cancer.
Lindsey-
As far as commuting to NYC from Lacey goes, you should see the Lacey Road Parkway exit at 5PM during the week….bumper to bumper.
Some of these citizens didn’t even bother to re-register their cars to Jersey and still sport NY license plates.
What’s going to happen to their property tax bills if the Nuke Plant is not granted an extended license to operate???
Hey where is that realtor who kept saying how great they are, can’t they sell this house!!! The thing I don’t get is if they bought the house at 138K with 20% down they should of had only a 110K mortgage that they could have refinanced into a 10 year when rates hit the bottom in 03/04 so there is no reason they should have a mortgage 7 years later over 100K. Why the hell do they need 329K for that house. They could sell it in a second with no realtor for 300K and walk away with over 200K cash in hand. But most likely these guys like everyone else used their house like a broken slot machine and cashed it all out and now they want the buyer to cover their SUV’s and vacations and their realtor and closing fees and still let them come up with a large enough profit to buy a trade up. BOO HOOO. I paid 280K for my starter in 2000, did the ten year refinance in 2002 like nearly everyone else and I am halfway done on the ten year mortgage. So what is up with these guys and why should we feel bad.
a bad job
A bird in the hand is worth two in the bush
A bird may be known by its flight