North Jersey continues to fall...

So what do you predict home prices in NJ will look like after the summer is over?

i don't really have a prediction. i was just posting the data. i have looked in northern jersey for a little while (6 months) and while I find that prices have indeed fallen in some areas the owners in the towns i am looking at have not gotten the memo. i think prices go lower.

because of the difficultites in getting a subprime loan, the number of high end houses that are selling has fallen significantly. As a result, the median prices is skewed downward. I would not rely on the numbers that much. Plus the numbers are being skewed downward since many houses that are selling are foreclosures. These houses often sell for a discount since they are in horrible shape. Some are literally nothing more than an empty shell.

oops, I should have written "because of the difficulties in getting a JUMBO loan.."

so what are you saying alpine? prices are not falling in north jersey?

From the NY Times:

Quantifying the drop in home prices in any market is difficult because they are a result of several factors. The homes that are selling now are often the smaller, less expensive homes, whereas a few years ago, when credit was easier to get and more people were confident about their jobs, they were buying larger homes. The average price of a home in any given community probably reflects not only a price decline, but that more smaller homes are selling while the largest homes languish on the market.
…
Otteau said comparing average prices from one year to the next does not always give a completely accurate picture of the market.

No, prices are falling, BUT they are not falling as much as the data says they are becasue there are several factors that have a major impact on it. Are prices in NJ falling? Yes. Are they falling as much as they are in CA or FL? No. Is NJ full of foreclosures? No.

Yes prices have further to go, think about it. Average taxes are 1500$ to 2500$ (essex county) a month alone. Now take a home thats selling in the 600,000 to 700,000 range, thats 3000$ to 4000$ nut. Add the taxes and your up to 6000$ a month. This does not include transportation and insurance etc. Sellers have to get real. If someone bought there house 8 years ago for 325,000$ and now expects 825,000$, that person is high to think that should make 500,000$ profit in 8 years. My wife and I plan to buy and offer realistic amount, and thats not lowballing its common sense. So all of you sellers out there, don't chase that market dow. Price accordingly, the Madoff era is over.

i haven never seen so much action on this side of the board!!! very exciting.

Zenpup - i agree but i have been looking for a while (Bergen since Oct.) and don't see that much movement on the price dropping. granted, I have been focused in a few areas and a few houses in particular but buyers are just not getting the drops we want yet (see tons of overpriced inventory as reference)

Sniper, My wife and I are scouting homes in south orange and maplewood(good commute, diverse community and good schools). We haven't seen any homes in person, I'm just trying a find a realistic broker and not one who seems to be taking loads of (delusional)prozac. We will make our first visit together in a couple of weeks. I don't plan to buy till sept-jan, the fiscal landscape will be much clearer then. To all sellers in essex NJ, employed people looking for homes are a commodity, expect 2% to 5% compounded return on your homes (thats if we're still employed).

"Yes prices have further to go, think about it. Average taxes are 1500$ to 2500$ (essex county) a month alone."

For which price range? I own in southern Bergen County and I pay just under $14,000 a year of rna $800k house. No offense, but if you can't afford the taxes, then you need to look at cheaper houses.

*for an $800k house."

"To all sellers in essex NJ, employed people looking for homes are a commodity, expect 2% to 5% compounded return on your homes (thats if we're still employed)."

Houses are not supposed to be a money making commodity. If a compounded return is that important, then I advise you to rent and buy stocks.

No offense taken. My wife and own an apartment in brooklyn with ten year tax abatement. Bergen county taxes are much less on average then essex (seems to me). 14k for 800k home sounds great. Yet that nut would make me feel a little uneasy if the economy gets worse. The moral of the financial meltdown is to have enough in the bank to cover my ass if all goes south. My wife and i have Professions not just jobs, and we would be looking for home that was appraised at 800$k and offer them 600$k. That the new normal in my book, i might be wrong but time will tell.

apline292, Houses are not supposed to be a money making commodity, I agree. Many people view them as one, so I'm just putting my offer in semantics they will understand.

I advise you to rent and buy stocks. No way, equities are dead for the time being (where have u been Man).

I strongly doubt any seller of a house that is truly worth $800k will take an offer for $600k. If I was desperate to sell an $800k house and you made that offer to me, I would be better off dropping the price to $700k and wait for a better offer from a different buyer. A house near mine just sold this month. The asking was $769k and the selling price was $700k.

