When Did The Northern NJ Housing Bubble Begin? (Jersey City, Hoboken: apartment, health insurance)
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I Repeat, here this now here this, 9/11 is what threw the housing market out of control for the middle class!!!! Not cops, not teachers, its 9/11!!!!!
I can't believe noone pointed out that stevemorse is right.
Because its true.
Sure, housing was on the rise in the late 90's... the reason was the internet stocks bubble. People made massive chunks of change investing in an unfounded business model, with startups throwing money around left and right, with VC's selling off their peaking shares with a grin. The bubble bursts... and....
Whats the safest place to put your money? Well, the rest of the stock market was still doing ok, after a short downturn it was realized that them thar intarwebs don't manufacture money like some magical pig pooping it out. So while some invested in real estate, many continued banking on the long term benefits of stocks.
Then comes 9/11/01. The market was in a frenzy, people were afraid, fear motivated sale of stocks, which then drove prices down further, and again, the value of the stock market was in question - this time, the entire market. Once again, people looked elsewhere for investment opportunities, and they looked to real estate. A rare combination of a fairly low interest rate and a driven real estate buyer looking for investment opportunities caused the market to flare up, contractors turned into builders, day trading folks turned into professional home flippers. It was seen that perception could drive up value, and bathrooms and kitchens made for some of the best ROI in a home remodel - the millwork, tile, big box home supply stores, etc businesses soared with people paying for or performing their own upgrades, and everyone who made a small chunk went for a larger chunk of change, a bigger fixer upper, a larger piece of property.
Soon it was realized that new homes were easily built, and could cost drastically less. Moving in on a fearful market, where potential buyers firmly believe they need to get in now or lose out forever, builders found it far cheaper to build entire communities in one shot, one gigantic job site, progressively building homes to maximize the potential of their work force. Others realized NYC's market will never really go down, and young professionals needed a place to go... and suburban communities didn't fit their fast-paced lifestyle. In Hoboken, Jersey City, etc., reno's were the name of the game, and apartments turning into condos.
Its easy to see how all the mess got started, and pretty worrying at the same time. Trends like this happen all the time, the most unique part of this is how everything worked together to create our current state, no single market is 100% at fault here.
I can't believe noone pointed out that stevemorse is right.
Because its true.
Sure, housing was on the rise in the late 90's... the reason was the internet stocks bubble. People made massive chunks of change investing in an unfounded business model, with startups throwing money around left and right, with VC's selling off their peaking shares with a grin. The bubble bursts... and....
Whats the safest place to put your money? Well, the rest of the stock market was still doing ok, after a short downturn it was realized that them thar intarwebs don't manufacture money like some magical pig pooping it out. So while some invested in real estate, many continued banking on the long term benefits of stocks.
Then comes 9/11/01. The market was in a frenzy, people were afraid, fear motivated sale of stocks, which then drove prices down further, and again, the value of the stock market was in question - this time, the entire market. Once again, people looked elsewhere for investment opportunities, and they looked to real estate. A rare combination of a fairly low interest rate and a driven real estate buyer looking for investment opportunities caused the market to flare up, contractors turned into builders, day trading folks turned into professional home flippers. It was seen that perception could drive up value, and bathrooms and kitchens made for some of the best ROI in a home remodel - the millwork, tile, big box home supply stores, etc businesses soared with people paying for or performing their own upgrades, and everyone who made a small chunk went for a larger chunk of change, a bigger fixer upper, a larger piece of property.
Soon it was realized that new homes were easily built, and could cost drastically less. Moving in on a fearful market, where potential buyers firmly believe they need to get in now or lose out forever, builders found it far cheaper to build entire communities in one shot, one gigantic job site, progressively building homes to maximize the potential of their work force. Others realized NYC's market will never really go down, and young professionals needed a place to go... and suburban communities didn't fit their fast-paced lifestyle. In Hoboken, Jersey City, etc., reno's were the name of the game, and apartments turning into condos.
Its easy to see how all the mess got started, and pretty worrying at the same time. Trends like this happen all the time, the most unique part of this is how everything worked together to create our current state, no single market is 100% at fault here.
coupled with lenders giving out loans like drunken sailors......a perfect storm.
but 9/11 didn't "cause" the massive speculation and growth and subsequent implosion in the now hardest hit areas (AZ, CA, FL).
Then comes 9/11/01. Once again, people looked elsewhere for investment opportunities, and they looked to real estate. A rare combination of a fairly low interest rate and a driven real estate buyer looking for investment opportunities caused the market to flare up, contractors turned into builders, day trading folks turned into professional home flippers.
Others realized NYC's market will never really go down, and young professionals needed a place to go... and suburban communities didn't fit their fast-paced lifestyle. In Hoboken, Jersey City, etc., reno's were the name of the game, and apartments turning into condos.
