Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
do you truly believe that? whose current income levels? sure, the economy got bad, more homes went up for sale, but they are being purchased, and inventory times are decreasing in many towns. so someone's income level is hitting it isn't it?
My opinion in that regard is that many banks have taken these homes off the market. After all, we already paid for it. Some are buying that's true, but that's not representative of the economy as a whole. In addition, many people have not learned their lesson and borrow more than what they can afford.
Another thing that we are seriously worried about is TAXES. We are seeing 1800-2200 sq ft houses from 300k to 400k with tax bills ranging from 8-11k. With all of the budget deficits going on in this state, and the only way they know how to fix them is buy sticking it to the taxpayers and raising there taxes. Its funny, on various sites like trulia zillow, etc, they list the property taxes by year, and EVERY YEAR bam, you see a few hundred dollar increase. Usually looks like this...
2007: 8000
2008: 8400
2009: 8900
2010: 9300
We dont even have kids yet. And they are going to bump the taxes EVERY year. Pretty soon, every town is going to be like West Orange. Raise taxes, house value goes down proportionately. I'm seriously down about housing in general. Every house we LOVE ends up having an insane tax bill. Its very frustrating. Wish I could rent forever.
This is what's concerning me, as well. Currently renting in Middlesex, but recently retired, and looking to buy a house somewhere. I have saved a nice chunk for a down payment, and could afford a $300K house, if it were not for the taxes. This is why we are looking in PA, DE, and possibly a few other states.
While we COULD afford some houses, even with NJ Taxes right now, I am VERY concerned about where those taxes are going in the future. And if I die first, I'd like to have the house paid off by my life insurance, so my wife will be able to get by on half the pension. This is something that will be very difficult for her if taxes are $1K+ per month!
We moved from LI (renting there, too) to NJ about 8 years ago, and have really liked our area (a LOT!) ... but, especially when considering that even our Governor doesn't have faith in NJ's economy ever turning around, we feel we should not be putting our eggs into this shaky basket, so we are looking to take this middle-class family to greener pastures outside of NJ's borders.
I realize that at least we have the opportunity to look elsewhere. Many folks are really stuck looking here in the tri-state region, since that's where their bread gets buttered. I was in that boat for over 34 years, and I'm happy I can now try elsewhere. I feel bad for those who are truly stuck here in these tryingtimes.
Definitely a buyers market in the urban centers. Newark has nearly 20 months of inventory right now for single family homes. Oddly, prices have not dropped in the last year in Newark, even with all the excess inventory. However, prices cannot remain stable with so many homes on the market. A drop is likely soon.
Westfield though, another story. Seriously different. Right now there is only 5 months of inventory, and the median home price in Westfield was $631,000 last year and $660,000 for the past 12 months. So, if anyone is waiting for price decreases and better buying conditions in Westfield for the Spring market, you can forget about it. It's quite strong.
Cranford? Only 4.8 months of inventory, but values have been stable. The median home price in Cranford last year was $417,300. For the last 12 months it has been $420,000. So basically unchanged. However, the same buying advice holds true. There will be no decreases in Cranford for the Spring market, and possible light increases.
Interesting data given all the doom and gloom.
Is median home price really an idicator of anything at all? If a few expensive homes sell in the area that skews the number upward and the same can happen on the lower end. I am more impressed wih the inventory or lack of as a true indicator of stability.
What I have found is only the better places in NJ are doing well. Even the moderate place say Colonia are still getting crushed at least thats what I see.
My opinion in that regard is that many banks have taken these homes off the market. After all, we already paid for it. Some are buying that's true, but that's not representative of the economy as a whole. In addition, many people have not learned their lesson and borrow more than what they can afford.
it's really tough right now to borrow more than you can afford. most banks are requiring 20% down now. some are getting strict about areas they will loan, and adding higher interest rates in some areas. banks have kept the supply of foreclosure homes limited, and they are trickling them out, but from what I've seen around me in the past 12 months, houses seem to be moving. we're coming up on spring/summer, the economy has improved, consumer indicators are even looking positive...more people are returning to work. it seems to be doing pretty well around me, and people are buying. my friends just won a bid on a house as 1 of 5 total offers. still a buyer's market, but it's getting better and better and closer to equilibrium it seems. at least in northern NJ.
Is median home price really an idicator of anything at all? If a few expensive homes sell in the area that skews the number upward and the same can happen on the lower end. I am more impressed wih the inventory or lack of as a true indicator of stability.
What I have found is only the better places in NJ are doing well. Even the moderate place say Colonia are still getting crushed at least thats what I see.
Median is better than average because it is less sensitive to those high and low extremes. If you had, say, one house in Westfield that sold for $400 million (I know, ridiculous, but it makes the point), the median price would hardly budge. The average price, though, would go through the roof and be completely meaningless.
It is true though, that inventory levels are a better indicater of market health. When they are below 6 months, that is usually a good sign. When they are 20 months, like in Newark, that's not good at all.