Please take into account my whole rational not just 1/4 of it. Come Sept-Jan a more realistic fiscal landscape will be at hand. If the fiscal landscape is up or just not further down then 800k$ with 14$k in taxes will be fine. If not then?????

I'm no economist, bit I think prices in north Jersey may be leveling off. Here is my rational: In my town (Cliffside Park) a developer recnelty constructed 2 large houses directly next door to each other. They are both the exact same house. In June of last year, house #1 sold for $998,000. And last February house #2 sold for $999,000. So if the market was truly declining as much as the "experts" say it is, the second house should have sold for LESS than the first one.

Oh, and if anyone wants to verify my data, the addresses of the houses are 430 Oncrest Terrace and 428 Oncrest Terrace. Look up the sales prices on Zillow.

Let Nevada, Florida and California be a lessen alpine292. I'm not a hater I'm just realistic.

those states have tons of more foreclosures than NJ does. They were subprime alley.

full disclousre:

zenpup - you should know that alpine is known on the NYC side of this posting board as someone who refused to admit there was any decline anywhere in the NE up until about 2 months ago. he is still very bullish and enjoys being contrarian. i went into contract on my nyc co-op back in feb. and i close in about a month. i am now a buyer or more likely a renter in bergen county or still in nyc.

I never said that there was no decline in NYC. Let's not make things up. In fact, I actually went after perfitz when he predicted that prices woudl INCREASE 10% this year.

I see a lot price adjustment downward, just look on weichert or street easy. The NY metro area will be known as wall streeters jobless alley, and it will effect home prices. Just wait till bonus time come Jan, sellers will get real then.

renting in Bergen County sucks. 99.9% of landlords there hate dogs.

i was just trying to give zen an idea of where each of us stood.

I also see lots of price adjustments, but usually on houses that were drastically overpriced to begin with. Houses that are well priced from the beginning don't cut that much. And prices are so complex that finding the right price can make my head explode. I had trouble finding a buyer for my modern $800k house, but on the other side of town where the houses have NYC views, the sellers there are able to get over $1 million for their TEARDOWNS! One teardown sold last fall for $2.5 million.

Sniper, Thanks for starting this post wish more peeps with better insight or new of some realistic sellers posted, alpine excluded. I'll post with my progress in the future. NJ will be an interesting adventure.
Later.

oh, so all of a sudden I'm not a realistic seller? Well, pardon me for telling you the truth. And the truth is that if a house is legitimately priced at $800k, your not going to buy it for $600k. If you could truly buy an $800k house for $600k, I would have done so already. I have the resources to buy a second house. But you know what? There are no $800k houses for $600k. In a best case scenario, you might get the $800k house for $700k.

keep us posted.

FYI - i have seen some major price drops in maplewood. i looked there at one point. one house in particular was a foreclosure and started at around $800K. last i saw it was $649K. it is a great tudor that definitely needed a major cleanup and was on corner of a main road but i loved a lot of things about it. i will try to post a link.

in Paramus, you can buy a $600k house for $400k. The house is a shell and the owner took everything of value before the bank repossessed it. And because of the condition of the house, the agent told me that no bank will finance a loan so all offers must be in cash.

Isn't Maplewood right next door to Newark? Be careful if you buy there. You don't want to be in the wrong part of town.

here it is:
http://www.jboyerhomes.com/idx/for-sale/2643591/details.html

I just started looking in NJ. I know nothing about the tax situation. Can you deduct some of your taxes if you make under a certain amount? Do you pay these taxes at the end of the year or every month? I know I sound completely ignorant but up until know I have been looking at places in NY that had tax abatements that were like 30 dollars. Now I'm looking at monthly taxes of hundreds of dollars.

EX: Price: $285,000
Maintenance/CC/HOA: $299
Property Tax: $782.78

Property taxes are typically paid every quarter.

This link should answer your questions about deductions. Currently the rebate is limited to only senior citizens.

Alpine292 there's no link, thanks

sorry about that:

http://www.state.nj.us/treasury/taxation/homestead/hrinfotemp.shtml

http://www.nj.com/news/index.ssf/2009/05/worst_year_for_nj_tax_collecti.html

What are people saying about Jersey City? Ar prices going up or down there? Is it worth waiting another year to buy in this area?

