So is the sale of my home hopeless? (Jersey City, Hoboken: home equity, sales)

[theoakman]

what James described in his trading up analogy was a classical market with ponzi dynamics. First one in is the winner, last one in is the loser. The problem is, his scenario was what actually existed from 2000 to today. The ponzi scheme was alive and well. But like all ponzi schemes, they all collapse when there is no one to come in at the bottom of the totem pole. That was clearly established when someone with a moderate income could no longer afford that condo or starter cape. No problem, enter the no money down exotic loan. The ponzi scheme continues. The problem is, once we hit 2006-2007, there was no else able to come in at the low end of the market, even with no money down. At that point, people who are already in can't trade up because there is no one there to buy and the only way for homes to go is down.

There are a lot more factors to the actual dynamics of the market but by and large, there is nothing I can see that would actually point to prices stabilizing or increasing in this area.

[JamesBoyer]

Originally Posted by theoakman

what James described in his trading up analogy was a classical market with ponzi dynamics. First one in is the winner, last one in is the loser. The problem is, his scenario was what actually existed from 2000 to today. The ponzi scheme was alive and well. But like all ponzi schemes, they all collapse when there is no one to come in at the bottom of the totem pole. That was clearly established when someone with a moderate income could no longer afford that condo or starter cape. No problem, enter the no money down exotic loan. The ponzi scheme continues. The problem is, once we hit 2006-2007, there was no else able to come in at the low end of the market, even with no money down. At that point, people who are already in can't trade up because there is no one there to buy and the only way for homes to go is down.

There are a lot more factors to the actual dynamics of the market but by and large, there is nothing I can see that would actually point to prices stabilizing or increasing in this area.

No cynic, it existed from 1945 - 2006 and many can argue that it still exists. You like to use the most negative terms that possibly come close to applying to what you are talking about, but the property ladder so to speak is not a ponzi scheme.

The other guy who wrote the book was more than a little harsh, and not completly on the mark. He talked about his 3 friends, not sure if he is giving real or hypothetical examples, but there is no townhome/condo/or single family home on the market currently in Morristown priced between $375,100 and $379,900 there have not been any townhome/condo/single family home sales in Morristown for the last year at any price between 376K and $379,500 so I am guessing his example was made up.

If the Realtors these people were hiring were truely 2 week professionals then the people did not do their home work before hiring. Yes it takes 2 weeks of courses to qualify to take the state exam. In those 2 weeks they spend 0 hours teaching how to be successful, that you learn later on your own, in any courses you choose to take, of in the experence you bring to the table from prior experence. This is part of the reason very few people who choose to become Realtors make it in this business past 2 years, let alone the first year. I don't know what the current numbers are but the numbers used to be 1 out of 30 Realtors will successfully make it through their first year. Then you take those that make it through the first year and make new groups of 30 and about 2 out of 30 make it through the 2nd year.

[theoakman]

Originally Posted by JamesBoyer

No cynic, it existed from 1945 - 2006 and many can argue that it still exists. You like to use the most negative terms that possibly come close to applying to what you are talking about, but the property ladder so to speak is not a ponzi scheme.

The other guy who wrote the book was more than a little harsh, and not completly on the mark. He talked about his 3 friends, not sure if he is giving real or hypothetical examples, but there is no townhome/condo/or single family home on the market currently in Morristown priced between $375,100 and $379,900 there have not been any townhome sales in Morristown for the last year at any price between 376K and $379,500 so I am guessing his example was made up.

If the Realtors these people were hiring were truely 2 week professionals then the people did not do their home work before hiring. Yes it takes 2 weeks of courses to qualify to take the state exam. In those 2 weeks they spend 0 hours teaching how to be successful, that you learn later on your own, in any courses you choose to take, of in the experence you bring to the table from prior experence. This is part of the reason very few people who choose to become Realtors make it in this business past 2 years, let alone the first year. I don't know what the current numbers are but the numbers used to be 1 out of 30 Realtors will successfully make it through their first year. Then you take those that make it through the first year and make new groups of 30 and about 2 out of 30 make it through the 2nd year.

I'm not going to try to convince you anymore. I've said everything I possibly could. If you don't want to admit that a bubble existed in a market where prices rose 100% with incomes only rising 20%, there's nothing I can do to convince you.

[tahiti]

Originally Posted by PD517

Ok let me address this, this is one of the things I kind of agree with you on even though a lot of your past posts make no sense at all of this market. Generally that is the way the real estate market has worked over time, but why this time is different.

