New Home Offer - Advise Needed (Edison, Princeton: real estate market, 2009, rent)

[silverdrizzle]

Hi All,

We are looking at accepting an offer in central jersey on a new house for 515,000. Its about 2,700 square feet, and has some nice upgrades. Given how the market is going, I wanted to find out if you all think this is a good deal. Thanks for your help.

[Lusitan]

You really would need to give more specifics for anyone to evaluate the particular price and property you're talking about, but since you asked for opinions based on "given how the market is going" ...

Here's where the market in NJ real estate is going: nowhere but down for years to come. Why are you buying this now? Do you understand the likelihood that the value of the house will continue to sink for years to come, and that you may be underwater on your mortgage (paying a debt that is more than the house will be worth) treading water and gaining no equity for a decade or more? Do you have 6 to 12 months of living expenses saved up in FDIC insured accounts, apart from the money you will use for down payment and closing costs? Are you saving for retirement and for your children's education, and will the house purchase interfere with those plans? How long are you willing to stay in that house if you can't sell? How secure is your income?

Why not wait until values stop sinking? They will stabilize at some point and then remain flat for years after that, based on past housing bubbles (none of which were as severe as this one).

NJ is one of the weakest real estate markets, with most counties expected to fall 25% or more in 2009 alone, who knows after that. We had a whole thread about it a few weeks ago:

http://www.city-data.com/forum/new-j...orbes-one.html

Check out the graph below, it will give you a good idea of "how the market is going" ...

Mod cut: copyright violation

[Jillian Mason]

It depends where in Central NJ. Seems like a good price for the size home, but there are some poor quality builders out there who need to give away homes. Also, it depends on the school district. What town are you referring too?

[silverdrizzle]

Thanks for your advise. The house has a Princeton address, but is in Franklin Park. It has 4 bedrooms, 2.5 bath.

As far as our situation, we are planning to stay in this house for 10 years. We did lots of research and found out that the Elementary School here are fine, but the HS is not the greatest. But by the time our kids get to HS it will be another 10 years at least.

We wanted to get new construction, and we have been struggling to find a good reputed builder like this one, for a reasonable price. And given how the market is going, I am not sure how much more new construction there will be.

Appreciate more of your comments and advise. Thanks.

[wileynj]

Originally Posted by Lusitan

More food for thought:

[Lusitan]

The world's not ending, house values are simply getting back to normal after the largest bubble in the history of the country. But I suppose pretending it's not happening is an option.

[wileynj]

Originally Posted by Lusitan

The world's not ending, house values are simply getting back to normal after the largest bubble in the history of the country. But I suppose pretending it's not happening is an option.

LOL..touche!

[Roselvr]

Originally Posted by silverdrizzle

Hi All,

We are looking at accepting an offer in central jersey on a new house for 515,000. Its about 2,700 square feet, and has some nice upgrades. Given how the market is going, I wanted to find out if you all think this is a good deal. Thanks for your help.

No one can really tell you unless we know what the market is like there, how much land is available as well as what other houses are going for.

Do you have an agent that can give you an analysis?

[lets_hope_for_newbruns]

Gee, The housing bubble just burst and all optimists since 2006 who predicted it will not result in low home prices were proven wrong.
Wait some more time and prices will fall further. It takes 1 year since the burst for prices to lower.
Did that home you are looking at fell 10-30 percent in value?

In these times I rather rent in a neighborhood with good schools until it settles down. Or think of owning a condo as well because the appreciateion/depreciation rate is not that steep compared to SFH.

Think of it, all people are united and no one buys - the demand falls, the prices falls by itself. That is the power of the people unity.
The wall street people, the lenders, the appraisers and real estate agents were all greedy since 2000.
They told you heads you win, tails we win. All these people contributed to the bubble burst.

The only way your home value goes north is if there is a change in economy conditions. I doubt its gonna happen so soon.
Is there going to be another inventor like Thomas Edison in NJ? I doubt it.

But if you really have too much money and don't care spending it -- it does adds to NJ economy and national economy. Feeds the mouth of the real estate agent who was really honest and hard working and has repeat customers. Appears you are a rich man
If you are planning to stay a very long time, and can hold it then it really does not matter where the market goes.

I too am looking to buy a home because I really need to upgrade. But at the same time weighing all options. The places I looked at prices did fell 25-50k. Will it fall further is anyones' guess.

check this out:
http://njrereport.com/index.php/2008/05/