Few takers for flooded Jersey homes

From the Record:

After the floods, sellers face lower prices

Even before you open the door, you smell the mildew inside the white-brick house in Lincoln Park, a block from the Pompton River. Two feet of water sloshed into the first floor after Hurricane Irene hit, coating the furniture with dried river mud and destroying the floors and walls.

Before the flood, the house was for sale, with an asking price of $269,000, down from $309,000. Now it’s off the market, and its future is unclear.

“It’s really not salable at this point,” says listing agent Tina Dobsa of Re/Max Legends in Wayne.

The house is a stark illustration of the plight of many homeowners in North Jersey flood zones who want to sell. The problem for them is that buyers may prove just as unwilling to face the thought of flooding. When a few years pass between floods, buyers are more willing to accept the risk in exchange for a price that’s typically 10 percent to 25 percent below that of similar homes on dry ground.

But after repeated floods over the past two years, “there’s not enough time to forget,” says Pat Lowe, a Coldwell Banker agent in Wayne. As a result, values in flood zones have plummeted in a housing market that’s already weak.

“People are really going to take a hit on this,” says Jennifer Barone, an agent with LeConte Realty in Hasbrouck Heights.

“Nobody’s going to buy a house in a flood zone,” Dobsa says. “What kind of value would you put on it?”

“The only thing sellers can do is lower the price,” says Dan Weixeldorfer, broker at Re/Max Legends in Mahwah. “You can’t move the house and you can’t erase the stigma. There’s a value for everything; if the price is low enough, people are willing to take the risk.”

Sal Poliandro, a Re/Max agent in Saddle River, says the only calls he’s gotten on flood properties in Passaic County are from investors, often offering less than $100,000.

And since the hurricane, buyers are on the alert for any hint of flood problems, real estate agents say.

“The first question everyone asks is if the owners got water,” says Angele Ekert, a Coldwell Banker agent in Ridgewood. “I showed a home where the sellers had recently painted and paneled the basement. The agent assured us there was no water during the hurricane, but my buyer is certain they are hiding something.”

Appraiser Michael Keough of Pompton Lakes says homes in the area sold for more than $300,000 at the market peak.

What properties in the flood zone will actually sell for — and how long it will take — is still a question, Keough says.

He says some homeowners are so devastated and disgusted by the repeated floods that they are simply walking away, allowing the lenders to take the properties.

Kathy Brown, who lives on Lincoln Avenue next to the house that exploded, also says several of her neighbors say they won’t return to their flood-damaged homes.

Elizabeth Briseno says that when she and her boyfriend bought their Pompton Lakes home in December 2008, they were told they needed flood insurance but that there hadn’t been a claim in decades. But they’ve been flooded twice this year — in March and after Hurricane Irene. More than $20,000 worth of their belongings were destroyed, Briseno says.

Making matters worse, both are out of work and unable to pay the mortgage.

They are attempting to sell the house as a short sale, asking $150,000 — less than half of what they paid three years ago. Even at $150,000, they’ve gotten no offers, says Poliandro, their agent.

“The flooding has changed the real estate market,” Briseno says. “There’s no one buying here now.”

This entry was posted in Economics, New Jersey Real Estate. Bookmark the permalink.

40 Responses to Few takers for flooded Jersey homes

  1. grim says:

    Tear ’em down.

  2. serenity now says:

    Underwater in so many ways.

  3. Shore Guy says:

    “Few takers for flooded Jersey homes”

    It is so hard to believe that this would be the case. Who would ever believe that people would be wary of sinking hundreds-of-thousands of dollars into an asset that a flood is likely to devastate?

  4. Shore Guy says:

    “Tear ‘em down.”

    And turn them into public green-space.

  5. Mike says:

    Good Morning New Jersey

  6. Shore Guy says:


    Sleeping in today?

  7. 30 year realtor says:

    Pompton Lakes may currently be the sickest market in suburban North Jersey. Between the DuPont plume and the flood areas 90% of the town is untouchable in the eyes of buyers.

  8. speedkillsu says:

    # 7 ,betcha that won’t affect property taxes .

  9. homeboken says:

    Red Devils totally dismantled at home. The lack of effort was a bit shocking.