There is still a lot of inventory in Jersey City with Trump, Liberty Harbor, 77 Hudson, Crystal Point...with more rentals coming onto the market this summer, 70 Greene and Aquablu. They are having an auction at The Beacon. It wouldn't hurt waiting, at least until the Fall or Winter.

The Beacon is in an absolute ghetto. STAY AWAY form it.

Anonilicious, the place you mentioned are new developments. What about older developments and apt buildings? You think JC will hit bottom in the Fall or Winter?

obviously North Jersey is not falling enough...for anybody. when will it get the point?

Buying a home in Bergen still out of reach for many
Friday, June 12, 2009
BY KATHLEEN LYNN
NorthJersey.com
STAFF WRITER

Even with recent home price declines, buying a house in North Jersey — especially in Bergen County — remains out of reach for many working people, the New Jersey Association of Realtors said today.

With a median price of $481,250 in the third quarter of 2008, Bergen County is the most expensive home purchase market in the state, the trade association said. At a more affordable median of $352,900, Passaic comes in ninth of New Jersey’s 21 counties.

NJAR released this data in introducing its new Internet database, called Paycheck to Paycheck, which allows workers to compare the average salary in different occupations to the income needed to buy or rent a home in different counties. As you might expect, even middle-class workers such as teachers, nurses and police officers would be hard-pressed to buy a home in Bergen County. For example, nurses have average income of about $71,000, but an annual income of almost $156,000 is required to buy a house in Bergen, and $135,000 to buy a house in Passaic.

Rentals in North Jersey are also a stretch for many people, according to the database. Workers need an annual income of $50,240 to afford a two-bedroom apartment in Bergen or Passaic. That’s beyond the means of retail sales people or janitors, who make less than $30,000 a year on average.

The least expensive housing markets — Atlantic, Gloucester, Camden, Cumberland and Salem counties — are all in the southern part of the state.

To view the database, go to www.njar.com/paycheck2paycheck.

E-mail: lynn@northjersey.com
Even with recent home price declines, buying a house in North Jersey — especially in Bergen County — remains out of reach for many working people, the New Jersey Association of Realtors said today.

With a median price of $481,250 in the third quarter of 2008, Bergen County is the most expensive home purchase market in the state, the trade association said. At a more affordable median of $352,900, Passaic comes in ninth of New Jersey’s 21 counties.

NJAR released this data in introducing its new Internet database, called Paycheck to Paycheck, which allows workers to compare the average salary in different occupations to the income needed to buy or rent a home in different counties. As you might expect, even middle-class workers such as teachers, nurses and police officers would be hard-pressed to buy a home in Bergen County. For example, nurses have average income of about $71,000, but an annual income of almost $156,000 is required to buy a house in Bergen, and $135,000 to buy a house in Passaic.

Rentals in North Jersey are also a stretch for many people, according to the database. Workers need an annual income of $50,240 to afford a two-bedroom apartment in Bergen or Passaic. That’s beyond the means of retail sales people or janitors, who make less than $30,000 a year on average.

The least expensive housing markets — Atlantic, Gloucester, Camden, Cumberland and Salem counties — are all in the southern part of the state.

It will likely never get to that point. Housing in Bergen County has never been cheap.

i think this is a direct result of sellers refusing to meet the actual prices that the market will bear. until they do that, buyers will hold out.

It’s official, the spring market was a BUST!
Categories: Housing Bubble , National Real Estate
[97] Comments
From Reuters:

Spring U.S. housing market fell short-Coldwell CEO

This year’s peak home-buying season was lackluster, as buyers seeking to trade up to larger houses were absent, said the head of one of the country’s largest real estate firms.

Jim Gillespie, president and chief executive of Coldwell Banker Real Estate LLC, in an interview with Reuters, said sales were only modest during the spring, with demand overwhelmingly dominated by first-time home buyers and investors.

“The more important ‘move-up’ buyers were absent and that is not encouraging,” said Gillespie, who is based in Parsippany, New Jersey.

Move-up buyers are those seeking to trade in their current home for a larger one, and Gillespie said that group is important for sustaining a healthy real estate market. Because of the sharp decline in housing prices and the collapse in consumer demand, homeowners are having difficulty selling their current homes to move up to pricier properties.

