From the Record:
Homeowners who’ve decided it’s (finally) time to sell
Henry and Rachel Kirk bought their two-bedroom Mahwah town house in 2005, not long before the housing bubble began to deflate. As their family expanded to include three children, they thought of trading up but couldn’t face the loss as housing values plummeted.
“We could never have put the place on the market back then,” Henry Kirk says.
A lot of homeowners felt the same way, choking off much of the supply of houses on the market in recent years. But that’s starting to change as home values have begun to recover. Prices are now about 19 percent below their 2006 peaks in the New York metro area, an improvement over the 27 percent drop they hit in the depths of the housing bust. That’s led more homeowners, including the Kirks, to put their properties up for sale.
According to Fannie Mae’s Monthly National Housing Survey, 40 percent of those polled in February said it’s a good time to sell, up from 34 percent a year earlier. And the New Jersey Realtors recently reported that while inventories remain tight, new single-family listings in February jumped 16.4 percent in Bergen County and 17.9 percent in Passaic.
With these signs that homeowners are more willing to sell as the spring buying season gets under way, The Record talked to three sellers who recently listed their homes.
…
Sam Horowitz and Kelly McCormick bought their home, a Westwood colonial, in 2005. They loved the house and neighborhood, an easy walk to a playground, school and Westwood’s lively shopping district.But they recently put it on the market so they could move to Morris County because both their jobs — he’s a commercial real estate broker, she’s a project manager for an engineering company — have relocated there.
Recognizing the reality of the market, they set a listing price of $389,000, even though they paid $455,000.
“Anytime you’re not getting out what you put in, you’re disappointed,” says Horowitz, who’s in his late thirties. “But we’ve lived in the house for almost a full decade, and the house was terrific for us that entire time. I also understand that every financial situation is not going to work out ideally.”
…
Nancy and Steven Brillo of Wayne sold their house gradually — then all at once.They had bought the Cape Cod for $315,000 in 2002, after falling in love with the Packanack Lake neighborhood.
“I cannot tell you how much we love living here. Packanack is a great community,” says Nancy Brillo, who works in education, testing children with special needs.
But once the couple had two sons — now 8 and 10 — the house began feeling too small.
“There’s one bathroom for the four of us,” Brillo, 39, says. “We couldn’t take it anymore.”
They began looking for a bigger place about two years ago, but their choices were limited because they were determined to stay in Packanack Lake. They put their house on the market several times over the past two years, and got three offers. But those deals fell apart because the Brillos couldn’t find the right house nearby.
To flush out sellers, they put letters in mailboxes around the neighborhood — and hit pay dirt with a ranch house around the block. The owners weren’t ready to sell yet, but said they would be in a year or two.
“My husband and I knew this was the house,” Brillo says. “We were in love with this house.”
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I’ve been saying the same thing as this article for years now. It’s really nothing new. We had to cancel a deal because we couldn’t find a house and there’s an ocean of f.ucked bag holders stuck in their sh1tholes they bought during the peak years. And what’s the difference between being 27% underwater or 19% underwater? Does it hurt any less? If the couple above bought for 455K and is currently listing at 389K a DECADE LATER, what does that tell you about the m0rons that paid 700K in mid 2000s? F.uck you, pay me.
Recognizing the reality of the market, they set a listing price of $389,000, even though they paid $455,000.
“Anytime you’re not getting out what you put in, you’re disappointed,” says Horowitz, who’s in his late thirties. “But we’ve lived in the house for almost a full decade, and the house was terrific for us that entire time. I also understand that every financial situation is not going to work out ideally.”
Gee, great deduction, D1ck Tracy! When it’s all said and done, you’re going to be 100K poorer. You were losing $833 per month over 10 years. Nice financial move!
To flush out sellers, they put letters in mailboxes around the neighborhood — and hit pay dirt with a ranch house around the block. The owners weren’t ready to sell yet, but said they would be in a year or two.
Yeah, we heard the same thing. A few years later, they still weren’t ready to sell. Don’t hold your breathe, sweetie. Talk is cheap; just like when a house agent says there’s a lot of interest in the house and it will go fast. Sure. The prices are warranted, they never go down here, they’re not building any more land and it’s contained to subprime, too.