  10. Mike says:

    Shore No.6 Down your way last night In Wall for a party. One of the best tastefully decorated homes I’ve ever been in

  11. Plume, the Magpies are for real this year. Champions’ League football will be ours!

    Gooners will be relegated.

    Good on your kid for her booking. Takes a lot to get shown a card at U-8. Must’ve been a crunching tackle.

  12. boken (9)-

    Old, slow and entitled. Also, Glazers are still drowning in debt.

    Red Devils will be in League 1 within five years.

  13. Real money in professional sports buys real talent.

    Debt gets you NBA-like posers.

  14. Juice Box says:

    Volcker wants to end the Mortgage Market support.

    Sun Oct 23, 2011 12:00pm EDT

    (Reuters) – Former Federal Reserve Chairman Paul Volcker is advocating for regulatory control over the money-market mutual fund industry and believes the government should stop financing mortgages.

    Volcker said in a recent speech that money market funds have exacerbated stress in the financial markets because they pulled back on short-term lending to European banks.

    If money-market funds are to continue providing significant funding to regulated banks, they should be subject to capital requirements, deposit insurance protection and stronger oversight of their investments, Volcker said.

    “The time has clearly come to harness money market funds in a manner that recognizes both their structural importance in diverting funds from regulated banks and their destabilizing potential,” Volcker said in a speech last month that was highlighted by The New York Times on Saturday.

    The speech, titled “Three Years Later: Unfinished Business In Financial Reform,” also criticized the government’s role in the U.S. mortgage market through government-sponsored enterprises Fannie Mae and Freddie Mac.

    Today, he noted, the U.S. residential mortgage market is almost entirely dependent on financial support from taxpayers. The federal government placed those entities into conservatorship in 2008 and has funded hundreds of billions of dollars’ worth of losses on their mortgage portfolios.

    “It is important that planning proceed now on the assumption that Government Sponsored Enterprises will no longer be a part of the structure of the market,” Volcker said.

    In his interview with the Times, Volcker acknowledged that it will take time to remove government support from the mortgage market, which is still struggling to repair itself, but said policymakers now have “an opportunity to get rid of institutions that shouldn’t exist.”

    Volcker’s opinions are highly regarded among some economists and regulators and he was a top adviser to President Barack Obama on financial regulatory reform.

    But a measure he championed to restrict banks’ ability to bet with their own capital, now known as the Volcker rule, has become a target for financial industry lobbyists seeking to blunt its impact on Wall Street profits.


  15. NjescaPee says:

    Another nice day grilling a couple of strip steaks and some zukes

  16. Shore Guy says:


    Is that to get your strength up for gawking at the bars tonight?

  17. NjescaPee says:

    Alright, yeah oh well :)

  18. Shore Guy says:

    Don’t forget to being a paint brush, from the photos it looks like there is a demand for those who can paint others.

  19. NjescaPee says:

    I bicycled to Old Town earlier
    Today lots of fresh talent. Gonna be fun this week!

  20. dirtyjerzy says:

    Anyone familiar with areas affected by fracking in PA? Since giving up on NJ RE, i’ve decided weekend lakehouse in the Poconos might be the answer.

  21. 3b says:

    #21 Dont give up, prices will continue to fall; property taxes are another story.

  22. nj escapee says:

    OKay Okay, maybe armagedon is right around the corner aferall.

    World power swings back to America

    Assumptions that the Great Republic must inevitably spiral into economic and strategic decline – so like the chatter of the late 1980s, when Japan was in vogue – will seem wildly off the mark by then.

    Telegraph readers already know about the “shale gas revolution” that has turned America into the world’s number one producer of natural gas, ahead of Russia.

    Less known is that the technology of hydraulic fracturing – breaking rocks with jets of water – will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West.

    “The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d),” said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.

    Total US shale output is “set to expand dramatically” as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.

    The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.

    “The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity. As US reliance on the Middle East continues to drop, Europe is turning more dependent and will likely become more exposed to rent-seeking behaviour from oligopolistic players,” said Mr Blanch.

