From the Record:
Lower prices attract buyers, boosting spring market
Tired of renting, Charles Carozza and his fiancée, Christina Trause, recently bought a Fair Lawn Cape Cod for $305,000 — well below the $400,000 they think the house would have fetched at the market peak.
“If you can, now is totally the time to buy,” said Carozza, who recruits doctors to do exams in legal cases.
A lot of buyers apparently agree with him. This year’s spring market in North Jersey was the most active in several years, suggesting that a recovery in housing may finally be taking hold. The number of single-family sales rose 12.2 percent in Bergen County and 7.9 percent in Passaic County from January through May, compared with the period last year. The trend is stronger in Bergen because its proximity to New York and its highly regarded school systems make it a more desirable location, experts say.
But activity remains well below levels during the housing boom, with Bergen County sales volume down almost 20 percent from 2006, according to the New Jersey Multiple Listing Service. And prices continued to slide — 6 percent in Bergen and 2.8 percent in Passaic, compared with the first five months of 2011.
“The volume of transactions is way up,” said real estate agent Marilyn Nuber of Keller Williams Village Square Realty in Ridgewood. “Prices are not way up, though.”
…
“It’s the lower prices, really,” said Arlene Cabrera, an agent with Whitley Real Estate in New Milford. “We haven’t seen prices this low in a very long time.”Home values have come down 27 percent in the New York metropolitan area, compared with their peaks in 2006, according to the Standard & Poor’s/Case-Shiller home price index. (New Jersey MLS numbers show a similar drop for Bergen County.)
…
But a number of North Jersey real estate agents say they saw more multiple bids this spring than they have in several years.“I have taken three listings in the last month, and they all have experienced bidding wars,” said Kathleen Falco, a Re/Max agent in Franklin Lakes.
…
Andrew and Sheila Guarino have accepted that reality. The couple bought their five-bedroom Ridgewood colonial at the market’s peak in 2007, paying $2.56 million and putting in another $600,000 of renovations. Now that two of their three children have gone off to college, they want to downsize and cut their home maintenance costs, as well as property taxes of more than $49,000.They have the house on the market for $2.5 million, and are resigned to taking a loss.
“It’s difficult, but you have to make a practical decision,” said Andrew Guarino, who owns a fire alarm service company in New York City. “We just don’t need all that space. … We wanted to have our dream house, we’ve had it, and now we realize what that entails.”
The Guarinos aren’t tempted to hold on till prices rebound, since they figure that could take several years. “I don’t believe in playing the market in real estate,” Andrew Guarino said.
Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide, agreed that despite the uptick in activity, sellers must keep their prices competitive to attract buyers “because there are no lenders that will allow you to buy more house than you can afford.”
Hey Charles, long time no see, congrats on the engagement and the house!
Good Morning New Jersey
“The volume of transactions is way up,” said real estate agent Marilyn Nuber of Keller Williams Village Square Realty in Ridgewood. “Prices are not way up, though.”
…
“It’s the lower prices, really,” said Arlene Cabrera, an agent with Whitley Real Estate in New Milford. “We haven’t seen prices this low in a very long time.”
Since the inception of this blog, it’s been repeated over and over: It’s all about price!
grim,
un-mod me!
Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide, agreed that despite the uptick in activity, sellers must keep their prices competitive to attract buyers “because there are no lenders that will allow you to buy more house than you can afford.”
Any questions? B1tch?
grim,
This might be a lead topic for your next thread:
“Hardship grows amid wealth: Residents face unexpected need in communities across North Jersey”
http://www.northjersey.com/news/Poverty_touches_more_households_in_North_Jersey.html
And prices continued to slide — 6 percent in Bergen and 2.8 percent in Passaic, compared with the first five months of 2011.
We’re down 27% from the peak and the 30 year fixed is hovering around 4%. If you don’t see an increase in activity based on these factors, then you never will. But, the 800 pound gorilla is still the property taxes and you almost never the house tour cheerleaders talking about it. Top it off WHEN the 30 year fixed starts rising and you have 40 years walking around in no-mans land.
“Best spring market in years,” is that like the least dead person in the graveyard?
http://www.huffingtonpost.com/2012/06/21/10-states-with-the-highes_n_1615488.html?ncid=edlinkusaolp00000003
http://www.nj.com/news/index.ssf/2012/06/state_trooper_pumped_7k_of_gas.html
State trooper steals from taxpayers . Gets pension anyway . Only in NJ
State trooper steals from taxpayers . Gets
pensionto steal from taxpayers anyway . Only in NJ and Illinois, and California, and …#3 Fast: And ;ets not forget property taxes which impact price.
Soeey gary did nto see your other post. No need for me to remind you on property taxes.
Sorry. not sooey.
Someone just sent me this. It seems to about sum up the Obama Administration:
http://sphotos.xx.fbcdn.net/hphotos-snc6/s480x480/168796_10150986218518288_1788701518_n.jpg
freedy 10 Was caught stealing now gets a $1000 a week for life at 47, can I steal some gas and win that lottery!