This is what's concerning me, as well. Currently renting in Middlesex, but recently retired, and looking to buy a house somewhere. I have saved a nice chunk for a down payment, and could afford a $300K house, if it were not for the taxes. This is why we are looking in PA, DE, and possibly a few other states.
While we COULD afford some houses, even with NJ Taxes right now, I am VERY concerned about where those taxes are going in the future. And if I die first, I'd like to have the house paid off by my life insurance, so my wife will be able to get by on half the pension. This is something that will be very difficult for her if taxes are $1K+ per month!
We moved from LI (renting there, too) to NJ about 8 years ago, and have really liked our area (a LOT!) ... but, especially when considering that even our Governor doesn't have faith in NJ's economy ever turning around, we feel we should not be putting our eggs into this shaky basket, so we are looking to take this middle-class family to greener pastures outside of NJ's borders.
I realize that at least we have the opportunity to look elsewhere. Many folks are really stuck looking here in the tri-state region, since that's where their bread gets buttered. I was in that boat for over 34 years, and I'm happy I can now try elsewhere. I feel bad for those who are truly stuck here in these tryingtimes.
if it's doable for you, I'd seriously consider moving over the boarded to PA. but only if you really don't need to worry about public schools, as many towns in PA are not exactly great. again...you get what you pay for. my sister's property taxes are around $1500/yr. but her school district isn't even an option.
it's really tough right now to borrow more than you can afford. most banks are requiring 20% down now. some are getting strict about areas they will loan, and adding higher interest rates in some areas. banks have kept the supply of foreclosure homes limited, and they are trickling them out, but from what I've seen around me in the past 12 months, houses seem to be moving. we're coming up on spring/summer, the economy has improved, consumer indicators are even looking positive...more people are returning to work. it seems to be doing pretty well around me, and people are buying. my friends just won a bid on a house as 1 of 5 total offers. still a buyer's market, but it's getting better and better and closer to equilibrium it seems. at least in northern NJ.
That’s precisely what I tried to convey when I replied to the OP. As I stated, northern New Jersey is receiving an influx of New Yorkers with higher income levels than your average New Jerseyan family. Although banks are lending, they also understand that the risks associated with reckless lending are minimum, and I know you are intelligent enough to understand what I mean. “Some” banks are getting strict, but not all of them. Loopholes are found and faulty accounting practices will allow the same old story to continue. The current state of the real estate market is being artificially put together. I often wonder what would happen to prices if all banks were forced to put back all these properties back on their balance sheets. And what would have happened if the House and Congress denied the bailout money to these banks. With that said, I know that some towns in New Jersey are holding up very well despite the economic outlook, but the reasons are very obvious.
Last edited by Ed Guitar; 02-21-2011 at 02:38 PM..
if it's doable for you, I'd seriously consider moving over the boarded to PA. but only if you really don't need to worry about public schools, as many towns in PA are not exactly great. again...you get what you pay for. my sister's property taxes are around $1500/yr. but her school district isn't even an option.
Thanks Brady! Yup, I have been planning a trip to PA ... (Zillow and Trulia have been my friends of late). I LOVE some of what I see in Pocono Lakes, and Lake Arial, but I assume you are talking closer to Bethlehem/Easton?
But I also see some nice places down by Bethany/Rehoboth/Lewes ... just so far away from any action in the off-months.
Don't want to hijack this thread, though ... it's an interesting one.
If you're in the market to buy and can wait, I can assure you, WAIT. Been saying this for over 2 years now. I mean don't exactly try and time the falling knife, if you are ready and willing to stay for the next 15-20 years then, do it. Applying this to the local area (North and Central Jersey).
Wait, as the government is finally starting to pull its arm out of the real estate game. This is the largest issue a lot of us have been waiting for, as the government and their "free" money to the banks and very low interest rates have kept prices artificially high.
Supply vs. Demand: There are a good amount of people sidelined right now who want to buy and have the funds available. In our local area, there is a market of ready buyers in the $200k-$400k range (starter homes, 1st move ups from their starter homes). Problem is, log onto your favorite MLS and look at the crap available in that range. Not much supply is there? Anything that remotely looks good, is going quick. Crap is crap and will continue to remain unsold until the price is right.
This the perfect storm if you are a SELLER. There is a low inventory for a majority of towns in the sub $400k range of decent homes with a supply of potential buyers who don't want to wait. Run down to your favorite real estate office, give them your 5%, price it based on comps, and I guarantee you it will sell quick. Maximize your price potential while you can.
Otherwise, face what is going to happen, outlined below:
Many people have withdrawn previously listings or held out on listing this winter, and even from the 2 previous winters (haha) hoping to get a higher price this coming spring/summertime. From the amount of uniformed people I've dealt with, a LOT of people will be listing again, come warmer weather. So with a huge increase in supply vs. demand, you will see price decreases as competition heats up. Strike 1
THIS IS THE BIGGEST RIGHT HERE: There is a large portfolio of bank owned homes (homes that have already been foreclosed on or will be) in the North and Central Jersey area. Lots of empty homes, being "winterized". READ UP ON THE TERM: SHADOW INVENTORY. Banks have been sitting on these properties and they are going to be SLOWLY released over the next few years. They really had no reason to dump them, no need to take losses when you got free money from bailouts. Adding more to the supply vs. demand game. Prices decrease. Strike 2.