I bought my place from some sad 2006-era buyers who folded at $150K less than they paid after sitting overvalued on the market for several months. On the other hand, there were bidding wars on every property at the time. An overpriced home is a nice opportunity to make a deal of your choosing without the realtor screaming “THREE OTHER BIDDERS” in your ear.
Same situation as fast Eddie, but these people have done what we told fast Eddie to do. Pick a location and start working. Can’t keep looking at stale listings and expect to find a house. Get a good agent for that location and start sending letters.
“They began looking for a bigger place about two years ago, but their choices were limited because they were determined to stay in Packanack Lake. They put their house on the market several times over the past two years, and got three offers. But those deals fell apart because the Brillos couldn’t find the right house nearby.
To flush out sellers, they put letters in mailboxes around the neighborhood — and hit pay dirt with a ranch house around the block. The owners weren’t ready to sell yet, but said they would be in a year or two.
“My husband and I knew this was the house,” Brillo says. “We were in love with this house.””
Best buys are:
1) overpriced homes of idiot bagholders
2) garden variety shitboxes
Get a good agent for that location and start sending letters.
Read this statement and convince yourself you’re not getting punked by a troll.
As dumb as they were for buying during the bubble, the financial impact post-sale was relatively minor.
Even considering interest and property taxes. Compare it to the equivalent rent for a decade. Yeah, probably hurts to not get the big payday you were hoping for, but hardly armageddon.
I’m not a troll. Im being serious. You have to work extremely hard to get a nice home at a good price in this market. There is a ton of competition for these houses. You have to work harder than your competition, if that means going door to door, constantly sending letters, so be it. Right now, you have been getting slaughtered in this competition, so much so, that you have given up. This market isn’t for the lazy or for those with the lack of motivation to get it done. I’m not saying you are either of these, but this is what it takes to get it done. You need to know what you want, where you want it, and must bring your check and act quick. In this market, there is no thinking about it, it will be gone if it’s good.
Fast Eddie says:
March 22, 2015 at 9:00 am
Get a good agent for that location and start sending letters.
Read this statement and convince yourself you’re not getting punked by a troll.
Yup, you have to live somewhere. Hurts that you didn’t buy a home and make money off of it, but that’s the nature of the game. These people who lost out after 10 years did nothing more than pay rent to the previous owner. They didn’t really lose to the magnitude that some people think. Yes, they are a bag holder, but aren’t all renters bag holders? So if they didn’t buy the house, they would have had to rent. So what is the difference? Lose 100,000 on a house over 10 years, or lose rent over 10 years. 2,000 a month rent for a home (cheap) for 12 months is 24,000. 24,000 over 10 years comes out to 240,000. I don’t see the big deal if they lost out buying in 2005, they have to live somewhere, and unfortunately it costs to live somewhere, whether you are buying or renting. Renting, you are always paying more because the owner needs to profit. So I would rather own.
grim says:
March 22, 2015 at 9:16 am
Even considering interest and property taxes. Compare it to the equivalent rent for a decade. Yeah, probably hurts to not get the big payday you were hoping for, but hardly armageddon.
1- grim, that’s a cool article. Thanks for sharing it.
This is a good thing. Child labor on the decline means wage inflation will surely come if this keeps up. The pool of cheap labor that capital can exploit is getting smaller and smaller. Great to see a positive article. Really shows why this stock market rally might only be in its infancy. Market might rage to 2030, imo.
“ILO
Child labor is on the decline
Any amount of child labor is too much child labor, and the pace at which it’s being reduced is not fast enough to meet the International Labor Organization’s goal of eliminating hazardous child work by 2016. But the rate of decline — one-third reduction from 2000 to 2012 — is nontrivial and worth celebrating”
This is proof of how powerful the U.S. really is. There has not been a major war since 1945(wwII) exactly when the U.S. became the world’s most powerful nation. When was the last time that the world has not seen powerful nations at war for this long of a period of time? Thank you, USA!!!
This period of peace and stability also provides the means for the economy to do well. This is why the stock market can go on an unbelievable run in the next 15 years.
America is in a strong position right now. Low energy costs to go along with a bunch of new energy reserves, combined with the highest proportion of educated individuals the world has ever witnessed, along with insane food production, and advances in technology, along with almost no wars, means that we are about to go on the biggest economic party this world has ever seen.