    Meanwhile, the China-US seesaw is about to swing the other way. Offshoring is out, ‘re-inshoring’ is the new fashion.

    “Made in America, Again” – a report this month by Boston Consulting Group – said Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap. China is no longer the “default location” for cheap plants supplying the US.

    A “tipping point” is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture.

    “A surprising amount of work that rushed to China over the past decade could soon start to come back,” said BCG’s Harold Sirkin.

    The gap in “productivity-adjusted wages” will narrow from 22pc of US levels in 2005 to 43pc (61pc for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.

    The list of “repatriates” is growing. Farouk Systems is bringing back assembly of hair dryers to Texas after counterfeiting problems; ET Water Systems has switched its irrigation products to California; Master Lock is returning to Milwaukee, and NCR is bringing back its ATM output to Georgia. NatLabs is coming home to Florida.

    Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump.

    As Philadelphia Fed chief Sandra Pianalto said last week, US manufacturing is “very competitive” at the current dollar exchange rate. Whether intended or not, the Fed’s zero rates and $2.3 trillion printing blitz have brought matters to an abrupt head for China.

    Fed actions confronted Beijing with a Morton’s Fork of ugly choices: revalue the yuan, or hang onto the mercantilist dollar peg and import a US monetary policy that is far too loose for a red-hot economy at the top of the cycle. Either choice erodes China’s wage advantage. The Communist Party chose inflation.

    Foreign exchange effects are subtle. They take a long to time play out as old plant slowly runs down, and fresh investment goes elsewhere. Yet you can see the damage to Europe from an over-strong euro in foreign direct investment (FDI) data.

    Flows into the EU collapsed by 63p from 2007 to 2010 (UNCTAD data), and fell by 77pc in Italy. Flows into the US rose by 5pc.

    Volkswagen is investing $4bn in America, led by its Chattanooga Passat plant. Korea’s Samsung has begun a $20bn US investment blitz. Meanwhile, Intel, GM, and Caterpillar and other US firms are opting to stay at home rather than invest abroad.

    Europe has only itself to blame for the current “hollowing out” of its industrial base. It craved its own reserve currency, without understanding how costly this “exorbitant burden” might prove to be.

    China and the rising reserve powers have rotated a large chunk of their $10 trillion stash into EMU bonds to reduce their dollar weighting. The result is a euro too strong for half of EMU.

    The European Central Bank has since made matters worse (for Italy, Spain, Portugal, and France) by keeping rates above those of the US, UK, and Japan. That has been a deliberate policy choice. It let real M1 deposits in Italy contract at a 7pc annual rate over the summer. May it live with the consequences.

    The trade-weighted dollar has been sliding for a decade, falling 37pc since 2001. This roughly replicates the post-Plaza slide in the late 1980s, which was followed – with a lag – by 3pc of GDP shrinkage in the current account deficit. The US had a surplus by 1991.

    Charles Dumas and Diana Choyleva from Lombard Street Research argue that this may happen again in their new book “The American Phoenix”.

    The switch in advantage to the US is relative. It does not imply a healthy US recovery. The global depression will grind on as much of the Western world tightens fiscal policy and slowly purges debt, and as China deflates its credit bubble.

    Yet America retains a pack of trump cards, and not just in sixteen of the world’s top twenty universities.

    It is almost the only economic power with a fertility rate above 2.0 – and therefore the ability to outgrow debt – in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

    Europe’s EMU soap opera has shown why it matters that America is a genuine nation, forged by shared language and the ancestral chords of memory over two centuries, with institutions that ultimately work and a real central bank able to back-stop the system.

    The 21st Century may be American after all, just like the last.


  23. nj escapee says:

    Correction: OKay Okay, maybe armagedon ISN’T right around the corner aferall.

  24. grim says:

    Like I said, Joe 6 will get screwed no matter what..

    From Calculated Risk:

    • And a rumor: Back in August, the FHFA, Treasury and HUD put out a request for input on the disposition of Fannie, Freddie and FHA REOs. The three entities own about 250,000 properties and approximately 800,000 homes backed by Fannie, Freddie and the FHA are in some stage of foreclosure. I’ve heard a rumor that an RTC like disposition program for Fannie/Freddie/FHA properties is in the works and might be announced in the next couple of weeks (this is a rumor only!). This would probably involve selling REOs in bulk to investors and include some sort of plan to rent them to the current occupants.