“…[T]he supply of values is equated to the gross national product, which is the economy’s entire output of current goods and services in a given time. This is a mistake and a serious one. Gross national product is obviously important, but it is by no means the entire supply of real values available for money purchase. To assume so is to disregard all of the existing capital wealth of the nation.
A man who has money in hand and has decided to spend it has two principal kinds of things he can spend it on. One kind of things, but only one, consists of current goods and services, the national product. The second kind things consists of all existing property, including land and buildings, used goods, productive plant and equipment, and all sorts of paper property such as stocks, bonds, mortgages, savings accounts, insurance, and commercial paper. …
… The significance of all this is that the use of money in capital markets is a principal repository of inflationary potential. Monetary inflation invariably makes itself felt first in capital markets, most conspicuously as a stock market boom. Prices of national product remain temporarily steady while stock prices rise and interest rates fall. This happened at the commencement of the American inflationary boom from 1962 to 1966. Indeed, every monetary expansion in the United States since World War II was followed by a stock market rise, every cessation of monetary expansion by a stock market fall. Conversely, every stock market rise was preceded and accompanied by money inflation. Bull markets rest on nothing but inflation. The market fall following tight money merely brings the market back to its real-value level. …
… In due time, there being no dam between the markets, a leakage of excess money demand back from capital markets into national product will occur. There will always be that spoilsport in the capital casino who will take his winnings and buy national product with them. There will always be that footslogger selling national product who senses that there is surplus money demand over yonder among the capitalists and demand some of it by raising prices. It is inevitable.”
from Dying of Money: Lessons of the Great German and American Inflations by Jens O. Parsson.
Published in 1974
http://dyingofmoney.com/Home_Page.php
expat [17]
Well, economic events since 1974 hadn’t exactly supported Mr. Parsson’s theory.
Let me throw some gasoline onto the fire here (some pun intended): how is the work of Mr. Guarino so valuable that he can afford a $2.5 M house? Fire alarm maintenance is not an innovative business, and demand is based on the govt regulations (so there are only so many field jobs that are needed at any given time, and competition is a zero sum game)… so him being a “job creator” means that a given job opens at his outfit rather than someone else’s; since he clearly doesn’t shortchange himself, to place a winning bid he likely pays less to his employees, or bribes the officials. Please tell me how taxing his (probably $1M+) income at a higher rate will affect the job creation…
Things like this made the Muslim Brotherhood candidate elected the president of Egypt… [And I don’t mean anyone converting to Islam here]
[18] cobbler – I’d say events since 1974 fully support his theory. If I buy your used house or your used car from you those are both purchases in the capital markets. If I buy a new house or a new car those are purchases of national product. What’s troubling the Fed right now is that they are infusing the capital markets quite effectively, but (used) housing refuses to go along for the ride, it simply was and is too highly levered and thusly cannot rise. If the Fed stops injecting, all capital markets, including housing, will promptly fall rendering all the big banks insolvent(which they mostly are anyway). We spend lots of time talking about under water home occupiers, but it’s really the banks that are the true under water home owners.
Do you think this modern day contrarian is all wrong too? He’s predicting imminent recession *and* the US being a worse Japan in 20 years:
http://www.youtube.com/watch?v=1CLhqjOzoyE
Well, economic events since 1974 hadn’t exactly supported Mr. Parsson’s theory.
[15] Shore – Someone cropped out the flowers. Try this one:
http://canwebelieveit.com/2011/10/27/cmon-baby-gimme-one-more-chance/
Someone just sent me this. It seems to about sum up the Obama Administration:
[21] Don’t miss the caption of that pic:
“The fact that we are here today to debate raising America ‘s debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America ‘s debt weakens us domestically and internationally.
Leadership means that, “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
~ Senator Barack H. Obama, March 2006
Expat [20]
Housing for a while had been assumed to have a dual value – as a place to live and as an investment. Arguably, recent events had proven that the investment part is non-existent long-term. As a place to live, residential RE on average should be priced at a rental value, probably minus some tad to compensate for the inconvenience related to the reduced mobility. Bubble developed for the whole set of reasons, the biggest of which as you correctly note was the over-abundance of idle capital (which in turn came from the financialization of the economy and globalization – which on one hand reduced the possibility to invest into any productive assets in these parts, and on the other hand increased the desired ROI). Now that the bubble is blown, RE is not treated as an investment (except for the rental housing), so nobody should expect it to be directly sensitive to the capital injections into the economy. If the UE improves and the incomes grow, RE demand will increase the same way as the demand for all other goods and services.
expat [22]
For some reason, lots of people when looking at Keynesianism grab only one half of it and then are obviously unhappy with what they end up with. The original idea was for the state to borrow money and inject it into the economy during the recessions/slowdowns, and to run substantial surpluses during the “fat years” of prosperity, so that on average you get deficit-neutral. 2006 was a prime year to run a huge budget surplus (had Clinton tax rates stayed in place, and Medicare D not enacted, even with the 2 wars there’d be >$500B surplus).