“War is on the decline
Less than a century removed from the World Wars, it can be hard for people to believe war is on the decline. But in the long run, deaths from organized political violence are falling, as Steven Pinker’s The Better Angels of Our Nature details. “The rate of documented direct deaths from political violence (war, terrorism, genocide and warlord militias) in the past decade is an unprecedented few hundredths of a percentage point,” Pinker wrote in an excerpt in the Wall Street Journal.
It’s not just Pinker, either: analysts like John Mueller, Joshua Goldstein, and John Horgan have persuasively argued that the end of war is in sight. “War is merely an idea,” Mueller writes. “Unlike breathing, eating, or sex, war is not something that is somehow required by the human condition or by the forces of history. Accordingly, war can shrivel up and disappear, and it seems to be in the process of doing so.””
I also forgot to factor in that those people selling their house and taking a loss, are now buying a cheaper property. These bag holders are not in such bad shape as some people make it sound. The only true bag holders are renters. Homeowners can always hold till the market improves and not experience any loss, can a renter do the same?
The Great Pumpkin says:
March 22, 2015 at 9:39 am
Yup, you have to live somewhere. Hurts that you didn’t buy a home and make money off of it, but that’s the nature of the game. These people who lost out after 10 years did nothing more than pay rent to the previous owner. They didn’t really lose to the magnitude that some people think. Yes, they are a bag holder, but aren’t all renters bag holders? So if they didn’t buy the house, they would have had to rent. So what is the difference? Lose 100,000 on a house over 10 years, or lose rent over 10 years. 2,000 a month rent for a home (cheap) for 12 months is 24,000. 24,000 over 10 years comes out to 240,000. I don’t see the big deal if they lost out buying in 2005, they have to live somewhere, and unfortunately it costs to live somewhere, whether you are buying or renting. Renting, you are always paying more because the owner needs to profit. So I would rather own.
grim says:
March 22, 2015 at 9:16 am
Even considering interest and property taxes. Compare it to the equivalent rent for a decade. Yeah, probably hurts to not get the big payday you were hoping for, but hardly armageddon.
In reference to getting the word out with a letter to be more aggresive, I’ve seen this work once where a couple heard by word of mouth a gentleman was retiring and moving to Florida and gave them first shot at purchasing in which they did.
#11 Pumpkin
” In this market, there is no thinking about it, it will be gone if it’s good.”
Amen.
In my neck of the woods comparable houses that are priced around 30% less than those that have been sitting for months sell in days or at most a week. No consistent type of buyer, though. Everything from DINKS to retired folk (I wouldn’t want to retire here actually, I’m gone as soon as the kids are on their own but some people just have to have their ‘dream home’ before they die…I guess).
BTW – I have a attorney friend that specializes in real estate closings so…
The only way I got the one I’m in now for a great price was because a Realtor friend told me the owner was considering selling soon so I walked by EVERY DAY and when the sign went up I was there. First in (without realtor, then he came over). Made the offer and it was taken on the spot. Smart old widow that would rather spend her last years sipping a margarita on the beach in Florida.
I also forgot to factor in that those people selling their house and taking a loss, are now buying a cheaper property. These bag holders are not in such bad shape as some people make it sound. The only true bag holders are renters. Homeowners can always hold till the market improves and not experience any loss, can a renter do the same?
You also forgot to mention upkeep costs and property taxes. Why do you assume people renting are renting a home for $2000?
When I turned 21, I was renting an apartment for $600 a month. When I got married at 28, we rented an apartment for $1100 a month. When I had my kid at 32, I was renting a townhome for $1600 a month. I bought a home last year 40% down, and mortgage/taxes run me $2300 a month. Had I bought this home in 2005, mortgage/taxes would have run me $2900 a month. I chose to live in smaller places and buy a nice home after the fact. On an cash basis, I paid on the order of $15k to $20k per year less renting for over 10 years. Christ…had I not had a kid, I would have kept up the gig and my wife and I would have bought the house for full in cash in another 5 years.
@davidwchen: Camden NJ developer, asked by @AP about unpaid loans, says: “Your job is not to ask me any questions” http://t.co/LfM5JTo1I5
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Luis Ruiz, Antonio Arroyo
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CAMDEN, N.J. (AP) — State tax incentives to boost New Jersey’s poorest city are being heralded as a major piece of a turnaround plan after decades of economic despair, corruption and crime. But after a string of revitalization efforts with dubious results, Camden is staking part of its future on a company that failed to deliver on past promises.