“They are key to a U.S. housing market recovery,” he said.
…
Gillespie said market realities have come to bear as well. As government bond yields rose, mortgage rates have naturally followed. The 30-year fixed-rate mortgage averaged 5.38 percent for the week ending June 18, according to a survey released on Thursday by home funding company Freddie Mac.

That was down from the previous week’s 5.59 percent, which was the highest level since November, but up sharply from the record low of 4.78 percent set the week ending April 2.

“Many people got spoiled by mortgage rates at 5 percent and below,” he said.

“When the mortgage rate rose above 5 percent, it spooked many buyers who were already hesitant,” he said.

Sellers don't have to do anything. It's their houses. Buyers do not single handedly control the market. Most sellers have lowered their prices and at that point its the buyers who must accept the fact that they are not going to get a $1.2 million McMansion for $600,000. There are TONS of un-realsitic buyers out there and they need a reality check.

"Sellers don't have to do anything. It's their houses."

the point is that they no longer want it to be their house or they are in a position where they can no longer afford it as their house...therefore THEY put it up for sale. if they want to be "sellers" then they can remain "sellers" for a long time. if they want to be someone who actually SOLD then they are going to have to adjust to what the market will bear. and yes, buyers DO singlehandedly control the market. without them there IS NO MARKET. you can argue this point but i think you know you are doing it just for argument sake. no buyers, no market.

while there are some overpriced shoe shacks on the market, to say that ALL sellers need to lower their prices is jsut not true. There are many well priced houses on the market. I would estiamte that overpriced houses comprise less than 15% of the inventory. With that said, buyers need to have relaistic expectations. Buyers need to realize they are not going to get a 5,000 square foot house for $700k.

Here's an example of a well priced house. I saw it once at an open house:

http://www.njmls.com/cf/details.cfm?mls_number=2927234&id=999999

Now while there is no garage, the high end renovations and the in-ground pool make up for it. Plus, the house is right along the edge of the cliffs facing NYC, which is one of the best locations to be in. I personally do not see why this specific seller should have to lower their price.

when did you see it at open house? it says "new" but i know that could be bullshit.

they only have to lower the price if they want to sell - if no one is buying at this price, then it is not the right price, regardless of what you and i think. that is fact, not opinion. if someone grabs it at this price then it was the right price for someone. i am not looking to argue too much on this point. no matter how you or i feel, if there are no buyers at that price then they have to come down and meet the market at a price that someone thinks it is worth.

the house used to be on the market about a year ago at a higher price. So it is not completely new. As far as whether there are buyers for this house at this price, it is too early to tell. However, I have seen my fair share of tear downs sell for crazy prices in my hood, whether it be $1,180,000, $2 million, and even $2.5 million last fall right when Lehman collapsed (the buyer was a world famous cardio surgeon).

from the AP
(this guy actually says "bottom"" in there)

Northeast home sales, prices drop in May

Home sales in the Northeast declined more than 13 percent in May from year-ago levels, the worst showing in the country, as the specter of job losses loomed over the region.

The median sales price in the Northeast dropped almost 13 percent to $243,600, the National Association of Realtors said Tuesday.

Nationally, sales of existing homes tumbled 6.6 percent in May from the previous year, without adjusting for seasonal factors. The U.S. median sales price slid almost 17 percent to $173,000.

But James Diffley, group managing director of IHS Global Insight’s regional services group, focused more on the 7.6 month-to-month sales gain in the Northeast.

“The numbers are giving some comfort that we’re at the bottom,” Diffley said. “We have a more optimistic view than just a few months ago.”

In fact, all nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed monthly gains in home sales. But compared to last May, sales were down across the board with with seven metro areas recording double-digit declines.
…
Jitters are still running high in the suburbs of New York, where sales fell by 30 percent, the worst decline in the region. Excluding New York City, the median price in the area fell almost 8 percent to $388,000 as job losses on Wall Street rippled through the local economy.

If you look at the sales volume in NJ, sales have bottomed.

and prices continue to get worse. Which is exactly the opposite of what Alpine said.

Anything else the guy can get wrong?

nyc10022 he gets a lot of things wrong but he is basically the only one other than me who posts on the jersey side. good to see someone else chiming in.

go back to the NYC board nyc10022. Your not welcome here.