Ex: I am very focused on the fact that Shore posted the pic, because I consider him a credible source for a critique, but the website you reference states that O should be impeached….so despite some interesting information, that site speaks to me as more polarizing poltical crap…
…..and I always get surprised by the level of venom I see and how it is so shocking to me….it is not clear whether it is a sign of the times (internet / fcuked up media) or just simple racism…..
Chifi,
Just for the record, I did not know the original source of the image. It just struck me as a clever summary of the Obama campaign. I for one am not for impeaching Obama, just kicking his @sss out of the White House through the ballot box; I figured he would have to stand head and shoulders above Bush but, it has not turned out that way. Twelve consecutive years of poorly-performing presidents is long enough.
“surprised by the level of venom ”
This is something that I deeply dislike. as I said the other day, the CHICOMs are our enemies, AQAP is our enemy, Democrats are not my enemy. I may stand squarely against many, or even most, of their policy objectives, and I may find serious fault with their political platform. That said, my own countrymen, no matter how misguided (well setting aside the Tim McVeigh’s and his ilk) are not my enemy. We have a big enough target on us as it is from real enemies, we don’t need to create internal enemies.
In large measure, it is the viciousness of American political campaigns that prevents me from throwing my hat into the ring. I don’t need the job, it is something I would do out of patriotism and a desire to serve and make things better. Sadly, the sausage machine is designed to chew up people like me who, if elected in sufficient numbers could actually help move the nation back from the brink.
Perhaps we are getting the congress that we deserve.
[25] chifi – You’re reading way too much into my inadvertent choice of link. I don’t know anything about that site. I was just amused by the picture so I Googled c’mon baby gimme one more chance and that site came up on top of the search. I just happened to read the caption and thought it was noteworthy. I did, however, do DD on the quote to see if it was accurate before posting it.
Ex: I am very focused on the fact that Shore posted the pic, because I consider him a credible source for a critique, but the website you reference states that O should be impeached
[24] cobbler,
As the punchline goes, “assume you have a can opener”.
Nice in theory but economists always assume a rational electorate and politicians. Experience dictates otherwise.
Freaking Cassano. Is point shaving or something?
While researching the 2006 BO quote, I did happen on this video which I found very entertaining:
http://www.youtube.com/watch?v=Li0no7O9zmE
[24] cobbler – It’s also overlooked that Keynes wasn’t, as far as I know, talking about fiat. A government prudently borrowing, spending real money is a far cry from “Print and Spend”.
[29] For the benefit of other dumb-as-a-post types like myself who didn’t know the can opener reference:
” A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, “Let’s smash the can open with a rock.” The chemist says, “Let’s build a fire and heat the can first.” The economist says, “Let’s assume that we have a can-opener…” ”
The reference comes from the stereotype that many economic models require unrealistic or absurd assumptions in order to obtain results. The phrase is often used by economists to describe research that has particularly unusual or unrealistic assumptions (by the standards of modern economic research).
The bot may be onto something, maybe we need klonopin to cure our Restless FED Syndrome.
Then there is this famous last line ”So the bear says, “You didn’t really come here to hunt, did you?” “
[34] expat,
Sorry, thought that joke had been used here before. It’s pretty esoteric—I heard it as an undergrad from an economy major. I got it but didnt appreciate it at the time.
Economics, freaking android
[37] shadow,
Then the turkey says, “well, at $18 a beer, I’m not surprised.”
[38] Nom – No worries. Every day I that I learn something new is material evidence supporting the case that I still might belong on the green side of the grass. Death panels coming, and all.
Two polar bears are sitting in a bathtub. The first one says, “Pass the soap.” The second one says, “No soap, radio!”
nom [29]
Lowering taxes after 9/11 had been insane budget-wise, and the voters didn’t demand this reduction. It was pure ideology.
My wife just told me something that shocked me. In Glen Rock, they didn’t educate special needs kids, they all got bussed out of town. We were talking about school busses and she said her town didn’t have any. I couldn’t believe that, nobody took a school bus? “Yes, except for Charlie across the street. But that didn’t count. They weren’t Glen Rock School busses.” As I quizzed her further, she volunteered, “They didn’t go to our schools, but we played with them over the summer.” Now, that’s blue-ribbony, right?
Shore / Ex: O has totally whiffed, so he needs to get kicked out, but I disappoint myself that I am not more well versed in political current events so I can build credible fact-based argument to others as to why O is crud versus just sensing it by the commentary of sources I trust….
I hope O wins. Go.d forbid we get a repeat of the republican led federal government we had during the shrub’s reign.
Whatever. Opposite sides of the same coin. Anti-incumbent in every election is the best we can do when no real candidates emerge.
Just throw out all incumbents until some favorable critical mass forms.
Soliciting opinions on Outer Banks vacation. Seems like you get a lot more bank for your buck than good ole LBI, etc. provided you don’t pick a hurricane week :).
bang
We are big fans of Duck and Corolla.
One of the best things about the OBX is that one does not get nickled and dimed at every turn.
F*ck the Yankees.
[51] I saw some groupies after a Yankee game at Fenway trying to do exactly that.
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