The "Property Ladder" theory. Lets say 99% of first time homebuyers will start out with something small because that is what their income can afford. I would like to say a decent condo/townhouse, even a small cape style home, etc.. whatever is percieved as a "starter home". The example I will use are late 20 somethings, early 30's - a couple who just got married or whatever, dual incomes, could be white or blue collar. AVERAGE people.

Lets discuss some different time periods that have been spoken about and compared in some other real estate threads in this forum.

1998-2000
A couple brought real estate in the following areas and prices (these are real examples from people I know that were in that age range during that period):
A 2 bed condo in Little Falls, NJ for $150k.
A townhome in Morristown, NJ for $175k.
A small cape home (3 bed 2 baths) in Totowa, NJ for $200K.

Their combined incomes at the time ranged from $55k-100$k.

Getting a standard conventional 30yr fixed mortgage - 20% down and 2x-3x MAX income. Nice and affordable, the way it should be.

<snip>.

this is a great post.

[JamesBoyer]

The definition of a bubble is more than that. I have said it before and am saying it again. Other markets that truly had a bubble do not resemble our markets here very close at all, so you can call it what you want, but know that it is the same thing as when you scream that foreclosures have doubled because you know that saying doubled has a much much bigger impact than quoting the actual percentages. up to 2% from 1%. In that respect your just like Fox News.

You are pinning your whole argument on one point. Not quite as bad as Tahiti saying that real estate prices in Harding are down 25% because her Realtor friend says they are, when I darn well know the numbers for Harding like the back of my hand. I live less than a mile outside of Harding, it is my business to know what is going on with it.

[tahiti]

Originally Posted by JamesBoyer

The definition of a bubble is more than that. I have said it before and am saying it again. Other markets that truly had a bubble do not resemble our markets here very close at all, so you can call it what you want, but know that it is the same thing as when you scream that foreclosures have doubled because you know that saying doubled has a much much bigger impact than quoting the actual percentages. up to 2% from 1%. In that respect your just like Fox News.

You are pinning your whole argument on one point. Not quite as bad as Tahiti saying that real estate prices in Harding are down 25% because her Realtor friend says they are, when I darn well know the numbers for Harding like the back of my hand. I live less than a mile outside of Harding, it is my business to know what is going on with it.

I will ask, yet again, why do you think I live in Harding?!?!?!

[JamesBoyer]

Originally Posted by tahiti

I will ask, yet again, why do you think I live in Harding?!?!?!

ok, where do you live, first you say LIB then you say you don't live there that you live in Harding, now you say you don't, I don't know, all I can say is stop changing the story. I do know you talked about harding the other day and how prices are down 25% there according to your realtor friend, and that is totally not supported by the numbers.

[tahiti]

Originally Posted by JamesBoyer

ok, where do you live, first you say LIB then you say you don't live there that you live in Harding, now you say you don't, I don't know, all I can say is stop changing the story. I do know you talked about harding the other day and how prices are down 25% there according to your realtor friend, and that is totally not supported by the numbers.

i never said i lived on lbi and i never said i lived in harding. i've been very consistant. prove me wrong by my posts. you can't.

[theoakman]

Originally Posted by JamesBoyer

The definition of a bubble is more than that. I have said it before and am saying it again. Other markets that truly had a bubble do not resemble our markets here very close at all, so you can call it what you want, but know that it is the same thing as when you scream that foreclosures have doubled because you know that saying doubled has a much much bigger impact than quoting the actual percentages. up to 2% from 1%. In that respect your just like Fox News.

You are pinning your whole argument on one point. Not quite as bad as Tahiti saying that real estate prices in Harding are down 25% because her Realtor friend says they are, when I darn well know the numbers for Harding like the back of my hand. I live less than a mile outside of Harding, it is my business to know what is going on with it.

Please don't accuse me of trying to manipulate statistics. I already demonstrated that the foreclosure rate had not touched much above 1% for a good 50 years. When it twice as much as the previous historical high, that's a big deal.

And I didn't pin my argument on one point. I pinned in on about a dozen.

[NatasNJ]

James: Can't you pull numbers of AVG sale by year in say Morristown for 1998 and each year since? Wouldn't that show if a bubble existed or not? I think it would be rather easy to show the AVG % increase in a given area using MLS Trend or something. This way you could at least have numbers out there to show if a bubble exists (or argue over what % increase over that given span consititues a bubble)

ALSO. I bought my house in SJ Westmont in 2002 for $118k. Sold 4 years later 2006 for $217k. That is a 85% increase in roughly 55 months.
And I had multiple offers in and could have probably gotten closer to 90% increase if I wasn't in rush to sell. So that is OVER a 20% increase from 2002 to 2006. Is that not a bubble? Those are NUMBERS I can show proof of and are 4-5x the historical norms of housing appreciation.