Oh, and foreclosures for May in New Jersey were down 41% year over year, so things are not getting worse as you say.

Keeping an eye on the essex NJ housing market. I have seen a few homes, nice homes, great neighborhoods, good schools and easy commute. Unfortunately sellers are still chasing the bottom. I don't like saying this, because some people are losing considerable money, and others are having they're bubble burst because no one is biting at they're asking. Taxes in northern NJ are bear and are probably are going to get worse considering the fiscal hole jersey's in, thats not helping. More homes are coming onto the market in essex weekly. My wife and I will look again in few months, when some of the smoke clears. I believe another 15% to 25% price reductions are coming, wall street is not the same and metro area will feel continuing ripples.

what town? i keep an eye on Maplewood although I will likely not move their but I have seen some great homes at prices that are getting better and better. i look mostly in bergen county.

Bergen taxes are lower than Essex taxes.

Homes are the market long time, asking prices need to come down in line with todays economy.

considering that inventory is declining, I think that most sellers would rather withdraw from the market than give away their houses.

Inventory is increasing in the east, declining in the west and south.

inventory in NJ is on the decline:

http://njrereport.com/images/may09_invpace.gif

> go back to the NYC board nyc10022. Your not welcome here.

Alpine, I'll go back to the NYC board, if you promise never to show up there yourself.

We don't need folks who live in Jersey who don't know anything about Manhattan posting there.

Alpo, you didn't keep your deal.

Why are you still on the NYC board, when you live in Jersey, and then complaining about others on the "wrong board"?

what deal? I never said I was going to stop posting on the NYC board. If you think I promised to do that, then your hearing voices in your head.

http://njrereport.com/index.php/2009/07/08/northern-nj-june-home-sales/

http://njrereport.com/index.php/2009/07/14/have-we-hit-a-volume-not-price-bottom-in-north-jersey/

lol, inventory decline = prices down? it's far from the truth. I think the 2nd article kinda hit it on the spot there. inventory will decline along with price decline as the market has to hit certain point in both inventory and sales in order to start a increase from the bottom. From previous histories, prices normally decrease another 15% or more after the initial rapid decrease before settling down.

why sell now? because selling 4 to 5 years from the bottom won't be any different. We have officially come to period in history that will see stagnant housing prices for long period of time as the lesson from the bubble is still fresh in our memory.

I haven't had any luck finding anything I like in NYC so I was thinking of possibly buying in Hoboken but after reading this, I think I'll pass. Thanks for the info.

"From previous histories, prices normally decrease another 15% or more after the initial rapid decrease before settling down."

What your source for that? That is the first time I have ever heard of such a thing.

Check out California right now for the best and most recent example. Check last New Jersey's and NYC's buyer's market from the late 80s to early 90s. I read it from couple of articles in 2007 before all these things started to happen so you can probably Google it somehow. Look at Shiller's chart below also. Finally, look at every buyer's market that we have ever had, it's mostly been 8 to 10 years before the actual bottom, we are only in 3rd year for the entire nation and barely the 2nd year for NYC and 6th borough.

http://www.businessinsider.com/the-housing-chart-thats-worth-1000-words-2009-2

I say if you have to buy now, buy it, if you have to sell now, sell it. For the people that is uncertain and have the time to wait, wait until the price comes to you. For the seller, the same obviously as price will eventually come back, but it may be 1 year or 20 years before it does. For the cheerleaders, stop spreading nonsense that the market may go up so held for better price.

I know a relative in a particular market, he brought a condo unit for around $500k in the late 90s. I just talked with him recently, the condo is still only worth around 250k, half the price and same as it is the last time I visited him (5 years ago). Does it matter to him? Maybe. But it's been his home for the past 10 years so the intangibles have to worth something.

The_President, look at the data from all perspective, not just in your eyes. That chart you posted may indicate a decline but you must be blind to not see the big mountain in the middle of the chart. Until inventory hits 6 to 7 months supply at the least, we'll be in a decline mode.

"Sixth Borough"? Huh? Ok, right there your credibility took a hit. And what does California have to do with NJ? They are 2 entirely separate markets. Forelclosures in CA are up, and foreclosures in NJ are down.