Ask yourself, are you or someone you know a homeowner? Been laid off, still laid off, actually got a job but with a lesser salary, just stringing themselves along with unemployment until the weeks run out, or already had employment run out? I bet every single person here can answer yes and so could their neighbor.
No problem, you could still keep your home. We'll modify your mortgage, etc... Problem is the re-default rate has turned out to be very high with another failed government program. Ok ,so the bank is sending you foreclosure notices? No problem, have your lawyer keep delaying or just plain old sue the bank to "prove" they own the mortgage - common tactics that have kept people in their homes these past 2 years. Even judges have been ruling in favor of homeowners and having the bank stop all proceedings. This is all coming to an end as we speak. If you can't pay your bill for your inflated value home, the bank is going to take it back.
Nothing is stopping this. More bank repo's = more homes to get off the books = more supply vs. demand. Are a lot of these jobs coming back and are incomes going to rise significantly in the future? No. Strikes 3 & 4 & 5. We're out.
Interest rates? Not much to say here, numbers speak for themselves. Few months ago you could've had a 3.75% 30 year fixed rate with 0 points. What are we at today, over 5% or something. Still historically low, but a sharp rise given the short time period. This is approx. but for every 1% rise in rates, it's generally matched with a 10% reduction in price - your buying power gets reduced. Lower prices across the board. Strike 6.
Taxes? Ughh, the most hated term in NJ. They are not going any lower. Actually a lot of you can take a look at your recent tax bills. Bet ya they went higher. Well its all relative - higher taxes mean lower home prices. Look at West Orange and other some other towns -then look at the prices over the last 2-3 years. Lower. More cities to follow. Strike 7.
The actual mortgage process: Been saying this for years. They were going to get stricter. They did. Now, forget about it. You have to sign over your newborn with the amount of verification they need. Take a look at the news, fannie and freddie may be gone soon. Numerous mortgage companies out of business. Strict debt to income ratios. Higher credit scores. Higher down payments (from what we're hearing, lots of lending companies looking to move from the 80% LTV to 75% and lower). You better be cash strong if you want to buy a home. Guess what, majority of people aren't. I'll double down my bet from above and say a lot of people know or have heard of someone they know get into the contract stage, only to have the deal fall apart due to financing. Strike 8.
Feeling squeezed like an orange? Sure everyone is, from the successful business owner to the unemployed guy. The price of everything has gone up and will continue to go up. Your health insurance premiums have already been raised and will continue to rise (quick someone tell the unions, they seem to be misinformed), the gas you put in your car has gone up and will be at $4.00-$5.00 a gallon soon, your public transit costs has gone up (can't you see the great changes to NJ Transit ), your daily staples (milk, bread, eggs, etc) are up, well you get the drift. Everything is going up in price, this is the way things will be for the considerable future. Less money in your wallet = less money for your housing costs. Strike 9, 10,...oh forget it I forgot what number we're at already.
Point being there are a lot more "strikes" that will effect housing prices. I just gave you some examples. Look at the history of real estate, look at it as a whole for the country then look at it for the NJ/NY Metro area markets. Last time you saw a normal real estate market operating was 1998-2000. It's getting back that way, surely but SLOWLY. NJ didn't "burst" like Las Vegas, California and Florida, it's deflating, just as predicted.
Take a look at some posts made in the NJ forum here back in January 2009 (over 2 years ago - was previously active in the RE forum under a diff. name long before that but couldn't get in an old account):
Take a read. Changes happening as predicted. I've got no "skin" in the home selling game, I'm involved in real estate investments out of this area along with people who know how markets work. I listen daily to the misinformation and straight up lies spewed by agents to home sellers and buyers over the last 3 years and have watched the corrective actions being taken against them. Luckily you have a few good apples, along with some newer real estate companies coming to the area that really are game changers. Just use common sense, just open your eyes to what's going on around you, and say to yourself, is this market normal based on all the above?
Or just refute it, throw it all out the window, and say my town's "different" - we're on a midtown direct train line into the city, like some people seem to think.
Feel free to pass this on to anyone who may need some help on their decision. I had the majority of this written up for a different group needing information on NJ real estate, but felt it applied here too. Good luck!
If you're in the market to buy and can wait, I can assure you, WAIT.
...
Feel free to pass this on to anyone who may need some help on their decision. I had the majority of this written up for a different group needing information on NJ real estate, but felt it applied here too. Good luck!
Wow! Thanks for this info! It's a lot to digest, but it DOES make me feel less pressure to buy THIS year. Sure would've liked to get in on the lowest interest rates, but lower prices might even it out somewhat.
Thanks again!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
), your daily staples (milk, bread, eggs, etc) are up, well you get the drift. Everything is going up in price, this is the way things will be for the considerable future. Less money in your wallet = less money for your housing costs. Strike 9, 10,...oh forget it I forgot what number we're at already. 