  25. dirtyjerzy says:

    I’ve lost faith in NJ specifically because of the taxes. If I come across FU money, maybe i’ll get a place – otherwise I’ll let my landlord worry about it.

  26. chicagofinance says:

    Fuking JETS!

  27. Comrade Nom Deplume says:

    (11) meat

    actually there was no card on the play but she did get whistled for the foul.

    Today her Brazilian trained team took an absolute beating from a british trained team that played together at the u 8 level. Very physical game yet my girl did extremely well, and won quite a few battles despite being pushed around.

    One coach said it was her best game so far, and another coach said her play was like night and day compared to the beginning of the season. He said “whatever you’re doing, keep it up.”

    What I’m doing is training her myself and using the UK trainer (the magpies fan). It’s a bit more intense but the results are clear. British soccer training beats brazilian soccer training every time.

    And she’ll need the training too. Next week we play livingston and they are known as a very dirty team.

  28. Comrade Nom Deplume says:

    (11) meat

    Actually, its u9 level.

    I’ve seen a big change in her attitude level of aggressiveness in the past 2 weeks. She is not giving up on plays such that she may be playing midfield or stryker but will still stay with a player all the way back into the goal box.

    For reasons that I’ll get into some other time, that is a pretty big deal.

  29. Fabius Maximus says:

    #11#12 Clot

    Up to 7th and top of our CPL group and you’re still calling relegation?

    What I find really funny about your run so far is that the highest placed team you have managed to beat this year are the Mackems in 14th spot. So keep dreaming.

    By the way are you revisiting your last prediction on ManU.
    “Will admit the Man U fixture is a bit problematic.”

  30. Fabius Maximus says:

    #114 Nom (previous thread)

    The comarision comes from a team that sold their best player to their biggest opposition and then choked a 12 point lead over them the following season.

    This is a link that should give you an idea on how your new team are viewed by the rest of the league.

  31. scribe says:

    good night, NJ

  32. Happy Renter says:

    “[A]ll we are saying is that the flooding is bad, but not as bad as some might try to make us believe.” — Barclays Capital

  33. NWNJHighlander says:

    Pompton Lakes had a 17 to 19 month supply of housing on the MLS, it has something like 110 months including all the foreclosures.

    The town has been overbuilt since the 1930’s, that is, most of the low lying R/E in the town built since 1930 was built in the known flood plain.

    Because the home owners are lower income, the insurance companies are denying claims. There is going to be tear downs. At the moment everything is just stalled, .

    Heartbreaking stories in that town, I was in Pompton Lakes most of the week after the hurricane hit, several WWII vets on fixed pensions lost everything, one of them told me the flooding was worse than ’84(?) (Hurricane David?), and he couldn’t believe how fast the water rose. I’ve toured some of the houses flooded, it’s freaking stunning, the river silt is 2 to 3.5 feet deep in the basements, the houses shifted off foundations, etc.

    Pompton Lakes will be a minority ghetto in the next decade, will look like any of the old mill towns in CT/MA that are now Hispanic-American majority.

  34. Confused in NJ says:

    Seeing the flooding from Irene & Lee, in certain areas is really sad. Those houses are virtually worthless.

  35. rhum says:

    pretty cool! interesting blog. what made you come up with this idea?
    brampton homes for sale

  36. Happy to end up being going to your site once again, it’s been days for me personally. Well, this is the article which Ive already been anxiously waited for such a long time. Many thanks,

  37. rsswucpsqir says:

    D22FKv , [url=http://dzbqxhhcnicc.com/]dzbqxhhcnicc[/url], [link=http://dphnjbjpfetg.com/]dphnjbjpfetg[/link], http://aeojfmnmdsfj.com/

  38. Mack says:

    It is usually difficult to get educated people on that issue, however you sound like you know what you are sharing! Cheers

  39. What did you use to design your comment? It’s really awesome can you send me an email and let me know?

Comments are closed.