Roizman Development, Inc., a Pennsylvania firm headed by a big-time political donor, is receiving millions from two New Jersey agencies to renovate low-income housing it has owned for decades despite owing more than $6 million on a previous unpaid state government loan. The firm also backed out of a pledge to sell other homes he owns in Camden to tenants for $1.
The company’s latest project comes with a hefty price tag: The deal, mostly funded by government loans or subsidies, works out to $324,000 per home, four times the cost of a typical one for sale in Camden.
Company president Israel Roizman, who is receiving a $7.6 million developer’s fee in the deal, refused to answer questions about it. He also did not respond to an email with detailed questions.
Camden, a former industrial dynamo across the Delaware River from Philadelphia, is now a city of 77,000 where nearly 40 percent of residents live in poverty, one-third of adults lack high school degrees, and there’s virtually no middle class.
Under Gov. Chris Christie, a Republican who may be preparing to run for president and who visits Camden often, the state has taken control of the schools, the county government has taken over policing the city, and the state is using generous tax credits to try to persuade businesses to move in.
Roizman was the first developer to take advantage of incentives aimed at creating low-income housing in the city under the state’s 2013 Economic Opportunity Act.
The $57 million deal to renovate 175 homes is funded by a mix of federal tax credits, a federal loan and a $26 million state construction loan. The project includes state tax credits that were approved last year for up to $13.4 million over 10 years.
The loans will be repaid from rent — $946 for a two-bedroom unit and $1,348 on a three-bedroom — that is subsidized and guaranteed by the federal Section 8 housing program.
The deal troubles Kelly Francis, president of the Camden branch of the NAACP, who questioned why the government is shelling out so much for privately owned housing.
“You’ve owned property for 20 years,” he said, “Why would you need $100,000” — the rough cost for each home’s renovation — “when you are responsible for maintaining that property?”
Without those subsidies developers might not provide homes for low-income people, said Marc Pfeifer, assistant director of the Bloustein Local Government Research Center at Rutgers University and a consultant on parts of the Economic Opportunity Act.
“With the costs of housing, some subsidies are necessary,” Pfeifer said. “Engaging the private sector seems to be a good approach that complements publicly owned and operated housing.”
Roizman, who owns affordable housing developments from Buffalo, New York, to Fort Lauderdale, Florida, has contributed $800,000 to federal candidates and political action committees over the years and nearly $100,000 to New Jersey campaigns. While he has supported mostly Democrats, Roizman also contributed to Republican causes — including $10,000 to the Republican Governors Association in October 2013, just before Christie became its chairman, and another $10,000 last year when Christie was at the helm.
Roizman bought more than 250 properties scattered around an area south of downtown Camden in the late 1980s and early 1990s, renovated them with the help of publicly financed loans and rented them with government subsidies.
In a loan agreement with the New Jersey Home Mortgage Finance Agency, he said he planned to sell some of them, which he called the Camden Townhouses, for $1 each to the tenants after 15 years.
“Everybody is screaming that low-income people cannot afford to own their own home,” Roizman told The Philadelphia Inquirer in 1992. “Here is a way for them to own their own home with the help of the state and private investors. That’s what makes this project special.”
But when the 15-year mark arrived, the sales didn’t happen. Some tenants sued and a federal judge ruled in 2012 the promise was not a contract and the company could not be bound to it.
John Murray, director of multifamily lending the New Jersey Housing and Mortgage Finance Agency, said the Camden Townhouses ran into problems after the initial 15-year Section 8 contract on them expired. When that happened, the residents were given vouchers for housing that they could use elsewhere. Many moved.
Roizman’s company had to reduce rents to attract new tenants who were not using subsidies, and that hurt the project’s bottom line just as a $2 million balloon payment was due, Murray said. The payment was not made, and the state said Roizman also owes more than $4 million in interest on it.
“The agency is continuing to work with Mr. Roizman on an equitable work-out and/or settlement to resolve this delinquency situation,” spokeswoman Tammori Petty said in an email.
