union county/essex county housing market - when is the best time to buy? (Newark: sales)

[stinky12]

Folks,

I'd like to get some debate going on this issue, so are there any opinions on the residential real estate market in union or essex county?

I'm interested in the westfield/cranford area. I'm looking in the 500-600K price range, but we can open this up to a broader discussion.

Plain and simple, I think the housing market has further to fall, but here are a few points to consider.

I noticed that the median amount for home sales went down quite a bit from last year. Although I'm sure there will be some buying going on in the spring/summer as people w/ kids want to move in for school, etc. but I think that the homes in the union county/essex county area have further to fall in terms of value for a few different reasons:

1) they're still really expensive - there was a good Money magazine story on real estate predicting that the places that have fallen the least will be among the last areas to recover. The North Jersey/NY city suburb area was specifically named. Look at how much prices have gone up in this area since 2000-2003. They are still really expensive, and if you bought a home 5-10 years ago, you can still make quite a hefty capital gain if you sell it (assuming you didn't milk out all the equity)

2) unemployment keeps going up - this will put stress on current homeowners and would-be first time homebuyers and keep the real estate market falling

3) the 8k tax credit is not a big deal as a percentage of the median value in union and essex county. It might mean a lot to someone who buys a 120k home in pennsylvania, but not around here. If you wait until 2010, you'll miss this credit, but then again the real estate market might go down another 10 to 20% and you'll save a lot more than 8K in north jersey.

4) interest rates are rising - this could have a mixed impact, or perhaps no impact on the bottom line. You might have to pay more interest, but might be able to get a lower price on a sale to compensate. If mortgage rates get much about their current levels on a 30 year fixed (5.3% or so - quite a raise compared to where they were a month ago), the housing market will not recover, pure and simple.

By the way, if you're a real estate professional, please don't post the load of mullarkey that your kind have been saying for the last 2 years that now is the best time to buy. Honest opinions only please.

[elflord1973]

I'm interested in the westfield/cranford area. I'm looking in the 500-600K price range, but we can open this up to a broader discussion.

Plain and simple, I think the housing market has further to fall, but here are a few points to consider.

As I've posted before, here are some reasons I think prices will fall further:

(1) median price : median income ratios are still high. The Q1 2009 numbers were 3.5 for the Newark-Union NJ-PA region. There is every reason to believe that median price : median income numbers are more or less mean reverting (if there is substantial population growth, that can throw things off, but there isn't in NJ)

If we expect these to return to normal values (2.6-3.0) from the current 3.5 or so, we would expect 15-25% drop in price.

(2) prediction markets (CS futures) are predicting a drop for NY metro of about 15-25%.

All of the hard numbers available that offer information about how much prices will drop, suggest 15-25%. Most people who insist that prices will not fall tend to rely either on hand waving and willful misrepresentation of the actual data that is out there, deliberately ignoring the data (e.g. "all real estate is local", and I live in a place called "fantasy land" where your numbers don't apply), or ironically both (that is, bullish national numbers apply to their locale, but more bearish local numbers don't)

[JG183]

Originally Posted by stinky12

I'd like to get some debate going on this issue

as if there hasn't been any on here in a while

Originally Posted by stinky12

By the way, if you're a real estate professional, please don't post the load of mullarkey that your kind have been saying for the last 2 years that now is the best time to buy. Honest opinions only please.

sounds like you've got some preconceived notions about all agents.

well, if you only want the bears' point of view, you've come to the right place.