"I know a relative in a particular market, he brought a condo unit for around $500k in the late 90s. I just talked with him recently, the condo is still only worth around 250k, half the price and same as it is the last time I visited him (5 years ago)."

That is a ver bold statement. Care to back it up with an address or something of the kind? Becuase I honestly don't believe you.

If you don't know that many people consider that Jersey City and Hoboken as a 6th, then you obviously don't live here in Jersey City. Credibility? What credibility? If you think you need any credibility on a online forum, go out and get some fresh air. I sure don't care about opinions of someone that seriously don't know the reality out there.

While I understand that different markets behave differently sometimes, don't think that New Jersey or NYC is far behind in terms of real estate or the whole tax revenue/budget situation. At least California can call itself the home of entertainment and tech and New York has fashion and financial. New Jersey as a state would be in some real trouble if not because of bleeding complement of NYC. We have been bleeding population (well, I should state wealth generating and tax paying population) for years now. Google out the article that Asbury press put out last year about that.

Regarding that 500k to 250k story. Well, that is for an international market that went through a real estate bubble in the 90s and never recovered. The economy recovered, but the real estate never fully did. At the bottom of that market, some units in his building was listed for around 175k to 200k. When I visited him in 2003, I saw some Open House flyers for around the 250k price. He's in construction himself so I'll take what he said his condo is worth now as I don't know exactly what is going on in that market. I was surprised as I know the economy was great for the past 5 years. I guess this current global crisis have hit that city once again. Price/Sq Ft and a lot of other characteristic like population, jobs, industries is similar to NYC. There is only few cities in the world like that so I think you can come pretty close to guessing it if you do some research.

El Presidente, what I'm trying to say is that there is really no prediction what the market will do, I feel people should do what is the best for them using their observations, whether it is renting or buying. It is my opinion and my observation that market will generally go through a slower period of decline for awhile before reversing. Please look at NYC market in the 80s and 90s then you will understand. I for one feels that people over long term is generally forgetful so that's why these things happen repeatly. In the short term however, the market will not have a V shape recovery so any chance for buyers of past few years to come out ahead when selling is almost 0.

LuchiasDream, check out hobokenrealestatenews.com and sign up for their weekly inventory list if you looking for a place. I like Hoboken but for the size of the house that we want, they are a little out of my league in both price and taxes. Hoboken could potentially be hitting a bottom towards the end of this year or early next year if their activities kept up the way they did the past couple of months. The devil inside of me is wishing that I could be in Hoboken but most likely I will be buying in JC as price and location is better for me in JC. I do wish the market well, I just not the total optimist or pessimist that everyone seemed to be.

What's up with taxes in Jersey City? I just toured a few high-rises by exchange place; even with a 25% reduction to their ask, nothing makes sense with such high taxes.

Of course I don't live in Jersey City. I live in Manhattan and own a house in Bergen County! Quite honestly, Jersey City is a dump compared to Brownstone Brooklyn. I would not call it a "Sixth Borough"

In fact, a few months ago, I drove past the Beacon in Jersey City, and the first thing I did was make sure my doors were locked and roll up all the windowns. The area was horrible. I can't see why anyone would buy in that building, no matter how nice it might look inside.

lol, at least there is something we can agree on. Regarding Beacon that is.
Price has come down to earth on that building so it may be ok but condo fee in that building is beyond ridiculous. $1000 to $1200 condo fee for a two bedroom for a complex that looked like it came straight out of a scary movie.

In regards to Jersey City against Brooklyn, I think you overgeneralized too much. I've been to all parts of Brooklyn too and it have its own problems. "Sixth" is not something that I made up so don't kill my "credibility" over it (still can't believe that you use credibility here). But seriously, so many of ppl in JC and Hoboken work in NYC, it's common sense that it'll be considered a sixth.

Merill, yes, tax is the number 1 reason that makes me hesitate buying anything in Jersey at all. I feel I should just do my time here and leave the state in its miseries when I'm done in several years. If you looking at the high-rises, I think the abatement that you get for 20 years should be enough for you until you bounce. Hoboken is even worst with the taxes if you don't have an abatement. For just the abatement, I'll be able to rent an apartment of equal or better quality for the whole year.

Ooops, I mean down in south where I'm from.