She would not say whether the company was current on a previous mortgage on the group of properties that is receiving the makeover, the Broadway Townhouses; $14.6 million in liens also were rolled into the financing for the new deal, according to an Economic Development Authority memo.
Those liens are far more than the appraised value of the homes, which was around $9 million before the renovations.
Reached by phone, Roizman would not answer questions about the deal.
“I’m developing 175 units of housing in Camden. You have a problem with that, go speak to somebody else, not me,” he said. “Your job is not to ask me any questions.”
Timothy Lizura, chief operating officer and president of the EDA, said the deal is justifiable. He said his agency did not find any problems with Roizman, and said that the latest housing rehabilitations are being done under a different business entity than the previous ones.
“When you’re redeveloping an area,” Lizura said, “you need to have modern housing stock that is available and suitable to all income levels.”
Residents of some of the Roizman homes said the management company is responsive if not perfect, and several moved to another property for a few months so workers could overhaul the homes. They came back to new tile floors, wiring, furnaces, windows and kitchens, among other changes.
“It’s nice now. Before, no good,” said Eddie Martinez. “Before, a lot of rats.”
Your tax dollars at work.
You also forgot to mention upkeep costs and property taxes. Why do you assume people renting are renting a home for $2000?
Because it’s the roughly the equivalent. Why would you make anything other than a like for like comparison?
Because I’ve never seen anyone my age rent a house comparable to the one they buy. They always rent an apartment/condo or rent very small town home.
He’s using an equivalent rent metric to conclude that its always the best decision to buy and never to rent. You have a ton of options when renting that he’s completely discounting. And, lets be honest, the types houses most people are looking to but aren’t available for rent.
If it was between renting my current home and buying my current home, of course I am buying. But it was never between that.
When the 13-Year-Old Picks a $14 Million Condo
A year and a half ago, Skye van Merkensteijn was shooting hoops with a friend who lives at the Aldyn, a condominium-rental hybrid on Riverside Boulevard with its own indoor basketball court, climbing wall and bowling alley.
Thirteen-year-old Skye was impressed — and envious. Well, his worldly pal told him, he just happened to know of an apartment for sale on the 21st floor.
Skye went home, jumped online and called up a video of the property in question — a 12-room spread with a hot tub and private 37-by-15-foot outdoor pool.
“When my husband, John, came home,” said Skye’s mother, Elizabeth van Merkensteijn, “Skye announced: ‘We’re moving and this is the place we’re moving to.’ ”
Mr. van Merkensteijn, an investor, told his son he couldn’t afford a $14 million apartment. As for Mrs. van Merkensteijn, if you wanted her to leave the family’s eight-room apartment at the Beresford on Central Park West, she said, you were going to have to carry her out. In a box.
Still, for a lark the couple strolled over to check out their son’s find, which, in addition to the pool and an expansive terrace, had bedazzling views of the Hudson and the Palisades. “We looked at each other and said, ‘This is unbelievable,’ ” Mrs. van Merkensteijn recalled. “The idea that you could own a place like this in New York City was amazing.”
Skye came along to the closing a few months later.
In New York, teens and preteens are becoming savvy connoisseurs of real estate.
Perhaps it’s because they’re so utterly at home on the Internet. Perhaps it’s because they’re lured by online images of condo amenities like an indoor pool or a children’s playroom or because they’re fans of “Million Dollar Listing New York” on Bravo. Or maybe it’s because it’s become business as usual for children in certain precincts of Manhattan to participate in family decisions.
“They choose where they and their parents are going to have dinner or where they’re going to go on vacation,” said Stuart Moss, an associate broker at Corcoran. “So why shouldn’t it extend to where they’re going to spend several million dollars for a residence?”
http://www.nytimes.com/2015/03/22/realestate/when-new-york-kids-help-find-the-family-home.html?action=click&pgtype=Homepage&module=real-estate-left-region®ion=real-estate-left-region&WT.nav=real-estate-left-region&_r=0
I tell my kids: “When you’re 18 you can do whatever you want but you might not be able to live here”.
“…teens and preteens are becoming savvy connoisseurs of real estate.”
If they can figure out how pay for it themselves…GO! Maybe I can learn something!
http://www.nj.com/news/index.ssf/2015/03/solomon_dwek_at_center_of_federal_corruption_sting.html
Nice work, appreciate your work!!!
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