9/11 caused an initial perception that the Jersey burbs (esp Bergen co.) were a "safe haven" from terrorism and drove up appreciation considerably (versus being a "sitting duck" in an unsafe city). People flocked over from NYC and the expectation was that more would do so. I also think immigration too has been a big driver for demand as well. Prices went up and remain fairly afloat compared to elsewhere.
9/11 caused an initial perception that the Jersey burbs (esp Bergen co.) were a "safe haven" from terrorism and drove up appreciation considerably (versus being a "sitting duck" in an unsafe city). People flocked over from NYC and the expectation was that more would do so. I also think immigration too has been a big driver for demand as well. Prices went up and remain fairly afloat compared to elsewhere.
people & businesses have been flocking across the Hudson long before 09/11
$$$$$..cheaper rents ( not cheap) but cheaper then NYC
The Mid town direct rains changed a lot of North Jersey towns. With this new access prices soared in places like Maplewood, South Orange, Montclair etc.
The Mid town direct rains changed a lot of North Jersey towns.
Sure. Priced out/pushed out many normal working folks while many newby NY'ers thought it was the best thing since sliced bread. Politically I believe most MidTownDirect communities have become more liberal (or less conservative). I believe this to be true of Maplewood, South Orange, and Montclair especially.
Quote:
Originally Posted by kaday
With this new access prices soared in places like Maplewood, South Orange, Montclair etc.
And with the property re-evaluations (post MidTownDirect) additional tax revenues were poured into Essex Co., City of Newark, and Sharpe James coffers. Did the newby NY'ers care? Probably not.
When the Midtown direct service was cancelled south of Long Branch on the NJ Coast Line many years ago there was no negative effect on the property values. Go figure?
Last edited by Spincycle; 08-14-2008 at 03:13 PM..
I believe 9/11 may be part of the reason, but even here in NEPA, where we saw a hiccup of NYC transplants for merely a couple of years right after the terrorist attacks, the population growth has begun to level off.
Population of Monroe County, PA:
7/1/00-7/1/01 : +3,804 or +2.7%
7/1/01-7/1/02 : +4,733 or +3.3%
7/1/02-7/1/03 : +4,718 or +3.2%
7/1/03-7/1/04 : +3,764 or +2.5%
7/1/04-7/1/05 : +3,403 or +2.2%
7/1/05-7/1/06 : +2,711 or +1.7%
7/1/06-7/1/07 : +1,809 or +1.1%
It should also be interesting to note that over the past two years, the population growth in NEPA has cooled very significantly from the post-9/11 years. My guess would be that high gas prices have put the brakes (literally) on people who were once moving to NEPA and commuting daily back into Northern NJ and NYC. Nevertheless, gaining over 26,000 people in under a decade is pretty impressive for any county. I suspect this trend to continue until the long-anticipated commuter rail line linking Scranton to Hoboken (with stops in the Poconos and Northern NJ) is complete, when more people will start moving into NEPA.
Population of Pike County, PA :
7/1/00-7/1/01 : +1,428 or +3.1%
7/1/01-7/1/02 : +1,706 or +3.6%
7/1/02-7/1/03 : +2,000 or +4.0%
7/1/03-7/1/04 : +1,715 or +3.3%
7/1/04-7/1/05 : +1,958 or +3.7%
7/1/05-7/1/06 : +1,833 or +3.3%
7/1/06-7/1/07 : +1,381 or +2.4%
In neighboring Pike County (Milford/Bushkill Area), the cooling of the population growth has been much less pronounced, with the effects of the higher gas prices not really showing until the most recent figures, when the population increase declined by roughly one percentage point. It will be interesting to see what happened in Pike County from July 1, 2007 to July 1, 2008, whenever the U.S. Census Bureau gets around to releasing that information.
As long as the energy crisis continues, I predict a continued cooling of growth (and housing prices) here in NEPA and perhaps an influx of new residents into Sussex County and Warren County in NJ, where housing prices and taxes are still noticeably less expensive than Northeastern NJ, yet the commute is also less of a hassle than those who drive in from NEPA. People like wiley need to be very concerned about the potential for future development near their homes.
Around 1998 housing went up rapidly especially in Bergen county. I purchased in a solid town in central bergen in 2000 and thought I was buying at the height of the bubble for $379,000 The same house was $259,000 in 1995. However, after 09/11 housing shot through the roof. Up until early 2007 my house would sell in the low to mid $700's. However, now it is much tougher with my house probably getting in the low to mid $600's
Around 1998 housing went up rapidly especially in Bergen county.
Yes, during Bill's 2nd term.
Quote:
Originally Posted by franksmith
However, after 09/11 housing shot through the roof.
The "safehaven effect" relative to NYC.
Quote:
Originally Posted by franksmith
Up until early 2007 my house would sell in the low to mid $700's. However, now it is much tougher with my house probably getting in the low to mid $600's
Still a sellers market IMO.
My one buddy bought a house in EP just prior to 9/11 for $1/4M and sold it a few years after for just under $1/2M. Almost a $1/4M of equity.
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Late 90's without questions
